Attorney General Bonta Marks Major Litigation Victory as Trump Administration Backs Away from Its Efforts to Cut Funding for State Energy Programs

OAKLAND - California Attorney General Rob Bonta today released the following statement after the U.S. Department of Energy (DOE) agreed to dismiss its appeal of a court order striking down its unlawful policy capping reimbursement for state energy programs, preserving the states' victory in federal court and bringing the case to a close:

"The Trump Administration is finally recognizing what my office has said all along: approved energy funding isn't up for grabs," said Attorney General Bonta. "Keeping these programs in place means lowering energy bills, creating good-paying American jobs, and modernizing the infrastructure we depend on. This is a clear legal victory - and a win for American workers, communities, and our energy future. My office remains unwavering in our commitment to hold this administration accountable when they break the law."

"We are pleased with this decision. It is likely to be one among many more reinstating critical funding for energy programs that build new clean energy resources, strengthen the electrical grid, and help Californians save money on their energy bills," said California Energy Commission Chair David Hochschild.

Last August, Attorney General Bonta, alongside the California Energy Commission, joined a coalition of 18 other attorneys general and two governors in a lawsuit to block DOE's attempt to cap reimbursement of indirect (administrative) and fringe (employee benefit) costs at 10% of a project's budget. The attorneys general argued that DOE's cap violated federal law, disregarded states' negotiated cost rates, and undermined staffing and operations for state energy agencies. In September 2025, Judge Kasubhai of the U.S. District Court for the District of Oregon agreed with the states and found the funding cap illegal and in violation of the reimbursement regulations for DOE grants. In January 2026, DOE both appealed that ruling to the U.S. Court of Appeals for the Ninth Circuit and rescinded the unlawful policy.