Trump’s actions to curtail grants, infrastructure funding creates widespread uncertainty across state

President Donald Trump’s actions to freeze federal funding for grants and infrastructure projects are causing widespread uncertainty across Alaska, including in the Matanuska-Susitna Borough.

The president ordered curtailment of grants and loans last week but then dropped it temporarily after lawsuits were filed. However, executive orders to block funding for infrastructure projects remain in effect and are affecting Alaska projects.

Funds being disbursed under the federal Infrastructure Investment and Jobs Act, or IIJA, are frozen pending a 90-day review as is money for the Inflation Reduction Act, under which energy projects are being financed.

So far it is unclear how many programs and projects are affected but one known to be on hold is “Solar for All”, where federal funds were awarded to the Alaska Housing Finance Corp. and the Alaska Energy Authority to build community solar installations and to fund rooftop solar units in low-income residential areas.

The freeze in grants, although temporarily, particularly affect nonprofit organizations that provide a wide variety of services in the Mat-Su and other regions including health and child care, and aid to low-income Alaskans.

Elizabeth Ripley, CEO of the Mat-Su Health Foundation, is taking the long view of the present turmoil. “This is going to take a marathon, a long-game approach,” she said in a statement.

“We are hopeful we can help move important health reforms along and find opportunities to work with this (President Trump’s) administration. We also stand by the health and human services sector and all the ways they comprise the safety net for our citizens and improve quality of life.” Ripley said

“Change is coming, and we will take a measured, strategic approach to it,” she said.

Meanwhile, federal funds for projects are also affected. Mike Brown, the Matanuska Susitna Borough’s manager, said no borough projects are jeopardized so far, according to information provided by borough spokes person Stefan Hinman.

But other regional projects are likely to be affected. Those could include a large wind energy installation near Mount and a planned major expansion of a solar facility near Houston. Trump is particularly taking aim at wind and solar.

Funding for other renewable energy projects like a large wind facility near Fairbanks and major new solar plant on the Kenai Peninsula are also now caught up in uncertainty. New renewable energy is important to reduce the reliance in Southcentral communities on natural gas, which is set to decline in production from aging Cook Inlet gas fields.

Is it unclear how the freeze will affect a large energy project now in development that would strengthen the electric grid in Southcentral and Interior Alaska. A $400 million-plus first phase of this would build a submarine cable connecting the Kenai Peninsula and the west side of Cook Inlet is now in advanced planning.

This would connect Kenai’s electrical grid with the grid in the Matanuska-Susitna Borough to provide a backup transmission system for getting power from the Bradley Lake hydro project near Homer to Matanuska Electric Association.

Bradley Lake power now flows north through a single, aging transmission lines from the Kenai Peninsula to Anchorage that has limited capacity.

State officials say that planning and engineering for the new transmission system can continue for a period with state funds appropriated by the Legislature, but those are limited.

Any disruption or delays in the flow of infrastructure funds to Alaska will have large economic effects. Laurie Wolf, CEO of the Foraker Group, which provides technical support to nonprofits, told the House Judiciary Committee in Juneau on Monday that $7.6 billion in funding for Alaska has been approved under the federal Infrastructure and Investment and Jobs Act as well as $2.5 billion under the Inflation Reduction Act and another $2.2 billion in federal broadband funds.

The projects funded are just now getting underway, so much of the money has not yet been disbursed with a lot now on hold.

Alaska is more dependent on federal funds than any other state, Wolf said, with 33% of the state budget paid for by the federal government.