The DOE's Own Court Filing Confirms What Critics Said All Along: Grant Cuts Were Political

The admission came buried in a court filing, but its implications are anything but routine. The U.S. Department of Energy has now acknowledged in writing that its cancellation of $7.6 billion in clean energy grants in October 2025 was not driven by project performance, cost efficiency, or energy security rationale - it was driven by how states voted in November 2024.

That is not an allegation from opponents. It is what DOE's own lawyers put on the record.

What the July 15 Filing Actually Says

The Trump administration's cancellation of $7.6 billion in clean energy grants last year was "based solely on the political identity of the grant recipient's state," the U.S. Department of Energy said in a July 15 court filing first reported by the New York Times.

The language in the filing is unusually blunt. DOE's filing conceded that none of the 2025 grant cancellations were "based on any programmatic, statutory, cost-reduction, or performance-based factor" - the inclusion of grants in the October notice tranche was based solely on the political identity of the grant recipient's state, i.e., whether the recipient's location was in a "Blue State or a non-Blue State."

That admission matters because it directly contradicts what administration officials had been saying publicly for months. The statement contradicts repeated assertions by Energy Secretary Chris Wright and other officials that the projects were canceled because they did not adequately advance the nation's energy needs or had other problems that made them a poor investment of taxpayer dollars. In fact, during a U.S. House Science Committee meeting in June, Rep. Gabe Amo (D-R.I.) asked DOE Secretary Chris Wright if federal grant decisions should be based on how a state votes. Wright answered, "They shouldn't and they weren't."

The filing says otherwise.

The Mechanics of the Cuts

The process, as laid out in court documents, was methodical. According to the court document, in September 2025, the Department of Energy sent a list of more than 2,200 clean energy grants issued under President Biden to the Office of Management and Budget for review. Of that batch, DOE identified 624 that it recommended for termination. DOE moved forward with the termination of 284 of those grants as authorized by OMB, which it announced in October 2025.

In a July 15 filing that is part of a class action lawsuit seeking to overturn the decision, officials said the Energy Department sent to the Office of Management and Budget a list of more than 600 grants it recommended be canceled from recipients in states where former Vice President Kamala Harris won the vote, and that have two senators that caucus with Democrats.

The timing was not incidental. The Energy Department eliminated nearly $8 billion in energy grants last October just hours into a government shutdown, as President Donald Trump attempted to exert leverage on Democratic lawmakers to pass a spending bill. White House Budget Director Russell Vought announced the cuts on social media, describing them as cancellation of "Nearly $8 billion in Green New Scam funding to fuel the Left's climate agenda," listing 16 states that voted for Kamala Harris in the 2024 presidential election.

What Was Actually Cut

For anyone tracking the energy transition on the ground, the project list matters as much as the dollar figure. The cuts are likely to affect battery plants, hydrogen technology projects, upgrades to the electric grid, and carbon-capture efforts, among many others, according to the environmental nonprofit Natural Resources Defense Council.

According to a spreadsheet shared among lobbyists and DOE officials viewed by POLITICO's E&E News, the cancellations include two major hydrogen hub projects led by the Office of Clean Energy Demonstrations, nearly half of the direct air capture hub grants, and a sprawling spread of smaller projects administered by the Office of Energy Efficiency and Renewable Energy and the Grid Deployment Office.

The hydrogen hub cancellations deserve particular attention. These were not early-stage concept awards - they were projects that had already cleared DOE's rigorous selection process and in some cases had signed grant agreements. Several of DOE's largest projects awarded to Democrat-led states remain terminated, including the Pacific Northwest Hydrogen Hub and the Arches Hydrogen Hub in California. The ARCHES hub - the Alliance for Renewable Clean Hydrogen Energy Systems - had been awarded $1.2 billion under the Biden administration. California's regional hydrogen hub was projected to create hundreds of thousands of new jobs throughout the state, drive cutting-edge technological innovation, and help the United States maintain its domestic energy dominance.

Among the canceled grants were 79 for California - more than any other state on the list - totaling $2.1 billion, as well as $1.2 billion in future funding expected for the state's hydrogen hub, ARCHES.

Photo: Artem Labunsky / Unsplash

Courts Are Pushing Back

Some of the cancellations have not held up in court. A federal judge ruled that the Trump administration acted illegally when it canceled $7.6 billion in clean energy grants for projects in states that voted for Democrat Kamala Harris in the 2024 election. U.S. District Judge Amit Mehta said the administration's action violated the Constitution's equal protection requirements.

The DOE's Inspector General has also been drawn in. Inspector General Sarah B. Nelson said the lawmakers' letter "highlights important issues regarding the department's administration of financial assistance," and announced an audit to review the Department of Energy's processes when canceling financial assistance and whether those cancellations were in accordance with established criteria.

The case at the center of the July 15 filing - Thakur v. Trump - has been ongoing since last spring. The lawsuit, brought by a group of researchers from the University of California, argues the administration unlawfully targeted federal grants for political reasons. Federal lawyers also acknowledged in the filing that they used keywords related to diversity, gender, vaccine hesitancy and COVID-19 to screen for projects that ran afoul of the Trump administration's priorities.

The OMB Rule That Could Make This Permanent

The court battles are significant, but they address past cancellations. The more consequential question is whether the administration is now trying to codify this approach going forward.

On May 29, 2026, the White House Office of Management and Budget released a proposed rule titled "Regulation for Federal Financial Assistance," revising the entirety of federal grantmaking and federal cooperative agreements in America, with only a 45-day public comment period, which ended on July 13, 2026.

Perhaps the most significant structural change in the proposal is a new requirement that discretionary awards undergo review by one or more senior political appointees (or their designees) before issuance. More than $1 trillion in annual federal grants for research, local governments, and small businesses faces new presidential alignment requirements.

Democratic lawmakers argue the proposal "represents dangerous executive overreach designed to usurp Congress's constitutional power of the purse and replace objective, merit-based grantmaking with a system highly vulnerable to government corruption and political cronyism." They warn the OMB rule would enable political appointees to terminate grants for virtually any reason they please, which will put critical energy projects on the chopping block and scare private investment away.

The White House OMB has so far received 90,000 public comments on its plans as scientific and other groups rally against them. OMB has identified October 1, 2026, as the anticipated effective date for a final rule.

What This Means for the Energy Transition

The immediate damage is measurable: hundreds of projects stalled or cancelled, billions in committed public funding clawed back, and private co-investors left holding stranded development costs. The longer-term damage is harder to quantify but potentially more serious.

Federal grants function as a de-risking mechanism. They allow developers to attract private capital into technologies - green hydrogen, long-duration storage, direct air capture - that are not yet commercially self-sustaining. When those grants become contingent on electoral geography rather than project merit, the signal to private investors is clear: federal support is not a reliable anchor for a financing stack.

Throughout 2025, DOE canceled hundreds of projects totaling more than $7.5 billion, left others in project-ending limbo, conducted mass layoffs, and conducted a restructuring effort that dropped two renewable energy offices, realigning the agency under nuclear and fossil fuel priorities.

The July 15 filing does not change what happened to those projects. But it does change the legal and political terrain around them - and it makes it considerably harder for the administration to argue, in any future proceeding, that its grant decisions are insulated from judicial review on equal protection grounds.

The court cases will continue. The OMB rulemaking will proceed. And the projects that were cancelled - the hydrogen hubs, the battery plants, the grid upgrades - will either be reinstated, restructured, or abandoned. For each one, the gap between announced capacity and financed, operating capacity just got wider.