The cancellation of clean energy funds violated the U.S. Constitution.

A U.S. federal court has ruled in favor of the city of Saint Paul (Minnesota) and organizations supporting the energy transition, finding that the U.S. Department of Energy unlawfully canceled billions of dollars in federal clean energy grants. According to the court, the administration’s decisions violated the Fifth Amendment to the U.S. Constitution, which guarantees equal treatment.

Dispute over USD 7.6 billion

The case concerns the withdrawal in October of nearly USD 7.6 billion in previously awarded funding for projects related to:

• solar energy and energy storage,
• development of hydrogen supply chains,
• improvements in energy efficiency,
• electric vehicle charging infrastructure.

The canceled grants applied to 16 states that supported Kamala Harris in the 2024 presidential election and were governed by Democratic governors. Projects in states that voted for Donald Trump, however, were preserved – even though they often belonged to the same Department of Energy programs and had identical objectives.

“Lack of rational justification”

Judge Amit Mehta ruled that the administration failed to demonstrate how selecting beneficiaries based on the electoral preferences of state residents could serve a “legitimate government interest.”

“There is no basis to claim that canceling grants in states that voted for Democratic candidates advances the agency’s energy goals more than canceling analogous grants in Republican states,” the judge wrote in the justification.

Government’s arguments

During the proceedings, the U.S. Department of Energy argued that the decisions were substantive in nature and resulted from a review of projects in terms of:

• economic viability,
• return on investment for taxpayers,
• consistency with new energy policy priorities.

The department’s lawyers even argued that a state’s “electoral history may be a proxy for legitimate policy criteria.” The court unequivocally rejected this argument.

Consequences of the ruling

The ruling directly applies only to the plaintiffs in the case – the city of Saint Paul and six non-governmental organizations – who are to be immediately paid a total of USD 27.6 million. At the same time, experts emphasize that the judgment opens the door to further lawsuits by other beneficiaries. In October, 321 grants covering more than 230 projects nationwide were canceled.

In addition, the Department of Energy’s decisions are currently being reviewed by the agency’s inspector general. The ongoing audit aims to determine whether the withdrawal of funds was politically motivated and whether it complied with applicable procedures.

Significance for the energy transition

The case is significant not only legally, but also systemically. It highlights the constitutional limits on using energy policy as a tool of partisan political struggle. For local governments and organizations implementing renewable energy projects, it sends a clear signal that once awarded and contracted, federal funds cannot be arbitrarily withdrawn for political reasons.

In the long term, the ruling may strengthen the stability of financing for the energy transition in the United States – regardless of changing administrations and their ideological priorities.