Weiser joins lawsuit to block federal energy funding cuts

DENVER — Colorado Attorney General Phil Weiser is co-leading a coalition of 19 states and the District of Columbia in a lawsuit to stop the U.S. Department of Energy from imposing new limits on funding for state-run energy programs.

The lawsuit challenges a department policy announced in May that caps reimbursement for indirect and employee benefit costs at 10 percent of a project’s budget, regardless of previously negotiated rates. States have long relied on those reimbursements to cover administrative and staffing costs that support energy programs.

Weiser said the cuts could hinder Colorado’s efforts to expand access to clean energy, especially in rural areas, and to continue progress on greenhouse gas reduction targets.

“Colorado receives critical annual funding from the Energy Department to increase affordable access to clean energy in rural and urban areas across the state, boost investment and economic growth, and create clean energy jobs,” Weiser said. “Indirect costs are fundamental to this work, and the funding cuts will have a lasting impact on Coloradans. Secretary Wright was wrong to impose this illegal new policy, and we’re in court to overturn it.”

The Colorado Energy Office is budgeted to receive more than $1 million from the department in 2025, with nearly half of that allocated to indirect costs. Under the new policy, the office would lose more than $360,000 in reimbursements, which state officials say would force cuts to staffing and operations.

The coalition argues the cap violates federal rules that require agencies to honor negotiated reimbursement rates and mirrors similar limits that courts have already struck down. Attorneys general from Minnesota and New York are co-leading the suit with Weiser. They are joined by attorneys general from California, Connecticut, Delaware, the District of Columbia, Hawai’i, Illinois, Maine, Maryland, Michigan, Nevada, New Mexico, North Carolina, Oregon, Washington and Wisconsin, along with the governors of Kentucky and Pennsylvania.

The lawsuit asks the court to block the Energy Department from enforcing the cap and to restore the previous reimbursement structure.