ATTORNEY GENERAL RAOUL SECURES COURT ORDER DECLARING FEDERAL ENERGY PROGRAM CUTS ILLEGAL

ATTORNEY GENERAL RAOUL SECURES COURT ORDER DECLARING FEDERAL ENERGY PROGRAM CUTS ILLEGAL

September 30, 2025

Chicago - Attorney General Kwame Raoul today secured a significant victory to protect Illinois' energy programs, after the U.S. District Court for the District of Oregon found that the U.S. Department of Energy's (DOE) cap on state energy program funding is illegal. In a ruling from the bench today, Judge Mustafa Kasubhai granted a motion for summary judgment Raoul and a multistate coalition filed, concluding that the DOE's policy violated the Administrative Procedure Act. The policy would have slashed reimbursements for staffing and administrative costs and threatened millions of dollars for essential energy programs.

"Improving energy efficiency by increasing clean energy is good for the environment, state economies and our workers," Raoul said. "The Department of Energy's cap on indirect and employee benefit costs would severely jeopardize programs that are essential to states' efforts to modernize and improve energy grid efficiency, and I appreciate the judge finding that the cap is unlawful."

Last month, Attorney General Raoul joined a coalition of 18 states in a lawsuit to block the DOE's attempt to cap reimbursement for basic administrative and staffing costs of federally funded, state-run programs. The DOE's policy attempted to cap these "indirect" costs at 10% of a project's budget, regardless of previously negotiated rates. Indirect costs have never been subject to a cap, and Raoul and the states argued that DOE's cap violated federal law, disregarded states' negotiated rates, and would undermine staffing and operations at state energy agencies. Today, Judge Kasubhai sided with the states, finding the funding cap to be illegal and a violation of the reimbursement regulations for DOE grants.

In Illinois, the new cost cap would have endangered long-running programs promoting energy resiliency and efficiency. These programs include the Public Water Infrastructure Energy Efficiency Assessment Program, which helps publicly held water treatment facilities conserve energy and reduce costs for customers, and energy code training for homebuilders, contractors, architects and others in the construction industry to ensure that renovations and new building projects meet the newest efficiency standards. It would have also jeopardized the state's ability to invest in the Illinois Clean Energy Innovation Fund, a revolving loan fund that supports the development of emerging technologies that enhance grid reliability, resilience and modernization.

Joining Attorney General Raoul in the lawsuit are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.