Attorney General sues Trump Administration over selective energy investment terminations
SAN FRANCISCO (KEYT) – California's Attorney General is co-leading a coalition of 13 attorneys general in suing the Trump Administration over its selective termination of billions in congressionally-approved energy and infrastructure investments last year.
"In May 2025, DOE [U.S. Department of Energy] issued a policy memorandum ('DOE Memo') announcing that DOE would subject previously funded projects to a nebulous and opaque 'review' process," stated Wednesday's filing in federal court. "The DOE Memo was a pretext. Its true purpose was to give the Administration thin bureaucratic cover to eliminate congressionally established energy and infrastructure programs and rescind their funding, for no other reason than a fundamental disagreement with the programs’ policy underpinnings."
The coalition includes California, Colorado, Washington, Connecticut, Illinois, Maryland, Massachusetts, Oregon, New Jersey, New York, Rhode Island, Vermont, Wisconsin stated the suit.
The origin of the federal funding can be found in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, both passed by Congress and signed into law during the Biden Administration.
"In our constitutional system, only Congress has the power to appropriate funding, and to define if and how federal programs are administered," argued the coalition of attorneys general in its filing this week. "It is the President’s duty, after that legislation is signed by the Executive, to execute those laws. He has no power to undo them, whether piecemeal or in their entirety. Indeed, the President’s authority is at its lowest ebb when he acts in direct contravention of express congressional authority."
Article I, Section 9, clause 7 of the U.S. Constitution details that no money from the national Treasury can be spent unless appropriated by a law passed by Congress and signed by the President.
After President Nixon unilaterally withheld funding appropriated by Congress and previously signed into law, Congress passed the Impoundment Control Act of 1974 which limited the practice into two allowable actions, a 45-day deferral of spending, or rescissions, an official termination of spending.
Both actions require the President to submit a formal justification of deferral or rescission request to Congress.
Wednesday's lawsuit noted that the Trump Administration attempted to convince Congress to rescind all funding, even funding already obligated or assigned to an awardee but, "The bill that Congress ultimately passed did not rescind any significant tranches of IIJA [Infrastructure Investment and Jobs Act] program funds; it only rescinded some unobligated funds supporting IRA [Inflation Reduction Act] programs," noted the filing in federal court.
The official announcement of the terminations came the day before the a government shutdown started on Oct. 1, 2025, and was posted on X/Twitter by Russell Vought, the Director of the Office of Management and Budget, who dubbed the grants as the "Green New Scam", a play on the name of a proposed bill that partially inspired the energy grant programs known as the Green New Deal, but was notably scaled down prior to being signed into law.
Nearly $8 billion in Green New Scam funding to fuel the Left's climate agenda is being cancelled. More info to come from @ENERGY.
— Russ Vought (@russvought) October 1, 2025
The projects are in the following states: CA, CO, CT, DE, HI, IL, MD, MA, MN, NH, NJ, NM, NY, OR, VT, WA
"The President claims to seek 'American Energy Dominance' but, in California, his unlawful termination of over $1.2 billion in total funding for crucial clean energy projects means over 200,000 union job cuts, rising energy prices, and higher rates of pollution that wreak havoc on our health," argued California Attorney General Rob Bonta. "The President is cherry-picking this funding at the expense of hardworking Americans and stifling innovation and the economy for the sake of partisan retribution. My office will continue to hold the President and his administration accountable for breaking the law."
The month following the announced terminations, 30 members of the California Congressional delegation signed a letter addressed to Director Vought and Secretary of Energy Wright arguing that the billions in Department of Energy grants were vindictively selected, posed a risk to the future of the nation's economy, and were potentially unlawful.
California's Senators specifically noted the terminations included California's Alliance for Renewable Clean Hydrogen Energy (ARCHES) Hydrogen Hub, a $1.2 billion public-private hydrogen hub project, funded by bipartisan infrastructure legislation passed during the Biden Administration.
The program intended to use $1.2 billion in federal funding to bring together more than 300 organizations across California representing state, county, and city governments; industry groups; community-focused organizations; universities; labor unions; non-governmental entities; and national labs detailed California's Senior Senator Alex Padilla in 2023.
The ARCHES hydrogen hub network of public and private groups included the Central Coast Clean Cities Coalition and The Hydrogen Delivery Company, both located in Santa Barbara, and two other local projects cited for termination -$2 million for the Community Environmental Council and $8,796,815 for Smartville Inc.- were included in the announced cuts and identified by members of the House Appropriations Committee.
"For California to meet its goal of net zero emissions by 2045, it must decarbonize its transportation sector, which accounts for 50% of the state’s carbon emissions," explained a Master's group project at UC Santa Barbara's Bren School of Environmental Science & Management in 2024. "However, current electric vehicle batteries are not equipped to suit the needs of larger vehicles, like freight trucks or buses. Green hydrogen, or hydrogen made from renewable electricity and water, can fill this gap. However, green hydrogen is currently produced in lesser quantities than carbon-intensive fuels, such as diesel, making green hydrogen an unaffordable fuel option."
The project was expected to create a functioning hydrogen market by 2030 as part of California's roadmap to carbon neutrality by 2045 which included a 1,700-fold increase in the use of hydrogen as a fuel source across multiple sectors.
"This cancellation forgoes an agreement that garnered over $10 billion in primarily private sector cost share, threatens over 200,000 new family-sustaining jobs and undermines a program slated to save nearly $3 billion in health costs per year, improving the health of Americans that have suffered from some of the worst air quality in the nation," stated California Governor Gavin Newsom after the announced terminations.
California's hydrogen project was one of seven nationwide hydrogen generation projects, two of which -California's ARCHES and the Pacific Northwest Hydrogen Hub- were included in the announced cuts on Oct. 1 of this year.
A full list of the seven regional hydrogen hubs are below:
- Mid-Atlantic Hydrogen Hub (Mid-Atlantic Clean Hydrogen Hub (MACH2); Pennsylvania, Delaware, New Jersey)
- Appalachian Hydrogen Hub (Appalachian Regional Clean Hydrogen Hub (ARCH2); West Virginia, Ohio, Pennsylvania)
- California Hydrogen Hub (Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES); California)
- Gulf Coast Hydrogen Hub (HyVelocity Hydrogen Hub; Texas)
- Heartland Hydrogen Hub (Minnesota, North Dakota, South Dakota)
- Midwest Hydrogen Hub (Midwest Alliance for Clean Hydrogen (MachH2); Illinois, Indiana, Michigan)
- Pacific Northwest Hydrogen Hub (PNW H2; Washington, Oregon, Montana)
All seven hydrogen hubs nationwide were projected to produce more than three million metric tons of clean hydrogen per year, nearly one-third of the 2030 national production goal while simultaneously eliminating an estimated 25 million metric tons of carbon dioxide emission from end uses each year noted Haris Talwar, Regional Communications Director for the Biden Administration when the projects were detailed in October of 2023.
"ARCHES is a vital part of the active network of regional hydrogen hubs leading the nationwide effort to advance America’s hydrogen economy. The project also aims to connect and expand a clean west-coast freight network to other hydrogen hubs in the Pacific Northwest, Texas, and across the country," noted Wednesday's filing in federal court. "The project’s success hinges on being part of a larger ecosystem. This scale of investment has the potential to be generation-changing, creating sustainable benefits and
opportunities throughout the economy derived from renewable resources."
While Governor Newsom vowed to continue on with the ARCHES program despite the loss of federal funding last year, the lawsuit filed this week shared, "As a result of the termination, ARCHES was forced to lay off its entire full-time staff, pausing the development of the ARCHES hub. ARCHES, as an organization, subsists entirely on federal funding; without that funding, ARCHES is in a holding pattern, kept aloft only by the volunteer efforts of its Board of Directors and the employees of its LLC members. The termination of ARCHES’s cooperative agreement caused equipment manufacturers to cancel investments in hydrogen-fuel-cell programs, stationary-power providers to pivot away from hydrogen, and large-scale renewable energy projects to shift from hydrogen–which is needed to decarbonize multiple sectors."
The lawsuit then shared how the federal funding changes impacted each state represented by the coalition of attorneys general as well as private companies involved in the investments.
It concluded by requesting that federal courts find that the actions by the Trump Administration violated the U.S. Constitution, explicitly prohibit such actions in the future, restore the appropriated funding in accordance with federal law, vacate the justifications provided by the Administration, and prohibit actions that target funding for certain states as well as any additional relief the court deems proper.
"The cancellation of ARCHES' funding was a shortsighted decision from the Trump Administration, one that threatens the promise of California's hydrogen market while the rest of the world surges ahead in its development," argued Dee Dee Myers, Senior Advisor to Governor Newsom and Director of the Governor’s Office of Business and Economic Development (GO-Biz). "Today's [Wednesday's] filing is yet another sign that we will not back down from this threat—we’ll keep pushing forward in our effort to create a carbon-neutral economy that benefits all California’s residents."
