"Despite skyrocketing energy costs nationwide, last year the federal government tried to slash funding for vital state-run energy programs," James said in a statement. "We went to court and won, but the administration still tried to fight us. That ends today."
James led a multi-state coalition in suing DOE over the policy in August 2025, according to her office. The suit challenged a cap that, the attorney general said, threatened millions of dollars in funding for state energy programs.
In September 2025, the U.S. District Court for the District of Oregon ruled in favor of the states and struck down DOE's "indirect costs" policy, according to the press release.
DOE initially appealed that decision. With the withdrawal of the policy and the dismissal of the appeal, the district court ruling stands.
"By withdrawing its policy and dropping its appeal, the federal government is finally acknowledging what the court already made clear: it cannot ignore the law to cut funding that Congress has already approved," James said.
She called the outcome "a major victory for families in New York and across the country who rely on these programs to lower their bills, strengthen infrastructure, and prepare for extreme weather."
The press release did not name the other states in the coalition, identify the specific energy programs affected, or provide a docket number.