New Jersey and a dozen other states have sued the federal government for terminating billions of dollars in funding for energy affordability programs.
The attorneys general argue that the Trump administration illegally withdrew grants from projects in the fall, circumventing provisions of the Inflation Reduction Act and Infrastructure Investment and Jobs Act and violating Congress's exclusive power to appropriate funds. The lawsuit claims the move was also a way to punish Democratic-led states. All of the grants that the Department of Energy terminated in early October, with one exception, were earmarked for blue states.
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Just days before the cuts were announced, President Donald Trump had threatened to take action against Democrats if the looming government shutdown commenced.
"They're taking a risk by having a shutdown," he said. "We can do things during the shutdown that are irreversible, that are bad for them and irreversible … like cutting vast numbers of people out, cutting things that they like, cutting programs that they like."
The attorneys general cite further evidence that the cuts were "political retribution." In a separate lawsuit, the Trump administration admitted that "the political identity of a terminated grantee's state, including the fact that the state supported Vice President Kamala Harris in the 2024 election, played a preponderant role in the October 2025 grant termination decisions."
The terminations impacted two cooperative agreements with Rutgers University. The New Jersey college, along with the state's public utilities board, was set to receive $3.2 million to develop more energy efficient building standards and start a pilot program to demonstrate the results. The project would have saved New Jersey commercial property owners and tenants $3.8 billion to $15.4 billion over the course of five years, the suit claims.
Congress had awarded Rutgers an additional $1.7 million to research agrivoltaic systems, which integrate solar arrays onto working farmland. The university "vastly scale(d) down its work" after the grant was terminated, the complaint said.
New Jersey Acting Attorney General Jennifer Davenport vowed to reverse the federal government's "reckless and illegal attempts to stand in the way of affordable energy projects that would drive down your utility bills," according to a statement. She and 12 other state prosecutors are asking the court to restore their funding and bar the Trump administration from canceling it in the future based on "policy preferences" or the state the grant would benefit.
The other states on the suit are California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin.
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