NEW YORK – In a major victory for New York families and state-run energy programs, the U.S. Department of Energy (DOE) has rescinded its unlawful policy capping reimbursement for state energy programs and agreed to dismiss its appeal, preserving the final court ruling.
Attorney General Letitia James led a coalition in suing DOE over the new policy capping reimbursement for key administrative and staffing costs at ten percent of a project’s total budget, threatening millions of dollars in funding for state energy programs. In September 2025, the U.S. District Court for the District of Oregon ruled in favor of the states and struck down DOE’s “indirect costs” policy.
After initially appealing that decision, DOE has now rescinded the policy and agreed to dismiss its appeal, ensuring that states will continue to receive full federal funding for these essential programs. This brings the litigation to a successful conclusion and vindicates the states’ position that the federal government cannot ignore the law to cut funding that Congress has already approved.
“Despite skyrocketing energy costs nationwide, last year the federal government tried to slash funding for vital state-run energy programs. We went to court and won, but the administration still tried to fight us. That ends today,” said Attorney General James.
“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. This is a major victory for families in New York and across the country who rely on these programs to lower their bills, strengthen infrastructure, and prepare for extreme weather,” she added.
The victory marks the culmination of a long and hard-fought battle by Attorney General James and her team to protect the interests of New York residents and ensure that they receive the funding they need to stay safe and affordable. The DOE’s policy change and dismissal of its appeal are a significant step forward in this effort and demonstrate the importance of holding the federal government accountable for its actions.
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Key Facts
- State: New York
- Agency: NY AG
- Category: White Collar Crime
- Source: Official Source â†â€â€ÂÂÂ
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