Sacramento, California – California Attorney General Rob Bonta today led a coalition of 13 states in filing a lawsuit against the Trump administration, challenging the recent termination of billions of dollars in federal funding for congressionally mandated energy and infrastructure projects. The legal action, announced Wednesday, February 18, 2026, centers on the administration’s decision to halt awards allocated through the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (IIJA), sparking accusations of political retribution and raising concerns about the future of clean energy initiatives nationwide. This marks California’s 58th lawsuit against the current presidential administration since it took office last year.
The lawsuit, filed in the U.S. District Court for the Northern District of California, specifically targets actions taken by the United States Department of Energy (DOE), DOE Secretary Chris Wright, the Office of Management and Budget (OMB), and OMB Director Russell Vought. At the heart of the dispute is the cancellation of approximately $2.7 billion in funding, with California alone losing access to $1.2 billion earmarked for the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) and an additional $4 million for the Resilient and Efficient Codes Implementation (RECI) program. The states argue that the funding cuts represent a clear overreach of executive power and a violation of the constitutional separation of powers, as the funds were approved by bipartisan majorities in Congress.
Legal Challenge Focuses on Congressional Authority
The core argument presented by Attorney General Bonta and his colleagues rests on the principle that the executive branch does not have the authority to unilaterally overturn decisions made by Congress regarding appropriations. The lawsuit alleges that the Trump administration’s actions violate both the constitutional separation of powers and the Administrative Procedure Act, which mandates fair and transparent procedures for agency decision-making. The complaint asserts that the terminated funding was lawfully allocated through established legislative processes and that the administration’s decision to rescind it was arbitrary and capricious. “These aren’t optional programs – these are investments approved by bipartisan majorities in Congress, and the President doesn’t get to cancel them simply because he disagrees with them,” Bonta stated during a press conference. The official press release from the California Attorney General’s office details the specifics of the legal challenge.
Joining California in the lawsuit are the attorneys general of Washington and Colorado, who co-led the effort, as well as Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont, and Wisconsin. This broad coalition underscores the widespread concern over the administration’s actions and the potential impact on clean energy development across the country. The states contend that the funding cuts will not only hinder progress towards a sustainable energy future but also lead to significant economic consequences, including job losses and increased energy costs.
Impact on California’s Clean Energy Projects
The $1.2 billion in funding rescinded from California’s ARCHES project represents a substantial setback for the state’s ambitious plans to develop a clean hydrogen hub. As detailed in a July 2024 article in the Los Angeles Times, the ARCHES project aims to establish a regional center for the production, storage, and distribution of clean hydrogen, a fuel source with the potential to decarbonize hard-to-abate sectors such as heavy-duty transportation and industrial processes. The project was envisioned as a key component of California’s broader strategy to achieve its climate goals and reduce reliance on fossil fuels. The loss of funding jeopardizes the project’s timeline and could significantly diminish its scope.
The $4 million cut from the Resilient and Efficient Codes Implementation (RECI) program will also impact California’s efforts to improve energy efficiency in buildings. The RECI program supports the adoption of updated building codes that promote energy conservation and reduce greenhouse gas emissions. These codes are crucial for lowering energy consumption in both residential and commercial buildings, contributing to lower utility bills and a smaller carbon footprint. The reduction in funding will limit the state’s ability to implement these codes effectively and could slow progress towards a more sustainable built environment.
Administration Cites Economic Concerns and Policy Differences
The Trump administration has defended its decision to terminate the funding, arguing that the projects did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment for taxpayers. In a statement released following the announcement of the cuts, OMB Director Russell Vought referred to the funding as part of a “Green New Scam” and asserted that the administration is prioritizing energy independence and economic growth. The Center Square reported that Vought posted on X (formerly Twitter) claiming the administration was canceling “nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda” in 16 states.
However, critics contend that the administration’s rationale is disingenuous and motivated by political opposition to clean energy initiatives. They point to the fact that many of the affected projects were selected through a competitive process and had undergone rigorous evaluation by the Department of Energy. They argue that the long-term economic benefits of investing in clean energy – including job creation, reduced healthcare costs, and a more resilient energy system – outweigh any short-term financial considerations. Governor Gavin Newsom, in a statement released Wednesday, condemned the cuts as an attack on California’s economy and its leadership role in the clean energy transition, stating that the state “will fight for these jobs, this infrastructure, and the global clean energy competitiveness that the Trump administration has ceded to China.”
Broader Implications for Clean Energy Investment
The lawsuit filed by California and its allies has broader implications for the future of clean energy investment in the United States. The outcome of the case could set a precedent regarding the extent of the executive branch’s authority to alter or rescind funding allocations approved by Congress. If the court rules in favor of the states, it would reaffirm the principle of congressional control over the purse strings and could deter future attempts by the executive branch to undermine legislatively mandated programs. Conversely, a ruling in favor of the administration could embolden it to further pursue its agenda of dismantling clean energy policies.
The cuts also raise concerns about the stability and predictability of federal funding for clean energy projects. Investors and developers rely on consistent government support to make long-term investments in these technologies. The administration’s abrupt decision to terminate funding creates uncertainty and could discourage future investment, hindering the deployment of innovative clean energy solutions. According to a tracker from the nonprofit Climate Power, more than 165,000 jobs in the clean energy sector have been lost or delayed since the current administration took office. Residential electric bills have also increased nationwide, rising approximately 12% in 2025, from 15.9 cents per kilowatt hour in January to 17.8 cents at the end of November, according to data from the U.S. Energy Information Administration.
Next Steps and Potential Outcomes
The lawsuit is currently pending before the U.S. District Court for the Northern District of California. The court is expected to schedule a hearing on the matter in the coming weeks, after which it will consider the arguments presented by both sides and issue a ruling. The timeline for a final decision is uncertain, but legal experts anticipate that the case could grab several months to resolve. The Department of Energy and the Office of Management and Budget did not immediately respond to requests for comment regarding the lawsuit.
The outcome of this legal battle will have significant ramifications for California’s clean energy ambitions and for the broader national effort to address climate change. The states involved are determined to defend their right to access federal funding that was lawfully allocated by Congress and to protect the investments that are crucial for building a sustainable energy future. The case is being closely watched by stakeholders across the country, as it could shape the trajectory of clean energy policy for years to come.
Key Takeaways:
- California and 12 other states are suing the Trump administration over the cancellation of $2.7 billion in clean energy funding.
- The lawsuit alleges a violation of the constitutional separation of powers and the Administrative Procedure Act.
- The cuts impact key projects in California, including the ARCHES hydrogen hub and the RECI building codes program.
- The administration defends its decision by citing economic concerns and policy differences.
- The outcome of the case could have significant implications for the future of clean energy investment nationwide.
The next step in this legal challenge will be a hearing before the U.S. District Court for the Northern District of California. We will continue to provide updates as the case progresses. Share your thoughts on this key issue in the comments below.
