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Feb 18, 2026

California files lawsuit against Trump for illegally terminating $1.2 billion in energy and infrastructure programs

What you need to know: Governor Newsom continues protecting California's economy and energy goals – announcing a new lawsuit to block the Trump administration from illegally terminating $1.2 billion in energy and infrastructure programs.

OAKLAND – Governor Newsom's administration today filed a lawsuit challenging the Trump administration's unlawful decision to terminate $1.2 billion in funding for congressionally mandated energy and infrastructure programs. These terminations threaten over 200,000 new family-sustaining jobs and undermine programs slated to save nearly $3 billion in health costs per year and improve the health of Americans who have suffered from some of the worst air quality in the nation.

The lawsuit, filed with Attorney General Rob Bonta and a coalition of attorneys general, alleges that the termination and abandonment of $1.2 billion in federal funding for ARCHES (Alliance for Renewable Clean Hydrogen Energy Systems) and $4 million under the Resilient and Efficient Codes Implementation (RECI) program violate the constitutional separation of powers, as the funding was approved and appropriated by bipartisan majorities in Congress.

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.

Governor Gavin Newsom

"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," said Attorney General Bonta. "The President is cherry-picking this funding at the expense of hardworking Americans and stifling innovation and the economy for the sake of partisan retribution. My office will continue to hold the President and his administration accountable for breaking the law."

"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," said Dee Dee Myers, Senior Advisor to Governor Newsom and Director of the Governor's Office of Business and Economic Development (GO-Biz). "Today's filing is yet another sign that we will not back down from this threat—we'll keep pushing forward in our effort to create a carbon-neutral economy that benefits all California's residents."

"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," said CEC Chair David Hochschild. "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."

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In July 2024, the U.S. Department of Energy (DOE) and ARCHES announced the official signing of a landmark $12.6 billion agreement—the largest in DOE history—to build a clean, renewable hydrogen hub in California. In 2023, California was selected as a national hydrogen hub; it was the first of seven to sign its agreement with DOE, which included up to $1.2 billion in federal funding.

The ARCHES hub was designed to create a network of clean, renewable hydrogen supply and demand and cut fossil fuel use throughout California.  With the ultimate goal of decarbonizing public transportation, heavy-duty trucking, and port operations, the new ecosystem would remove 2 million metric tons of carbon per year, roughly equivalent to the annual emissions of 445,000 gasoline-fueled cars.

Trump's economic failure

Trump's unlawful cuts to clean energy and infrastructure projects — and the jobs that come with them — are part of a broader pattern of reckless and illegal actions by his administration. They also reflect failed economic policies that leave American families paying the price.

Under Trump's economy,  job growth has fallen to its lowest levels since 2009. Growth stagnated in 2025, with losses in some sectors including manufacturing. The pattern has continued into 2026, with layoffs in January the highest since the Great Recession.

American families are also feeling the pain of Trump's chaotic tariff policies, which are raising the price of food and essential goods and costing American households an average of $1,000 each last year.

A majority of Americans now believe that Trump's policies are making their lives more difficult and less affordable

California's climate leadership

Pollution is down and the economy is up. Greenhouse gas emissions in California are down 21% since 2000 — even as the state's GDP increased 81% in that same time period, all while becoming the world's fourth largest economy.

California also continues to set clean energy records. In 2023, the state was powered by two-thirds clean energy, the largest economy in the world to achieve this level. California has also run on 100% clean electricity for part of the day almost every day last year.

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Since the beginning of the Newsom Administration, battery storage has surged to nearly 17,000 megawatts — a 2,100%+ increase, and over 30,000 megawatts of new resources have been added to the electric grid. California now has 33% of the storage capacity estimated to be needed by 2045 to reach 100% clean electricity.

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