AG Brown sues to cease federal cuts threatening state power resilience, affordability

SEATTLE – Attorney General Nick Brown has joined 18 states and the District of Columbia in suing to dam the U.S. Department of Energy (DOE) from slashing help for state power grid resilience and power effectivity, in addition to power affordability.

The new coverage undermines these public efforts by limiting reimbursement for key administrative and staffing prices which have lengthy been coated by these federal power applications. By capping sure funding for these applications, DOE is jeopardizing states’ potential to maintain them working. The states are asking the court docket to vacate this illegal cap and restore the legally required reimbursement charges for these important power applications.

“The administration’s energy policies to date only threaten to make our power sources dirtier, less reliable, less efficient, and more expensive,” Brown stated. “This policy will ultimately hurt consumers in every state, not just those in our coalition.” 

For a long time, federal legislation has required companies like DOE to barter agreements with states that set truthful reimbursement charges for federally-funded, state-run applications. This contains the fundamental administrative or staffing prices wanted to run them. These “indirect” and “fringe” prices have by no means been topic to a cap. On May 8, 2025, DOE introduced a brand new coverage that ignores this longstanding follow, capping oblique and worker profit prices at 10 p.c of a venture’s whole funds, no matter beforehand negotiated charges. 

If allowed to face, the cap would restrict sources states depend on to maintain applications working and guarantee federal {dollars} attain the folks they’re meant to assist. It might drive states to make cuts to staffing and operations, decreasing their potential to ship essential power companies and probably delaying or cancelling key tasks. State budgets would face sudden shortfalls, and companies can be pressured to spend extra money and time navigating DOE’s new funds guidelines, leaving fewer sources for direct shopper help. 

In Washington, the state power plan is run by the state Department of Commerce, which estimates these prices are thrice the cap proposed by DOE. If the brand new federal cap proceeds, it might drive the state to reduce or delay high-impact group applications, together with wildfire mitigation planning with utilities and demanding power infrastructure safety, as effectively an power effectivity applications that scale back prices for companies, utilities and native governments. 

The states argue that the brand new coverage violates federal laws that require companies to honor negotiated oblique value charges between states and the federal authorities. The coalition emphasizes that each court docket to rule on the deserves of such blanket limits has discovered them illegal, unjustified, and disruptive to important public applications. 

The coalition is asking the court docket to vacate DOE’s new coverage and bar implementation of any illegal reimbursement caps. 

Joining Brown in submitting this lawsuit, which was led by New York Attorney General Letitia James, Minnesota Attorney General Keith Ellison, and Colorado Attorney General Phil Weiser, are the attorneys common of California, Connecticut, Delaware, Hawaiʻi, Illinois, Maine, Maryland, Michigan, Nevada, New Mexico, North Carolina, Oregon, Wisconsin, and the District of Columbia, in addition to the governors of Kentucky and Pennsylvania.

A replica of the criticism is accessible here.

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