New York Attorney General Leads Coalition in Lawsuit Against US Department of Energy's Funding Cap

Strategic Insights -

A coalition of 20 states and the District of Columbia, led by New York Attorney General Letitia James, has filed a lawsuit against the US Department of Energy (DOE) to block a funding cap that would slash support for state-run energy programs. The DOE's new policy would limit reimbursement for administrative and staffing costs, threatening consumers' access to critical benefits and savings.

Key Takeaways:

  • The lawsuit aims to block the DOE's new funding cap, which would slash support for state-run energy programs and jeopardize consumers' access to critical benefits and savings.
  • The DOE's policy would limit reimbursement for administrative and staffing costs, which have long been covered by federal energy programs, to 10% of a project's total budget.
  • The new policy would strip away the resources states rely on to keep programs operating and ensure federal dollars reach the people they are meant to help.
  • In New York, the damage would be immediate and severe, with the New York State Energy Research and Development Authority (NYSERDA) estimating the new cap would slash about $1.6 million from one grant alone.
  • The funding cap 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.
  • 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.
  • The attorneys general emphasize that every court to have ruled on the merits of such blanket limits has found them unlawful, unjustified, and disruptive to essential public programs.

Statistics:

  • The DOE's new policy would limit reimbursement for administrative and staffing costs to 10% of a project's total budget.
  • The new policy would slash support for state-run energy programs, jeopardizing consumers' access to critical benefits and savings.
  • In New York, the damage would be immediate and severe, with the New York State Energy Research and Development Authority (NYSERDA) estimating the new cap would slash about $1.6 million from one grant alone.
  • Last year, NYSERDA was awarded more than $1.8 million for indirect and fringe costs, which would be cut to just $314,000 under the new policy.
  • The lawsuit aims to block the DOE's new policy and bar implementation of any unlawful reimbursement caps.

Sources:

  • "Office of the New York Attorney General." (2025) New York Attorney General Led Coalition in Lawsuit Against US Department of Energy's Funding Cap
  • "New York State Energy Research and Development Authority (NYSERDA)." (2025) SEP Award is a Major Funding Source for New York's Energy Planning, Emergency Preparedness, and Energy Security Work
  • "United States Department of Energy (DOE)." (2025) New Policy for Reimbursement of Administrative and Staffing Costs