San Francisco sues DOE over anti-DEI rule threatening energy funds

San Francisco went to federal court Thursday to stop the U.S. Department of Energy from attaching what city officials call an unlawful anti-DEI condition to energy money that supports local clean-air work, from efficiency upgrades to EV charging.

The lawsuit, filed in U.S. District Court for the Northern District of California against the Energy Department and Energy Secretary Christopher Wright, challenges newly announced Standard Terms and Conditions that the city says add a “Discrimination Condition” to all DOE funding. San Francisco argues the requirement is ambiguous, unauthorized by Congress, and meant to pressure the city into dropping its own policy goals.

City officials say the stakes are not abstract. San Francisco has relied on DOE dollars for energy efficiency, conservation, electric vehicle infrastructure, and renewable energy deployment for years. The complaint says the city has worked with DOE’s Clean Cities and Communities Coalition Program for more than 30 years and has recently been awarded Clean Cities funding, but access to that money is now threatened.

Local reporting has placed the specific grant at issue at more than $130,000. The broader concern is that a rule written into grants, cooperative agreements, and other financial assistance awards could interrupt work residents would notice first: building upgrades that lower utility use, faster rollout of EV infrastructure, and continued investment in cleaner energy systems that help hold down local costs.

The city framed the case as a direct challenge to illegal conditions on energy grants that help reduce fossil fuel emissions. That framing fits San Francisco’s long-running clean-energy profile. In 2024, the city was named the top U.S. city for energy efficiency and greenhouse-gas reductions in ACEEE’s City Clean Energy Scorecard. In 2025, it won first place in the large-city category of the U.S. Conference of Mayors’ Climate Protection Awards for cutting emissions, delivering 100% renewable electricity, and expanding access to clean affordable energy.

The new filing also extends San Francisco’s broader legal fight with the federal administration. In January, City Attorney David Chiu said his office had filed 14 lawsuits against the administration over the previous year and had preserved billions of dollars in federal funding in the process. This case puts a smaller dollar amount on the line, but city officials say the policy fight could shape how San Francisco keeps financing the climate projects that touch neighborhoods across the city.