James's office said the move preserves a September 2025 ruling from the U.S. District Court for the District of Oregon that invalidated DOE's "indirect costs" policy and brings the litigation to a close.
"Despite skyrocketing energy costs nationwide, last year the federal government tried to slash funding for vital state-run energy programs," James said in the statement. "We went to court and won, but the administration still tried to fight us. That ends today."
The challenged policy capped reimbursement for administrative and staffing costs at ten percent of a project's total budget, according to the AG's office. James led a coalition of states in suing DOE over the policy in August 2025.
"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.
James 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."
DOE initially appealed the district court's ruling before rescinding the policy and agreeing to dismiss the appeal, the AG's office said.