Attorney General James and Coalition Win Lawsuit Challenging Federal Cuts to New York Energy Programs

NEW YORK – New York Attorney General Letitia James today secured a major victory in her fight to protect New York energy programs, after the U.S. District Court for the District of Oregon found that the U.S. Department of Energy’s (DOE) cap on state energy program funding is illegal. In a ruling from the bench today, Judge Mustafa Kasubhai granted the attorneys general’s motion for summary judgment, concluding that the DOE policy violated the Administrative Procedure Act (APA). The policy would have slashed reimbursements for staffing and administrative costs and threatened millions of dollars for essential energy programs.

“Once again, my office has successfully stopped the federal government from illegally cutting off funding that New Yorkers rely on,” said Attorney General James. “These programs help families save money on their energy bills, prepare their homes for extreme weather, and build a more resilient future. DOE’s cap on funding is unlawful and dangerous, and today’s ruling ensures that New York will continue to get the resources it needs to deliver cleaner, safer, and more affordable energy for our communities.” 

Last month, Attorney General James led a coalition of 18 other attorneys general and two governors in a lawsuit to block DOE’s attempt to cap reimbursement of indirect (administrative) and fringe (employee benefit) costs at 10 percent of a project’s budget. The attorneys general argued that DOE’s cap violated federal law, disregarded states’ negotiated cost rates, and would undermine staffing and operations for state energy agencies. Today, Judge Kasubhai sided with the states and found the funding cap illegal and in violation of the reimbursement regulations for DOE grants.

In New York, approximately $1.6 million in state energy program funding was at risk due to DOE’s policy, which would have created an enormous, unexpected cost burden that the state would have been unable to meet, jeopardizing funding for 26 staff positions. This funding also helps the state ensure the state’s energy systems can withstand extreme weather or disasters, determine how electricity prices and market rules are set, and run annual practice drills so the state can respond quickly if the power grid or fuel supply is disrupted. Without full federal support, the state could have potentially had to cancel or delay programs that enable it to meet energy demand while prioritizing affordability.

Joining Attorney General James in this lawsuit, which was co-led by the attorneys general of Colorado, Minnesota, and Oregon, are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.

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