Attorney General Ellison secures court order declaring federal energy program cuts illegal

September 30, 2025 (SAINT PAUL) — Attorney General Keith Ellison secured a major victory to protect Minnesota’s energy programs yesterday afternoon, 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 yesterday, Judge Mustafa Kasubhai granted the attorneys general’s motion for summary judgment, concluding that the DOE policy violated the Administrative Procedure Act (APA). The policy would have slashed reimbursements for staffing and administrative costs and threatened millions of dollars for essential energy programs.

“Once again, the federal government broke the law by stopping our tax dollars from coming back to Minnesota,” said Attorney General Ellison. “I’m pleased to have blocked these cuts and protected programs that lower energy costs for Minnesotans. I will continue to do everything in my power to defend the rule of law and help Minnesotans afford their lives.”

Last month, Attorney General Ellison co-led 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 percent of a project’s budget. The attorneys general argued that DOE’s cap violated federal law, disregarded states’ negotiated cost rates, and would undermine staffing and operations for state energy agencies. Yesterday, Judge Kasubhai sided with the states and found the funding cap illegal and in violation of the reimbursement regulations for DOE grants.

In 2024, the Minnesota Department of Commerce received over $22 million in annual grant funding from DOE. Commerce’s Energy Resources Division relies on this funding to promote reliable, affordable, and clean energy for Minnesotans and to support the public servants who are essential to this work. For example, Minnesota uses DOE State Energy Program funds to help lower energy costs, secure the grid, and provide local economic stability, but DOE’s new policy would have cut approximately $290,000 in funding to the state, putting both essential staff and programming at risk. 

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