States Lead Legal Challenge to DOE Clean Energy Funding Cuts

A coalition of 13 state attorneys general has filed a lawsuit against the U.S. Department of Energy (DOE), challenging the termination of nearly $8 billion in federal clean energy and infrastructure funding previously authorized under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). The suit was filed in the U.S. District Court for the Northern District of California and alleges that the DOE unlawfully rescinded funding approved by Congress. 

Joining the legal challenge are the attorneys general of the following states:

California, Colorado, Connecticut, Delaware, Hawai‘i, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont, and Washington.

According to the complaint, the DOE has allowed funding previously awarded for grid modernization, clean hydrogen hubs, energy efficiency upgrades, and infrastructure projects to be rescinded, creating uncertainty for contractors and municipal partners. Going forward, the coalition seeks to restore the terminated funding, emphasizing that such financial awards were appropriated by Congress and cannot be arbitrarily cancelled by executive action. 

For SMACNA contractors, federal clean energy and infrastructure investments support demand for HVAC system upgrades, energy-efficiency retrofits, advanced mechanical systems, and grid-connected projects. As the legal challenge proceeds, SMACNA will continue tracking developments that affect market certainty, workforce demand, and long-term investment in these sectors.