On August 15, 2025, New York Attorney General Letitia James, Colorado Attorney General Phil Weiser, Minnesota Attorney General Keith Ellison, and Oregon Attorney General Dan Rayfield co-led a coalition of 19 states and the District of Columbia in suing to block the U.S. Department of Energy (DOE) from implementing a policy that imposes a funding cap on awards for state-run energy programs. The cap limits reimbursement of indirect and fringe costs, jeopardizing states’ ability to continue operating these energy programs and leaving consumers vulnerable to losing access to energy- and cost-saving support.  

The Department of Energy and the Office of Management and Budget have a long-standing regulatory scheme that establishes indirect cost rates for state and federal agencies. The DOE ignored the binding, previously negotiated indirect rates when it arbitrarily limited indirect costs to 10%.  

Projects financed by the impacted funding include developing state energy conservation plans, weatherizing homes, and creating emergency preparedness plans. These programs are at risk of ending if states cannot receive be reimbursed for the full amount of indirect and fringe costs that they are due.  

The states asked the court to rule that the DOE’s actions are unlawful under the Administrative Procedure Act (APA) and to prohibit the agency from implementing the funding cap.

On September 29, 2025, the district court granted summary judgment to the state plaintiffs, preventing the federal government from cutting their energy funding, which was affirmed in a final ruling with an opinion issued on November 10, 2025. After initially appealing the decision, on April 2, 2026, the Department of Energy rescinded the policy and agreed to dismiss its appeal. 

Once again, my office has successfully stopped the federal government from illegally cutting off funding that New Yorkers rely on. 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.Attorney General Letitia James