California is suing the Trump administration over billions in canceled clean energy subsidies
California is suing the Trump administration over it elimination of billions of dollars in subsidies of the top clean projects awarded under President Biden, federal officials announced Wednesday. It is the 58th case in California against the president since he resumed office last year.
The complaint filed in the US District Court for the Northern District of California challenges the US Department of Energy and the Office of Management and Budget for canceling approximately $2.7 billion in funding for programs allocated under the Biden Inflation Act and the Bipartisan Infrastructure Act – many of the countries that did not vote for Trump in the 2024 presidential election.
That includes $1.2 billion in federal funding for California’s massive effort to develop clean hydrogen and $4 million for the development of energy-efficient buildings in the state, among other things.
The cuts represent “group retaliation” and will result in the loss of more than 200,000 union jobs, higher prices and worse pollution in California, said Atty. Gen. Rob Bonta, who co-led the case with the Washington and Colorado attorneys general. The suit was also joined by Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont and Wisconsin.
“These are not discretionary programs – these are funds that have been approved by two officers in Congress, and the President cannot cancel them just because he doesn’t agree with them,” Bonta told reporters on Wednesday. “California will not allow President Trump and his administration to play politics with our economy, our power grid and our jobs.”
The lawsuit alleges that the termination is an illegal violation of the constitutional separation of powers – as the money was approved by a majority in Congress – and the Administrative Procedure Act, which requires government agencies to follow fair and transparent procedures when making laws and decisions. It is asking the court to declare the administration’s actions illegal and permanently bar them from interfering with these programs.
Representatives for the Department of Energy and the Office of Management and Budget did not immediately respond to requests for comment.
However, from his first day in office, the president issued executive orders declaring a “national energy emergency” and called for an end to the Green New Deal, a plan to convert the US to renewable energy and reduce greenhouse gas emissions.
In September, Trump told reporters he was open to “cutting programs [Democrats] like this government shutdown.” The next day, OMB director Russell Vought wrote in X that the administration is canceling “nearly $8 billion in Green New Scam funding to advance the leftist climate agenda” in 16 states, all of which did not vote for Trump in 2024.
The Department of Energy announced the cuts the next day. They included more than 300 financial awards for 223 projects the agency said were “not sufficiently advanced to meet the nation’s energy needs, economically inefficient, and will not provide a good return on the investment of taxpayer dollars.”
Among the cuts was a $1.2 billion grant for California’s hydrogen hub, the Alliance for Renewable Clean Hydrogen Energy Systems, or ARCHES. The facility was part of a competitive effort by the Biden administration nationally to develop hydrogen projects that could replace planet-warming fossil fuels, especially in sectors that work hard to emit carbon such as heavy trucks and port operations.
Also cut was $4 million awarded to California under the Effective Code Implementation (RECI) program, which supports new energy-efficient building codes.
In a statement, Gov. Gavin Newsom said the reductions in electricity and infrastructure would save an estimated $3 billion in annual health costs associated with air pollution. The cuts would also undermine the nation’s position as a global leader in the clean energy transition, he said.
“California will fight for these jobs, this infrastructure, and the global clean energy competition that the Trump administration has given to China,” Newsom said.
Since Trump’s election, more than 165,000 jobs in the clean energy sector have been lost or delayed, according to a tracker from the nonprofit Climate Power, which says projects taken offline would have produced enough electricity to power the equivalent of 13 million homes.
Meanwhile, residential electricity bills are expected to increase by about 12% nationwide by 2025 — from 15.9 cents per kilowatt hour in January to 17.8 cents at the end of November, according to the latest available data from the US Energy Information Administration.
