NEW YORK – The U.S. Department of Energy (DOE) has thrown in the towel, officially rescinding its attempt to slash funding for critical state energy programs. This comes after a hard-fought legal battle spearheaded by New York Attorney General Letitia James, bringing a close to a case that threatened millions in aid for families nationwide.
The feds initially tried to cap reimbursement for key administrative and staffing costs at a measly ten percent of a project’s total budget, a move Attorney General James and a coalition of states immediately challenged. The brazen attempt to rewrite the rules came despite already-skyrocketing energy costs, and a clear congressional mandate for full funding. In August 2025, James filed suit, calling out the DOE’s unlawful policy.
The U.S. District Court for the District of Oregon sided with the states in September 2025, delivering a stinging rebuke to the DOE and striking down the “indirect costs” policy. But the fight wasn’t over. The administration dug in its heels, appealing the decision, and prolonging the uncertainty for states relying on these funds. Now, they’ve finally buckled.
“Despite skyrocketing energy costs nationwide, last year the federal government tried to slash funding for vital state-run energy programs,” stated Attorney General James in a release. “We went to court and won, but the administration still tried to fight us. That ends today. By withdrawing its policy and dropping its appeal, the federal government is finally acknowledging what the court already made clear: it cannot ignore the law to cut funding that Congress has already approved.”
The victory ensures that New York and other states will continue to receive full federal funding for essential programs designed to lower energy bills, fortify infrastructure, and prepare communities for increasingly extreme weather events. It’s a win for taxpayers and a clear message: attempting to strong-arm states into accepting unlawful funding restrictions won’t fly.
This case serves as a stark reminder that even federal agencies aren’t above the law. Attorney General James’ office has proven once again that they’re willing to take on powerful interests and fight for the financial security of New Yorkers. The DOE’s retreat is a significant victory, but the Grimy Times will continue to watch closely to ensure these funds are used effectively and transparently.
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Key Facts
- State: New York
- Agency: NY AG
- Category: Public Corruption
- Source: Official Source â†â€â€ÂÂÂ
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