Michigan's Attorney General Dana Nessel has taken the initiative to rally a coalition, uniting with 18 other states and the District of Columbia, in a legal fight against the U.S. Department of Energy (DOE). Their lawsuit aims to thwart a new DOE policy that would impose a rigid cap on the funding for state-run energy programs, which for years have been instrumental in powering various sustainable and efficiency initiatives.
The recent maneuver by the DOE has been met with stiff opposition, as it seeks to cap indirect costs and employee benefits at a flat 10 percent of the total budget for each project. This sudden shift disregards the broader financial agreements historically negotiated with states. It also threatens to significantly disrupt the administration and effectiveness of key energy services. Nessel explained, "This is not the first time we’ve seen the Trump Administration try to unlawfully take resources away from Michigan and other states – and unfortunately, it probably won’t be the last," according to the Michigan Department of Attorney General. She added that previous attempts like this have put critical programs at risk—from cutting-edge medical and public health research to the implementation of renewable energy and efficiency initiatives.
The coalition’s lawsuit, which includes the support of the attorneys general from California, Colorado, Connecticut, Delaware, Hawai‘i, Illinois, Maine, Maryland, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania, centers around the belief that DOE's policy flagrantly violates federal regulations. Existing laws require that negotiated indirect cost rates between states and the federal government be honored without arbitrary caps or limitations.
