The underlying fight was over a DOE policy, introduced in 2025, that capped reimbursement for administrative and staffing costs — what DOE called "indirect costs" — at ten percent of a project's total budget. States argued the cap was unlawful and threatened millions of dollars in funding for energy programs they rely on to reduce energy costs for residents.
Attorney General Tong and a coalition of states sued DOE in August 2025. The following month, the U.S. District Court for the District of Oregon ruled in favor of the states and struck down the indirect costs policy.
DOE initially appealed that ruling. It has now reversed course, rescinding the policy and agreeing to dismiss the appeal, which closes out the litigation and leaves the district court's decision intact.
In a statement released April 2, 2026, Tong said: "Another major win to protect Connecticut against Donald Trump's lawless chaos. This was an unlawful, short-sighted policy concocted to undermine efforts to drive down energy costs and keep us reliant on the fossil fuel industry. We sued, we won, and we're going to keep fighting to protect Connecticut funding and Connecticut families."
The result means states will continue to receive full federal reimbursement for administrative and staffing costs associated with their energy programs, without the ten-percent ceiling DOE had sought to impose.