California Sues Trump Over $1.2 Billion Energy Funding Cuts

Feb 19, 2026, 2:24 AM
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California has initiated a lawsuit against former President Donald Trump, challenging his administration's decision to terminate over $1.2 billion in federal funding for essential clean energy projects. This lawsuit, filed in the US District Court for the Northern District of California, is part of a broader coalition effort involving 13 states and addresses what California Attorney General Rob Bonta describes as "unlawful" actions that threaten jobs, energy prices, and public health across the state.
The lawsuit specifically targets the US Department of Energy (DOE) and the Office of Management and Budget (OMB) for their decisions to cancel funding allocated under the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (IIJA). The terminated funds include not only the $1.2 billion for the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) but also $4 million for the Resilient and Efficient Codes Implementation (RECI) program.
Attorney General Bonta criticized the Trump administration for what he termed "cherry-picking" funding at the expense of hardworking Americans, stating that the losses could lead to over 200,000 job cuts and increased pollution in California. "The President is stifling innovation and the economy for the sake of partisan retribution," Bonta noted, emphasizing the detrimental effects on public health and the environment.
Governor Gavin Newsom expressed similar sentiments, asserting that the termination of these funding programs represents a significant threat to California's clean energy future. He highlighted that the cuts would not only hamper job creation but could also result in nearly $3 billion in annual health savings being lost due to worsened air quality. "California will fight for these jobs, this infrastructure, and the global clean energy competitiveness that the Trump administration has ceded to China," Newsom stated.
The ARCHES program was designed to foster the development of a clean hydrogen ecosystem, aiming to replace fossil fuels in several sectors, including public transportation and heavy-duty trucking. The initiative could potentially eliminate 2 million metric tons of carbon emissions annually, equivalent to the output of approximately 445,000 gasoline-powered cars. The cancellation of the funding is viewed as a setback not just for California but for national efforts to combat climate change and promote renewable energy.
The lawsuit argues that the terminations violate constitutional principles and the Administrative Procedure Act, which requires government agencies to uphold fair and transparent processes in their decisions. The complaint seeks a court ruling to declare the actions unlawful and to prevent the administration from further interfering with these critical energy programs.
This legal challenge is indicative of a larger pattern, as California has previously filed numerous lawsuits against the Trump administration, with this marking the state's 58th since he took office. The coalition includes attorneys general from Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont, and Wisconsin, reflecting widespread concerns over the impact of the funding cuts on both state economies and environmental goals.
As the legal battle unfolds, the implications of the funding cuts extend beyond just financial losses. A report from Climate Power indicates that over 165,000 clean energy jobs have been lost or delayed due to federal policy changes since Trump's election. The cuts are anticipated to exacerbate the already rising residential electric bills, which have seen a 12% increase nationwide in 2025.
As California takes a stand against these funding cuts, it aims to reinforce its commitment to clean energy and economic resilience. The outcome of this lawsuit may not only influence energy policies within California but could also set a precedent for how federal funding for clean energy initiatives is managed across the country.
In summary, California's lawsuit against the Trump administration highlights the ongoing tensions between state-led climate initiatives and federal policy decisions, with significant implications for job creation, public health, and the environment.

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