A federal court has struck down a U.S. Department of Energy policy that threatened to slash energy program funding across New York, handing a major legal victory to the state and dozens of its partners.
On September 29, a U.S. District Court judge in Oregon ruled that the Department of Energy’s cap on reimbursement for staffing and administrative costs violated federal law. The decision protects roughly $1.6 million in state energy funding that supports everything from power grid resilience to consumer energy savings programs.
The case was led by New York Attorney General Letitia James, along with 18 other state attorneys general and two governors. The coalition challenged the DOE’s attempt to limit reimbursement for indirect and fringe costs to just 10% of a project’s budget—despite existing negotiated rates between states and the federal government.
“These programs help families save money on their energy bills, prepare their homes for extreme weather, and build a more resilient future,” said Attorney General James. “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.”
Judge Mustafa Kasubhai granted summary judgment in favor of the coalition, finding the DOE policy in violation of the Administrative Procedure Act.
In New York, the proposed cap would have jeopardized 26 staff positions and forced the state to either absorb the unexpected costs or delay programs critical to energy stability and affordability. That includes funding for grid emergency drills, pricing policy development, and disaster response planning.
States joining New York in the case include California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Washington, Wisconsin, and the District of Columbia. The governors of Kentucky and Pennsylvania also joined the lawsuit.
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