DOE Grant Termination Shutdown Show Down

Yesterday, the Department of Energy (“DOE”) announced its termination of 321 grants and other awards supporting 223 energy projects.  The terminated awards were issued by the Office of Clean Energy Demonstrations, Office of Energy Efficiency and Renewable Energy, Office of Fossil Energy, the Grid Deployment Office, the Office of Manufacturing and Energy Supply Chains, and the Advanced Research Projects Agency-Energy.

DOE stated that the terminations were in furtherance of its May 15, 2025 policy requiring DOE to conduct additional diligence of existing grants on a case-by-case to “identify wasteful spending,” although public reporting indicates all of the canceled awards are in states with Democratic leadership.  At least some of the terminated awards appear to have already elapsed prior to DOE’s action. 

As with the May 2025 grant terminations, DOE’s announcement informed grant recipients that they have 30 days to administratively appeal the grant terminations.  That process is governed by 2 C.F.R. § 910.128, which articulates a recipient’s rights to submit a written appeal of a termination notice, request a meeting with DOE officials, and propose revisions to their grant awards that address the agency’s concerns.  Numerous companies appealed DOE’s terminations in May 2025; the agency’s review of those appeals largely remains ongoing.

In addition to pursuing administrative appeals, companies may elect to litigate their grant terminations, although the appropriate venue, cause of action, preferred remedy, and case strategy will vary on a case-by-case basis.  The Crowell & Moring team has been advising clients on these issues and emerging case law, and continues to monitor developments in the rapidly shifting grant litigation landscape.