New York Attorney General Letitia James and 17 other blue-state attorneys general, as well as the governors of Kentucky and Pennsylvania, filed a lawsuit Friday in an attempt to block cuts made by the Department of Energy they claim threaten their state’s energy programs.
Filed in U.S. District Court for Oregon, the complaint targets the department’s policy change that limits reimbursement that states can use toward administrative and staffing costs. The attorneys general and governors are framing it as cuts against consumers.
“Cutting these programs would pull the rug out from efforts to save New Yorkers money on their bills, prepare homes for extreme weather, and move toward clean, affordable energy,” James said in a post on X.
On June 30, the department in a policy flash announced limits to how much state governments can claim for overhead and employee benefits on new grants.
Before, states often could get back much more, based on special agreements. Now, reimbursements are capped at just 10% of the total award. This means less money to cover things like office staff, utilities, and worker benefits tied to the project.
For some states, that could mean dipping into their own budgets to make up the difference or scaling back support services — leaving more federal dollars for the project itself but tightening belts at the state level.
“We’re suing to stop [President] Donald Trump from making it harder for states like Connecticut to drive down energy costs and reduce our reliance on fossil fuels. Connecticut families and small businesses are getting socked by skyrocketing utility bills, and now Trump is lawlessly defunding efforts to help us save. And why? So that he can funnel even more tax breaks to billionaires. We’re not going to let him,” Connecticut Attorney General William Tong said in a statement in a press release Friday.
Newsmax reached out to the Department of Energy for comment.
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