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DOE Settles Second Federal Lawsuit Over Canceled Blue-State Clean Energy Grants, Agrees to Reinstate 11 Awards Worth $82.1 Million

DOE Settles Second Federal Lawsuit Over Canceled Blue-State Clean Energy Grants, Agrees to Reinstate 11 Awards Worth $82.1 Million
Since our June 12 coverage of U.S. District Judge Amit Mehta's ruling, new details have emerged about what DOE actually conceded in the settlement: the department agreed not to contest that geography in blue states was 'a primary reason' for the cancellations. Energy Secretary Chris Wright is still publicly denying any political motive, even as the legal record says otherwise.

Since federal Judge Amit Mehta vacated the cancellations on June 12, more detail has surfaced about what the Department of Energy actually admitted in the settlement documents, and the gap between those documents and Secretary Chris Wright's public statements is notable.

What DOE Conceded in Court

As part of the settlement, DOE agreed not to contest that "a primary reason" for deciding which grants to terminate was whether the awardee was located in a blue state, according to Latitude Media's reporting on the case. That language mirrors the January ruling in favor of the City of Saint Paul, in which Judge Mehta found the same cancellation rationale.

The 11 reinstated grants, totaling $82.1 million, were all issued by DOE's Office of Energy Efficiency and Renewable Energy. Grantees were located in New York, Oregon, Connecticut, Minnesota, and Colorado. The New Buildings Institute alone had four Oregon grants cut, according to Utility Dive.

The case was brought by a coalition led by the American Institute of Chemical Engineers.

Wright's Denial, Verbatim

The day before Mehta signed this settlement, Energy Secretary Chris Wright was telling Congress a different story. During a June 11 House Science, Space, and Technology Committee hearing, Rep. Gabe Amo (D-R.I.) asked whether DOE planned to reinstate the rest of the canceled awards. Wright's answer, as reported by Latitude Media: "No decisions were made on politics. I keep hearing that charge. Its bullshit. We're gonna say it a million times. Its not true. Its actually false."

Wright did NOT say whether he would reinstate the hundreds of remaining terminated awards.

The Fair Case for Wright's Position

The strongest argument on Wright's side is that a legal settlement is NOT a judicial finding of fact and is NOT a confession of wrongdoing. DOE agreeing "not to contest" a claim in a settlement to resolve litigation is legally distinct from a court ruling that political targeting occurred. Agencies settle cases all the time for reasons that have nothing to do with guilt—cost, litigation risk, judicial economy. Wright's defenders can reasonably argue that reinstating 11 grants under court pressure is not the same as admitting the administration deliberately discriminated against blue-state grant recipients.

That said, this is now the second time DOE has either been ordered or agreed to reinstate grants under exactly this theory. The January Saint Paul ruling, in which Mehta DID make an affirmative finding, established the legal framework. And OMB Director Russ Vought posted publicly on X at the time of the original October 2025 cancellations that nearly $8 billion was being cut for projects in "blue states." Courts typically see such contemporaneous statements as evidence of motive.

How Big Is the Remaining Problem?

These two victories cover a small slice of a much larger dispute. DOE canceled more than 300 awards during last fall's government shutdown, according to Latitude Media. In April, DOE sent Congress a list of nearly 2,000 Biden-era awards it was retaining. Only 18 of those had appeared on the October cancellation list targeting companies in Democrat-led states, per Latitude Media.

Some of DOE's largest terminated projects remain in limbo. The Pacific Northwest Hydrogen Hub and California's Arches Hydrogen Hub are still canceled as of June 13, 2026.

Two more sweeping lawsuits are pending. One was filed by a coalition of states including California and New York; another was filed by the University of California system. Both cases remain unresolved, according to Latitude Media.

The Unresolved Question

Wright told the House committee he would NOT comment on whether DOE plans to reinstate the remaining hundreds of terminated awards. The administration retains the right to appeal the Mehta settlement. Whether DOE contests the two larger pending lawsuits, or whether the Saint Paul and AIChE settlements effectively make those cases easier to win, is the question that will determine whether billions in canceled funding ever flows again.

Sources used for this briefing

This briefing was written by UBH's AI agent — these are the reporting inputs it draws on, linked so you can verify.

center Utility Dive Judge overturns DOE's cancellation of $82.1M in clean energy grants | Utility Dive
left Washington Post DOE head says agency didn’t punish blue states. His lawyers admit it did. - The Washington Post
left Washington Post DOE head says agency didn't punish blue states. His lawyers admit it did.
unknown latitudemedia DOE to reinstate 11 clean energy grants canceled in 'blue states' | Latitude Media