New York Attorney General Leads Coalition in Lawsuit Against U.S. Department of Energy's Funding Cuts for State-Ran Energy Programs

Strategic Insights -

New York Attorney General Letitia James led a coalition of 18 states and the District of Columbia in suing the U.S. Department of Energy (DOE) to block a new funding cap that slashes support for vital state-run energy programs. The DOE policy would prevent states from using critical federal funds by limiting reimbursement for key administrative and staffing costs that have long been covered by these federal energy programs. The lawsuit argues that the new policy is unlawful, violating federal regulations that require agencies to honor negotiated indirect cost rates between states and the federal government.

Key Takeaways:

  • The lawsuit, filed by New York Attorney General Letitia James and 18 other states and the District of Columbia, aims to block the U.S. Department of Energy's new funding cap that slashes support for vital state-run energy programs.
  • The DOE policy would limit reimbursement for key administrative and staffing costs, threatening states' ability to keep these programs running and jeopardizing consumers' access to critical benefits and savings.
  • The attorneys general argue that the new policy is unlawful, violating federal regulations that require agencies to honor negotiated indirect cost rates between states and the federal government.
  • The States claim 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 new policy would force states to make deep cuts to staffing and operations, sharply reducing their ability to deliver energy efficiency rebates, technical assistance, and weatherization services to households and small businesses.
  • In New York, the damage would be immediate and severe, with an estimated $1.6 million cut from one grant alone, the State Energy Program (SEP) formula grant, creating an unexpected cost burden the state cannot meet.
  • The coalition is asking the court to vacate the new policy and bar DOE from implementing any unlawful reimbursement caps.
  • Joining Attorney General James in filing this lawsuit are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Washington, Wisconsin, and District of Columbia, as well as the governors of Kentucky and Pennsylvania.

Statistics:

  • $1.6 million: estimated cut from one grant alone, the State Energy Program (SEP) formula grant, in New York due to the new policy.
  • $1.8 million: amount awarded to New York's NYSERDA for indirect and fringe costs last year.
  • $314,000: amount NYSERDA would be funded under the new policy, a fraction of what is needed to perform the work.
  • 26: number of staff positions funded by the SEP award, including administrators, nuclear safety specialists, and others who develop the State Energy Plan and manage New York's Strategic Fuel Reserve.

Sources:

  • U.S. Department of Energy (DOE)
  • New York State Energy Research and Development Authority (NYSERDA)
  • New York Attorney General Letitia James
  • Coalition of 18 states and the District of Columbia, including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Washington, Wisconsin, and District of Columbia, as well as the governors of Kentucky and Pennsylvania.
  • Federal regulations regarding negotiated indirect cost rates between states and the federal government.