California Sues Trump Administration Over Termination of Energy and Infrastructure Funding

Attorney General Bonta leads coalition challenging illegal cancellation of $1.2 billion in clean energy projects

Published on Feb. 23, 2026

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California Attorney General Rob Bonta, along with the Governor's Office of Business and Economic Development and the California Energy Commission, has filed a lawsuit against the Trump Administration for illegally terminating funding for congressionally mandated energy and infrastructure programs. The lawsuit challenges the U.S. Department of Energy and Office of Management and Budget's decision to cancel over $1.2 billion in federal funding for clean energy projects in California, including the ARCHES hydrogen program and the RECI energy efficiency initiative.

Why it matters

The termination of this funding will result in the loss of over 200,000 union jobs in California, rising energy prices, and increased pollution and health impacts on communities. The lawsuit alleges that the Trump Administration's actions violate the separation of powers and undermine bipartisan legislation passed by Congress to invest in clean energy and infrastructure.

The details

The lawsuit was filed in the U.S. District Court for the Northern District of California and challenges the Trump Administration's decision to terminate billions of dollars in energy and infrastructure awards nationwide. Specifically in California, $1.2 billion in federal funding for the ARCHES hydrogen program and $4 million under the RECI energy efficiency program was terminated. The lawsuit alleges that the termination of this funding was unlawful and violated the constitutional separation of powers.

  • On January 20, 2025, President Trump issued executive orders declaring a 'national energy emergency' and 'Terminating the Green New Deal'.
  • In May 2025, the Department of Energy issued a policy memo asserting it would subject energy and infrastructure projects to a 'review' process to eliminate the programs.
  • In late September 2025, as a government shutdown loomed, President Trump told reporters he could 'do things during the shutdown that are irreversible' to attack Democrats, including 'cutting programs that they like'.
  • The next day, OMB Director Russell Vought posted on X that DOE would be terminating nearly $8 billion in 'Green New Scam' funding.

The players

Rob Bonta

The Attorney General of California who is leading the coalition lawsuit against the Trump Administration.

Gavin Newsom

The Governor of California who criticized the Trump Administration's actions and vowed to fight for the jobs and infrastructure threatened by the funding cuts.

Dee Dee Myers

The Senior Advisor to Governor Newsom and Director of the Governor's Office of Business and Economic Development, who stated the ARCHES funding cancellation was a 'shortsighted decision' that threatens California's hydrogen market.

David Hochschild

The Chair of the California Energy Commission, who said the Trump Administration's termination of grants like ARCHES and RECI undermines energy independence and makes electricity more expensive for consumers.

Chris Wright

The Secretary of the U.S. Department of Energy, who is named as a defendant in the lawsuit.

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What they’re saying

“The President claims to seek 'American Energy Dominance' but, in California, his unlawful termination of over $1.2 billion in total funding for crucial clean energy projects means over 200,000 union job cuts, rising energy prices, and higher rates of pollution that wreak havoc on our health.”

— Rob Bonta, Attorney General of California (Independent.com)

“We will not allow Trump to sell out our future to his biggest donors. Trump didn't just tear up a contract: he defied Congress, jeopardized more than 200,000 good-paying jobs, and robbed billions of dollars in health savings from communities that have been hit the hardest by pollution. We're not letting that stand. California will fight for these jobs, this infrastructure, and the global clean energy competitiveness that the Trump administration has ceded to China.”

— Gavin Newsom, Governor of California (Independent.com)

“The cancellation of ARCHES' funding was a shortsighted decision from the Trump Administration, one that threatens the promise of California's hydrogen market while the rest of the world surges ahead in its development.”

— Dee Dee Myers, Senior Advisor to Governor Newsom and Director of the Governor's Office of Business and Economic Development (GO-Biz) (Independent.com)

“California is building the electric grid of the future, and we are doing so by slashing emissions, advancing innovation, and focusing on affordability for consumers. The Trump Administration's termination of grants like ARCHES, RECI, and so many other innovative clean energy programs undermine energy independence and make electricity more expensive for consumers. Not on our watch.”

— David Hochschild, Chair of the California Energy Commission (Independent.com)

What’s next

The judge in the case will decide whether to grant a permanent injunction to stop the Trump Administration from interfering with the energy and infrastructure programs.

The takeaway

This lawsuit highlights the ongoing battle between California and the Trump Administration over clean energy and climate policy. The state is fighting to protect critical investments in hydrogen, energy efficiency, and other clean technologies that were threatened by the President's political agenda to roll back environmental regulations and programs.