{"id":2022,"date":"2026-01-08T11:16:46","date_gmt":"2026-01-08T16:16:46","guid":{"rendered":"https:\/\/digitaljournalism.uconn.edu\/balance-of-power\/?p=2022"},"modified":"2026-01-11T10:39:17","modified_gmt":"2026-01-11T15:39:17","slug":"doe-funding-cap-for-state-energy-programs","status":"publish","type":"post","link":"https:\/\/digitaljournalism.uconn.edu\/balance-of-power\/2026\/01\/08\/doe-funding-cap-for-state-energy-programs\/","title":{"rendered":"DOE Funding Cap for State Energy Programs"},"content":{"rendered":"\n
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Press Release:<\/strong><\/h3>\n\n\n\n

Attor\u00adney Gen\u00ader\u00adal Tong Sues to Stop Fed\u00ader\u00adal Cuts That Threat\u00aden State Ener\u00adgy Pro\u00adgrams<\/a><\/p>\n\n\n\n

Preceding Event:<\/strong><\/h3>\n\n\n\n

On May 8, 2025, the Depart\u00adment of Ener\u00adgy announced a new pol\u00adi\u00adcy<\/a> end\u00ading the long\u00adstand\u00ading prac\u00adtice of fed\u00ader\u00adal fund\u00ading giv\u00aden to states to sup\u00adport ener\u00adgy pro\u00adgrams that \u201chave wide-rang\u00ading mis\u00adsions to pro\u00admote ener\u00adgy effi\u00adcien\u00adcy, increase our nation\u2019s ener\u00adgy secu\u00adri\u00adty, sup\u00adport low\u00ader long-term con\u00adsumer costs and reduced ener\u00adgy cost bur\u00addens for res\u00adi\u00addents in our states, and sup\u00adport emer\u00adgency pre\u00adpared\u00adness efforts,\u201d accord\u00ading to the law\u00adsuit.<\/p>\n\n\n\n

The May 8 pol\u00adi\u00adcy, accord\u00ading to the suit, caps the \u201csum of indi\u00adrect costs and fringe ben\u00ade\u00adfits cost includ\u00aded in awards to 10% of the total award amount.\u201c
While four oth\u00ader sim\u00adi\u00adlar DOE poli\u00adcies have been enjoined or vacat\u00aded, this pol\u00adi\u00adcy is about a \u201ccost cap\u201d rather than a \u201crate cap\u201d and includes fringe ben\u00ade\u00adfit costs.<\/p>\n\n\n\n

General Overview:<\/strong><\/h3>\n\n\n\n

Accord\u00ading to the press release from July 29, 2025, \u201cAttor\u00adney Gen\u00ader\u00adal William Tong today joined 18 oth\u00ader states and the Dis\u00adtrict of Colum\u00adbia in suing to block the U.S. Depart\u00adment of Ener\u00adgy (DOE) from impos\u00ading a new fund\u00ading cap that slash\u00ades sup\u00adport for vital state-run ener\u00adgy pro\u00adgrams.<\/p>\n\n\n\n

The states argue that the new pol\u00adi\u00adcy vio\u00adlates fed\u00ader\u00adal reg\u00adu\u00adla\u00adtions that require agen\u00adcies to hon\u00ador nego\u00adti\u00adat\u00aded indi\u00adrect cost rates between states and the fed\u00ader\u00adal gov\u00adern\u00adment. They assert the pol\u00adi\u00adcy mir\u00adrors sim\u00adi\u00adlar caps that fed\u00ader\u00adal courts have recent\u00adly struck down, and also addi\u00adtion\u00adal fed\u00ader\u00adal reg\u00adu\u00adla\u00adtions regard\u00ading fringe ben\u00ade\u00adfits costs. The coali\u00adtion empha\u00adsizes that every court to have ruled on the mer\u00adits of such blan\u00adket lim\u00adits has found them unlaw\u00adful, unjus\u00adti\u00adfied, and dis\u00adrup\u00adtive to essen\u00adtial pub\u00adlic pro\u00adgrams. The coali\u00adtion is ask\u00ading the court to vacate DOE\u2019s new pol\u00adi\u00adcy and bar imple\u00admen\u00adta\u00adtion of any unlaw\u00adful reim\u00adburse\u00adment caps.\u201d<\/p>\n\n\n\n

Connecticut Nexus:<\/strong><\/h3>\n\n\n\n

Accord\u00ading to the press release, \u201cIn Con\u00adnecti\u00adcut, the Depart\u00adment of Ener\u00adgy and Envi\u00adron\u00admen\u00adtal Pro\u00adtec\u00adtion uses State Ener\u00adgy Pro\u00adgram fund\u00ading to sup\u00adport work on ener\u00adgy effi\u00adcien\u00adcy, build\u00ading decar\u00adboniza\u00adtion, renew\u00adable ener\u00adgy, afford\u00adable hous\u00ading ener\u00adgy retro\u00adfits, resilience, and trans\u00admis\u00adsion and dis\u00adtri\u00adb\u00adu\u00adtion plan\u00adning. This includes pro\u00admot\u00ading heat pumps and ener\u00adgy-effi\u00adcient heat\u00ading and light\u00ading, pub\u00adlic tran\u00adsit and rideshar\u00ading, water con\u00adser\u00adva\u00adtion and recy\u00adcling. DOE\u2019s pol\u00adi\u00adcy to cut indi\u00adrect costs to 10 per\u00adcent of the over\u00adall award and include fringe ben\u00ade\u00adfits in that cap would seri\u00adous\u00adly lim\u00adit the flex\u00adi\u00adbil\u00adi\u00adty of these funds for Con\u00adnecti\u00adcut and could pre\u00advent Con\u00adnecti\u00adcut from using the funds as need\u00aded.\u201d<\/p>\n\n\n\n

Date of filing:<\/strong><\/h3>\n\n\n\n

Aug. 15, 2025<\/p>\n\n\n\n

Case #:<\/strong><\/h3>\n\n\n\n

6:25-cv-01458<\/a><\/p>\n\n\n\n

Case title:<\/strong><\/h3>\n\n\n\n

State of New York et al v. Unit\u00aded States Depart\u00adment of Ener\u00adgy et al<\/em><\/p>\n\n\n\n

Plaintiffs:<\/strong> 19 states and D.C.<\/h3>\n\n\n\n