---

Press Release:

Attor­ney Gen­er­al Tong Sues to Stop Fed­er­al Cuts That Threat­en State Ener­gy Pro­grams

Preceding Event:

On May 8, 2025, the Depart­ment of Ener­gy announced a new pol­i­cy end­ing the long­stand­ing prac­tice of fed­er­al fund­ing giv­en to states to sup­port ener­gy pro­grams that “have wide-rang­ing mis­sions to pro­mote ener­gy effi­cien­cy, increase our nation’s ener­gy secu­ri­ty, sup­port low­er long-term con­sumer costs and reduced ener­gy cost bur­dens for res­i­dents in our states, and sup­port emer­gency pre­pared­ness efforts,” accord­ing to the law­suit.

The May 8 pol­i­cy, accord­ing to the suit, caps the “sum of indi­rect costs and fringe ben­e­fits cost includ­ed in awards to 10% of the total award amount.“
While four oth­er sim­i­lar DOE poli­cies have been enjoined or vacat­ed, this pol­i­cy is about a “cost cap” rather than a “rate cap” and includes fringe ben­e­fit costs.

General Overview:

Accord­ing to the press release from July 29, 2025, “Attor­ney Gen­er­al William Tong today joined 18 oth­er states and the Dis­trict of Colum­bia in suing to block the U.S. Depart­ment of Ener­gy (DOE) from impos­ing a new fund­ing cap that slash­es sup­port for vital state-run ener­gy pro­grams.

The states argue that the new pol­i­cy vio­lates fed­er­al reg­u­la­tions that require agen­cies to hon­or nego­ti­at­ed indi­rect cost rates between states and the fed­er­al gov­ern­ment. They assert the pol­i­cy mir­rors sim­i­lar caps that fed­er­al courts have recent­ly struck down, and also addi­tion­al fed­er­al reg­u­la­tions regard­ing fringe ben­e­fits costs. The coali­tion empha­sizes that every court to have ruled on the mer­its of such blan­ket lim­its has found them unlaw­ful, unjus­ti­fied, and dis­rup­tive to essen­tial pub­lic pro­grams. The coali­tion is ask­ing the court to vacate DOE’s new pol­i­cy and bar imple­men­ta­tion of any unlaw­ful reim­burse­ment caps.”

Connecticut Nexus:

Accord­ing to the press release, “In Con­necti­cut, the Depart­ment of Ener­gy and Envi­ron­men­tal Pro­tec­tion uses State Ener­gy Pro­gram fund­ing to sup­port work on ener­gy effi­cien­cy, build­ing decar­boniza­tion, renew­able ener­gy, afford­able hous­ing ener­gy retro­fits, resilience, and trans­mis­sion and dis­tri­b­u­tion plan­ning. This includes pro­mot­ing heat pumps and ener­gy-effi­cient heat­ing and light­ing, pub­lic tran­sit and rideshar­ing, water con­ser­va­tion and recy­cling. DOE’s pol­i­cy to cut indi­rect costs to 10 per­cent of the over­all award and include fringe ben­e­fits in that cap would seri­ous­ly lim­it the flex­i­bil­i­ty of these funds for Con­necti­cut and could pre­vent Con­necti­cut from using the funds as need­ed.”

Date of filing:

Aug. 15, 2025

Case #:

6:25-cv-01458

Case title:

State of New York et al v. Unit­ed States Depart­ment of Ener­gy et al

Plaintiffs: 19 states and D.C.

• STATE OF NEW YORK;
• STATE OF COLORADO;
• STATE OF MINNESOTA;
• STATE OF OREGON;
• STATE OF CALIFORNIA;
• STATE OF CONNECTICUT;
• STATE OF DELAWARE;
• DISTRICT OF COLUMBIA;
• STATE OF HAWAI‘I;
• STATE OF ILLINOIS;
• OFFICE OF THE GOVERNOR, ex rel. ANDY BESHEAR, in his offi­cial capac­i­ty as Gov­er­nor of the Com­mon­wealth of Ken­tucky;
• STATE OF MAINE;
• STATE OF MARYLAND;
• STATE OF MICHIGAN;
• STATE OF NEVADA;
• STATE OF NEW MEXICO;
• STATE OF NORTH CAROLINA; J
• JOSH SHAPIRO, in his offi­cial capac­i­ty as Gov­er­nor of the Com­mon­wealth of Penn­syl­va­nia;
• STATE OF WASHINGTON;
• STATE OF WISCONSIN

Defendants:

• UNITED STATES DEPARTMENT OF ENERGY;
• CHRIS WRIGHT, in his offi­cial capac­i­ty as Sec­re­tary of the U.S. Depart­ment of Ener­gy

Court:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

Status as of Dec. 1, 2025:

CLOSED — Ter­mi­nat­ed on Nov. 10, 2025
Judg­ment in favor of plain­tiffs

---