Big Beautiful Bill Means Big Cuts for Clean Energy Manufacturers
On March 20, 2025, House Republicans passed the “Big Beautiful Bill” (BBB) as part of H.R. 1, a sweeping legislative package that includes dramatic rollbacks of many of the clean energy tax credits established under the Inflation Reduction Act (IRA). While the bill has little chance of advancing in the Senate in its current form, its proposed cuts offer a window into shifting political priorities and could have significant implications for the U.S. clean energy manufacturing sector.
Subtitle C of the bill, titled “Make America Win Again,” proposes to sunset, repeal, or restrict nearly every major clean energy tax credit under the IRA. Among those affected are credits for clean vehicle purchases (Section 25E), commercial clean vehicles (Section 45W), alternative refueling infrastructure (Section 30C), residential energy efficiency improvements (Sections 25C and 25D), new energy efficient homes (Section 45L), and advanced manufacturing (Section 45X).
For manufacturers, the most potentially damaging proposals are those that target the clean electricity production and investment credits under Sections 45Y and 48E, and the advanced manufacturing production credit under Section 45X. The bill would not only accelerate the phase-out dates for these credits but would also impose new restrictions on facilities and companies that receive any form of “material assistance” from so-called “prohibited foreign entities,” including entities with even minor Chinese ownership or influence.
These foreign entity provisions mirror similar restrictions proposed in standalone legislation like the BIOSECURE Act, which passed in the House, but stalled in the Senate, and represent an aggressive policy shift toward economic decoupling. The expansive definitions of foreign influence and the scope of the restrictions in the BBB could have a chilling effect on clean energy investment, particularly in sectors like solar panel and electric vehicle (EV) battery manufacturing, where global supply chains are deeply interconnected.
While reducing “dependence on foreign countries” is an easy political statement with bipartisan appeal, the interconnected economic ties developed over past decades have made it literally impossible to reverse in the near term, if ever. The statements by (and actions of) Apple regarding manufacturing of iPhones is but one example. Many industries have similar “impossible” to recreate supply chains, as intentional global interconnectedness has been part of U.S. trade and foreign policy. Closer to home, proposed tariff policies for the auto and other industries threaten to upset foreign relations with Mexico and Canada (even though current trade provisions with our North American neighbors were negotiated under the first Trump term).
In addition to severing incentives for manufacturers with foreign ties, the BBB repeals the ability to transfer clean energy tax credits under IRA Section 6418 — a key tool for helping smaller developers and manufacturers monetize credits and attract financing.
The BBB has sparked pushback from industry stakeholders, including Elon Musk, who argue that the IRA’s tax credits have spurred historic levels of clean energy investment and domestic manufacturing. According to the U.S. Department of Energy, over $120 billion in new manufacturing investments have been announced since the IRA’s passage. The proposed repeals and restrictions could significantly undercut that momentum.
Although the BBB is unlikely to become law in its current form, its provisions could resurface in future negotiations or budget bills. Industry participants should monitor legislative developments closely and consider how foreign ownership structures, supply chain dependencies, and tax credit planning may need to adapt to an evolving policy landscape.
Environmental Law Monitor: Seven County Infrastructure Coalition v. Eagle County: Understanding the Supreme Court’s Momentous Decision on NEPA [Podcast]
In the latest episode of the Bracewell Environmental Law Monitor, Ann Navaro joins hosts Daniel Pope and Taylor Stuart to discuss the implications of the Supreme Court’s ruling in Seven County Infrastructure Coalition v. Eagle County. They delve into the ruling’s clarifications on judicial deference and an agency’s obligations under NEPA. The trio also examine the potential impacts on infrastructure projects in light of this decision.
Episode Highlights
[01:44] The Evolution of NEPA Regulations: Daniel outlines key changes to NEPA regulation during the Trump and Biden administrations, including significant judicial trends.
[05:40] Case Background: Taylor summarizes the 88-mile railroad project at the center of the case and the core legal questions about NEPA’s scope. The central question was whether the Surface Transportation Board was required to consider downstream impacts of the project in its environmental review.
[08:22] Highlights From the Case: Ann, Daniel and Taylor discuss the Court’s focus on judicial deference, agency discretion and clarified limits to NEPA’s procedural scope. They talk through the various layers of the Court’s decision and explain how and why this decision is significant and momentous for NEPA.
[21:29] The Court Rulings Is a Reset for NEPA: As the Supreme Court attempts to provide additional clarity around NEPA, Ann believes the Court’s decision offers a reset for NEPA, ultimately reverting it back to its original intention.
[28:46] The Relevancy of Connected Actions: Ann and Taylor discuss how review of interrelated/connected actions will continue in light of the Seven County Infrastructure Coalition v. Eagle County decision. Ann explains that the Supreme Court has emphasized that interrelated actions are actions pending in front of the same agency.
[38:22] Closing Thoughts on NEPA’s Future: Taylor concludes with final thoughts and questions on the SCOTUS decision, including whether it will reduce litigation and delays.
House Bill 3809 Adds Obligations to Battery Energy Storage Lessees in Texas
On May 29, 2025, House Bill No. 3809 was signed into law by Texas Governor Greg Abbott. Born out of a crop of bills regulating renewable energy, including S.B. 388, S.B. 715, and S.B. 819, H.B. 3809 is the only one to be signed into law this session. It takes effect September 1, 2025 and places additional requirements on certain battery energy storage operators entering into a lease on or after that date. [H.B. 3809, Sections 2 and 3]. Specifically, the bill mandates decommissioning requirements in battery energy storage (BESS) facilities, other than those owned by an electric utility [New Sections 303.001(1)(B) and (5) of the Texas Utilities Code], requires financial assurance to comply with these decommissioning obligations, and sets forth non-waivable provisions in facility leases containing those requirements. As such, H.B. 3809 effectively aligns decommissioning and financial assurance obligations for BESS projects with those already established for wind and solar energy projects.
Key Provisions of H.B. 3809
The two most notable changes H.B. 3809 makes are mandating decommissioning and financial assurance provisions in BESS leases not entered into by an electric utility. These changes, which are designed to protect landowners and the environment, add more obligations to BESS storage lessees by mandating the removal of their facilities.
1. Mandatory Decommissioning Provisions in Lease Agreements
H.B. 3809 introduces a series of amendments to the Texas Utilities Code that mandate facility-removal provisions in battery energy storage leases. The lease must provide that the lessee is responsible for safely removing the facility and storage resources, like transformers and substations. [New Section 303.004(a)(1) of the Texas Utilities Code]. In addition to the facility and storage resources, the lessee must safely remove foundations, buried cables, and overhead lines. [Id. at subsections (a)(3) and (4)]. The lease must also include provisions that make the lessee responsible for disposing of and recycling components. [Id, at Section (b)]. Further, the amendments mandate landowner-requested obligations in leases, including maintaining and removing roads, filling holes, removing rocks with a 12-inch or larger diameter, returning the land to a tillable state, and restoring the surface. [Id. at subsection (d)].
2. Financial Assurance Requirements
H.B. 3809 mandates that BESS lessees that are not an electric utility provide financial assurance to ensure they perform the newly-created facility decommissioning obligations. [New Section 303.005 of the Texas Utilities Code]. Lessees must deliver financial assurance to the landowner before the earlier of the facility lease’s termination date or the facility’s 15th-anniversary date. [Id. at subsection (e)]. Acceptable forms of financial assurance include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit, a bond, or another form of financial assurance reasonably acceptable to the landowner. [Id. at subsection (a)]. The amount of financial assurance must be sufficient to cover the facility removal, component recycling, and surface restoration costs minus the facility salvage value less the value of any portion of the facility already pledged as collateral for existing debt. [Id. at subsection (b)]. An independent third-party Texas-licensed engineer will determine the costs and salvage value. [Id. at subsection (c)(1)]. The lessee shall provide an initial estimated cost of removal and recycling or disposal on or before the 10th anniversary of the facility’s battery operation date, and must update the estimate at least once every five years for the life of the lease. [Id. at subsections (c)(2) and (3)].
Enforcement Provisions
H.B. 3809 introduces a series of legal and procedural safeguards to enforce its new decommissioning and financial assurance requirements. The bill includes a non-waiver clause that forbids contractual waiver of its provisions. [New Section 303.002(a) of the Texas Utilities Code]. It also entitles the landowner to injunctive relief, among other remedies available to the landowner, if their lessee violates the provisions of H.B. 3809. [Id. at subsections (b) and (c)].
Chance Fraser contributed to this article
Regional Grid Operators Attempt to Tackle Resource Adequacy by Fast-Tracking Generator Interconnection
Regional electric grid operators—already facing resource adequacy and reliability challenges with baseload capacity retirements and changes in the generation resource mix—are now grappling with unprecedented increases in near-term electric power demand driven by data centers and new industrial loads. PJM Interconnection, L.L.C. (PJM), Midcontinent Independent System Operator, Inc. (MISO), and Southwest Power Pool, Inc. (SPP) each are attempting to address near-term resource adequacy concerns by expediting interconnection studies for high-priority generation projects.
PJM’s Reliability Resource Initiative (RRI)
PJM was the first among the grid operators to propose an expedited interconnection study process, filing its RRI proposal with the Federal Energy Regulatory Commission (FERC) on 13 December 2024. RRI is a one-time expansion of the eligibility criteria for Transition Cycle #2 in PJM’s existing interconnection queue.1 PJM would evaluate potential RRI projects using market impact and commercial operation date viability criteria,2 with PJM selecting up to 50 projects that would best satisfy the need for reliable capacity that could come online quickly.3
In a 3-1 “close-call” decision issued on 11 February 2025, FERC accepted the proposal, finding that RRI reasonably addressed the possibility of a resource adequacy shortfall driven by significant load growth, premature retirements, and delayed new entry.4
PJM opened RRI’s one-time application window in late February 2025. Of the 94 applications submitted,5 PJM selected 51 projects, which together will provide more than 9,300 MW of incremental capacity to the region.6 Now under study in PJM’s Transition Cycle #2 study process,7 these projects are expected to sign interconnection agreements by January 2027.8
FERC’s order approving PJM’s RRI proposal provided insight into how Commissioners might vote on other grid operators’ expedited interconnection proposals. In the order, Commissioner Rosner noted, if RRI were not a one-time emergency request, he would not find PJM’s proposal to be just and reasonable and he would have had fewer reservations about PJM’s RRI proposal if the commercial operation date viability criteria were stronger.9 In Commissioner Chang’s dissent, she stated she is interested in potential solutions to address looming reliability challenges, but expressed concern that PJM’s proposal compromises FERC’s open access principles with no guarantee that it will actually resolve PJM’s impending capacity shortage.10
Six rehearing requests filed by environmental organizations and others alleged that FERC’s order is arbitrary and capricious and fails the standard for approval under the Federal Power Act. Rehearing parties argue that the RRI proposal is inadequately supported, is a violation of the filed rate doctrine and rule against retroactive ratemaking, violates open access principles, will be ineffectual, and will be harmful to legacy Transition Cycle #2 projects, among other contentions. FERC is expected to issue a rehearing order in the coming months.11
MISO’s Expedited Resource Addition Study (ERAS)
MISO filed its expedited interconnection study process, ERAS, shortly after FERC issued its order approving PJM’s RRI proposal. ERAS differs from RRI in several ways. Unlike RRI, ERAS does not cap the number of projects eligible to participate in the study process. Also, unlike PJM’s process, MISO itself would not select the projects for inclusion in ERAS; instead, projects would be selected by Relevant Electric Retail Regulatory Authorities (RERRAs).12 Further, MISO’s ERAS process would run separately from the general interconnection process and would study projects serially; by contrast, PJM’s RRI integrates with the general interconnection queue and studies projects in the cluster. Additionally, unlike PJM’s one-time window, MISO’s ERAS would accept applications on a quarterly basis until the first of either 31 December 2028 or the completion date of the 2027 study cycle for MISO’s general interconnection queue.13
On 16 May 2025, FERC rejected MISO’s ERAS proposal in a 2-1 decision.14 While the majority agreed that ensuring reliability and resource adequacy is of critical importance, two aspects of MISO’s proposal proved fatal.15 First, although MISO expected to study only tens of ERAS interconnection requests each year, MISO put no limit on the number of participating projects, which could result in an ERAS queue with processing times too lengthy to meet MISO’s reliability needs.16 Second, MISO had not demonstrated that its proposal would actually solve identified reliability needs. Given the unlimited number of interconnection requests that could participate in the ERAS, the ERAS would not ensure the interconnection of critical resources on an expedited basis and resolve resource adequacy needs.17
FERC rejected MISO’s ERAS proposal without prejudice, which means that MISO may refile a modified proposal that addresses the concerns discussed in the order.18 MISO intends to file its revised proposal on 6 June 2025. Opposition is likely.
SPP’s Expedited Resource Adequacy Study (ERAS)
SPP filed its expedited interconnection process, ERAS, on 22 May 2025.19 SPP’s ERAS is a one-time process like PJM’s RRI; however, like MISO’s proposal, SPP’s ERAS would be conducted separately from the regular generator interconnection study process.20 While SPP’s ERAS proposal does not limit the number and type of candidate projects, the resource adequacy deficit of each specific Load Responsible Entity (LRE), as calculated by SPP, would operate to effectively set a capacity ceiling and limit the number of projects that can enter ERAS.21 LREs would select eligible projects, attest to the need for the selected resource’s output, and commit the new resource toward the LRE’s resource adequacy obligations and new transmission service.22 SPP’s ERAS projects would be required to reach commercial operation within five years of the ERAS application window’s closing.23
Like PJM’s RRI and MISO’s ERAS proposals, this proposal is expected to be met with mixed reviews from intervenors. Comments on SPP’s ERAS proposal are due 12 June 2025.
Outlook
The electric regulatory landscape is rapidly changing. A complex confluence of changes in supply and demand is driving proposals for expedited interconnection of high-priority generation and storage projects. On the supply side, grid operators are faced with a shortage of generation capacity due to a variety of factors, such as accelerated retirements of baseload generation, backlogged interconnection queues, and supply chain constraints as well as constraints related to skilled workers. On the demand side, grid operators are expecting substantial increases in load growth from data centers and industrial manufacturing.
Resource adequacy and artificial-intelligence-driven data center development is now a major legal and policy issue appearing in practically all branches and levels of government. On the first day of his presidency, President Donald J. Trump issued Executive Order No. 14156, declaring a national energy emergency and asserting the use of executive emergency powers to address these challenges. On 8 April 2025, the President issued Executive Order No. 14262, finding that the United States is experiencing an “unprecedented surge in electricity demand driven by rapid technological advancements” and directing the Secretary of Energy to expedite the Department of Energy’s (DOE’s) processes for taking emergency action under section 202(c) of the Federal Power Act. In May, DOE issued emergency orders directing MISO and PJM to maintain the operational availability of generation facilities scheduled for shutdown.24 FERC’s approval of expedited interconnection studies for high-priority capacity projects should assist to address near-term resource adequacy concerns in PJM, MISO, and SPP.
Ready To Help
The firm’s Power practice group is closely monitoring these developments and stand ready to assist clients navigating the evolving laws, regulations, and policies surrounding generator interconnection, resource adequacy, and grid reliability.
Footnotes
1 PJM Interconnection, L.L.C., Tariff Revisions for Reliability Resource Initiative, Docket No. ER25-712-000 (filed Dec. 13, 2024).
2 Id. at 30-33. PJM scores RRI projects using (1) market impact criteria, assigning up to 65 points based on unforced capacity, effective load-carrying capability, and location; and (2) commercial operation date viability criteria, assigning up to 35 points based on planned in-service date, project support, uprates, and headroom.
3 Id. at 3, 27.
4 PJM Interconnection, L.L.C., 190 FERC ¶ 61,084, at P 1 (2025) (RRI Order).
5 Reliability Resource Initiative Draws 94 Applications, PJM Inside Lines (Mar. 21, 2025), https://insidelines.pjm.com/reliability-resource-initiative-draws-94-applications/; PJM Interconnection Process Subcommittee, RRI Status Update (published Apr. 22, 2025), https://www.pjm.com/-/media/DotCom/committees-groups/subcommittees/ips/2025/20250424/20250424-item-04—reliability-resource-initiative-status-update.pdf.
6 PJM Chooses 51 Generation Resource Projects to Address Near-Term Electricity Demand Growth, PJM Inside Lines (May 2, 2025), https://insidelines.pjm.com/pjm-chooses-51-generation-resource-projects-to-address-near-term-electricity-demand-growth/ (“The projects consist of 39 uprates and 12 new construction proposals. The uprates apply to existing natural gas, nuclear, coal and onshore wind resources. Of the new projects, half are gas, five are batteries and one is nuclear.”).
7 Reliability Resource Initiative Draws 94 Applications, PJM Inside Lines (Mar. 21, 2025), https://insidelines.pjm.com/reliability-resource-initiative-draws-94-applications/.
8 PJM Interconnection Process Subcommittee, Transition Progress Update (published May 23, 2025), https://www.pjm.com/-/media/DotCom/committees-groups/subcommittees/ips/2025/20250528/20250528-item-03—tc1-tc2-update.pdf.
9 RRI Order, Cmm’rs Rosner and Phillips Concurrence at PP 7, 12. The commercial operation date viability criteria assesses whether the capacity can be constructed and in commercial operation in the near term, i.e., 2028-2031.
10 RRI Order, Cmm’r Chang Dissent at PP 2, 6.
11 PJM Interconnection, L.L.C., Notice of Denial of Rehearing by Operation of Law and Providing for Further Consideration (issued Apr. 14, 2025).
12 A RERRA is “[a]n entity that has jurisdiction over and establishes prices and/or policies for providers of retail electric service to end customers, such as the city council for a municipal utility, the governing board of a cooperative utility, the state public utility commission or any other such entity.” MISO Electric Tariff, Module A (common tariff provisions).
13 Midcontinent Indep. Sys. Operator, Inc., Expedited Resource Addition Study Filing, Docket No. ER25-1674-000, at 24 (filed Mar. 17, 2025).
14Midcontinent Indep. Sys. Operator, Inc., 191 FERC ¶ 61,131 (2025). Commissioners Rosner and See issued concurring opinions, with Chairman Christie dissenting.
15 Id. at PP 199-202.
16 Id. at P 199.
17Id.
18 Id. at PP 1, 25.
19 Southwest Power Pool, Inc., Tariff Revisions to Implement the Expedited Resource Adequacy Study, Docket No. ER25-2296-000 (filed May 22, 2025).
20 Id. at 25.
21 Id. at 29-30.
22 Id. at 30.
23 Id. at 43-44; id. at Proposed Attachment AW, Section 1 (Definitions), “Expedited Resource Adequacy Study Window (ERAS Window).”
24 DOE’s Use of Federal Power Act Emergency Authority, DOE (last visited June 4, 2025), https://www.energy.gov/ceser/does-use-federal-power-act-emergency-authority.
Seven County Infrastructure Coalition v. Eagle County: A Turning Point For The National Environmental Policy Act
Last week, the Supreme Court issued its eagerly awaited National Environmental Policy Act decision in Seven County Infrastructure Coalition v. Eagle County. We were not disappointed. The Court held, 8-0,1 that the U.S. Surface Transportation Board reasonably explained in an environmental impact statement (“EIS”) that the agency did not need to consider the indirect environmental impacts of its decision to approve an 88-mile railroad spur that would connect Uinta Basin oil and gas resources to the national rail network. The Court of Appeals for the D.C. Circuit had set aside the STB’s decision on the basis that the STB did not consider the indirect environmental impacts that would result from upstream oil and gas drilling or from downstream petroleum refining. The Supreme Court reversed.
Apparently hearing our call from last spring that NEPA reforms were necessary to streamline permitting processes, the majority opinion in Seven County acts as a “course correction of sorts,” and an important and substantial step to reign NEPA back in. As the Court describes, “a 1970 legislative acorn has grown over the years into a judicial oak that has hindered infrastructure development under the guise of just a little more process.” In an opinion that will survive decades, the Supreme Court demands a high degree of deference in reviewing agency analyses performed pursuant to NEPA.
The Majority Opinion
The most striking line of the majority opinion2 is that “[t]he bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.” In concluding that courts owe a high degree of deference in the NEPA context, the majority noted that NEPA is a “purely procedural statute that, as relevant here, simply requires an agency to prepare an EIS—in essence, a report.”
The Court marched through each aspect of an agency’s NEPA analysis to which courts owe deference. First, “[t]he agency is better equipped to assess what facts are relevant to the agency’s own decisions,” including whether an EIS is sufficiently detailed. Second, an agency has substantial deference in identifying “significant environmental impacts and feasible alternatives” and the reviewing court must be at its “most deferential” when reviewing such decisions. Third, regarding the scope of an EIS, courts must provide “broad latitude” so that the agency may “draw a ‘manageable line.’”
Notably, the Court distinguished the NEPA deference regime from its recent decision in Loper Bright Enterprises v. Raimondo. When an agency interprets a statute, as in Loper, judicial review of the agency’s interpretation is de novo. In contrast, when the agency exercises discretion granted by a statute or is evaluating issues of fact, the Administrative Procedure Act’s deferential arbitrary-and-capricious review standard applies.
Thus, regarding some of the most litigated NEPA issues where the agency exercises discretion granted by statute (the detail, impacts and alternatives, and scope), the Court instructs that reviewing courts must defer to the agency. In the majority’s words:
When assessing significant environmental effects and feasible alternatives for purposes of NEPA, an agency will invariably make a series of fact-dependent, context-specific, and policy-laden choices about the depth and breadth of its inquiry—and also about the length, content, and level of detail of the resulting EIS. Courts should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness.
In addition to the level of deference owed to agency NEPA decisions, the Court also noted that even if an EIS “falls short in some respects,” that is not necessarily reason to vacate the underlying approval. Thus, the “zone of reasonableness” declared by the Supreme Court is quite broad. Indeed, the Court did not hesitate to clarify that the “adequacy of an EIS is relevant only to the question of whether an agency’s final decision (here, to approve the railroad project) was reasonably explained.”
Central to this particular case was whether the EIS at issue should have evaluated the possible environmental effects from upstream oil drilling and downstream oil refining, projects that were separate from the proposed railway. This question of “reasonably foreseeable impacts” has been a long-debated issue, and one that nearly every presidential administration has opined on. The Supreme Court largely put the issue to bed:
While indirect environmental effects of the project itself may fall within NEPA’s scope even if they might extend outside the geographical territory of the project or materialize later in time, the fact that the project might foreseeably lead to the construction or increased use of a separate project does not mean the agency must consider that separate project’s environmental effects. . . This is particularly true where, as here, those separate projects fall outside the agency’s regulatory authority.
The Court concluded that NEPA requires agencies to focus on the environmental effects of the project at issue. And even then, the agency’s only obligation is to prepare an “adequate report.”
There is one area, however, where the Court suggested that agency determinations may not be subject to the same level of deference: decisions to deny projects based on environmental impacts. In footnote 4, the Court explained that a denied applicant may argue that the agency acted unlawfully in weighing the environmental consequences of a proposed action. In these circumstances, “NEPA does not alter those judicial inquiries.”
The Concurrence
Justices Sotomayor, Kagan, and Jackson concurred in the Court’s reversal, but they would have done so on narrower grounds. Under their view, and the 2004 Supreme Court case Department of Transportation v. Public Citizen, the STB did not need to consider the environmental impacts of upstream oil and gas development or downstream oil refining because the STB is not authorized to consider such impacts under its organic statute. The concurrence explained: “That is the rule of Public Citizen.”
And that leads to the most notable aspect of the concurrence: its framing of the majority opinion as grounding its “analysis largely in matters of policy” and ruling more broadly than necessary to decide the case at hand. The concurrence itself is significant evidence that the majority opinion has significantly shifted the lay of the land in NEPA cases by expressly affording agencies high degrees of deference.
The majority decision will affect all NEPA cases, whereas the concurrence’s reasoning would only have affected decisions where the agency in question is not authorized to consider environmental impacts. Other agencies that approve federal projects, including the U.S. Department of the Interior, the U.S. Forest Service, and the U.S. Nuclear Regulatory Commission, would arguably not be affected under the Public Citizen line of cases because those agencies are directed to consider environmental impacts. Under the majority’s framework, however, all agencies enjoy broad deference in limiting the scope of their analysis or deciding that certain impacts on the environment are not significant.
Practical Takeaways
NEPA litigation has long been used as a tool to dictate a particular outcome of an agency decision and to halt project development. And in many cases, appellants have been successful in those efforts. In this landmark decision, the Court fortified those principles that are core to NEPA. “Simply stated, NEPA is a procedural cross-check, not a substantive roadblock.” At the very least, the Court’s opinion can be expected to deter the most frivolous NEPA litigation.
The Supreme Court repeatedly underscored that judicial review of agency analyses performed pursuant to NEPA are afforded “substantial deference.” This decision can have an immediate impact for all ongoing judicial challenges raised under NEPA. Even in cases where the merits are fully briefed, the government will likely file supplemental briefs or letters explaining why the decision in Seven County further supports the reasonableness of the agency’s explanation.
Over the longer term, Seven County may have substantial salutary follow-on effects that allow for more efficient agency approvals. Indeed, the Court was acutely aware of how stringent judicial review incentivized agencies to bullet-proof their NEPA analyses to avoid judicial reversals: “All of that has led to more agency analysis of separate projects, more consideration of attenuated effects, more exploration of alternatives to proposed agency action, more speculation and consultation and estimation and litigation.”
The Supreme Court opinion was not shy in expressing frustration with the “continuing confusion and disagreement in the Courts of Appeals over how to handle NEPA cases.” The Court’s admonishment and clear command to apply deference should dissuade courts from policymaking from the bench—at least in the NEPA context.
The Court also took head on an issue tangential to the case at hand, but that has “been too often overlooked”—the length of a NEPA document. The Court went out of its way to warn that “[b]revity should not be mistaken for lack of detail,” clearly encouraging agencies and courts to be more efficient in the paperwork.
Although Seven County reviewed an EIS, nothing in the majority opinion’s reasoning or analysis would limit the deferential regime to just the EIS context. Applying Seven County, courts are also likely to apply a high degree of deference to agency decisions that an EIS is unnecessary because the proposed project will not significantly affect the quality of the environment. For this reason, more agencies might decide to pursue environmental assessments rather than EISs.
From the perspective of parties challenging agency NEPA analyses, the effort just became more difficult. Given the Supreme Court’s repeated emphasis that judicial review under NEPA is deferential, challengers will likely need to identify glaring holes in the agency’s analysis or facial inconsistencies in how the agency determines scope or which environmental impacts are significant. It is also possible that challengers will shift their focus to other statutory schemes like the National Historic Preservation Act, Endangered Species Act, or the Clean Air Act, which do indeed impose substantive constraints.
References
1 Justice Gorsuch recused himself from the case. 2 Justice Kavanaugh wrote the majority opinion, in which Chief Justice Roberts and Justices Thomas, Alito, and Barrett joined.
Supreme Court Decision Limits the Opportunity for NEPA to Derail Projects
The U.S. Supreme Court’s recent 8-0 ruling limited the scope of the National Environmental Policy Act (NEPA), the national environmental law that mandates federal agencies to assess the environmental effects of their proposed actions before making decisions. In the May 29, 2025, decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, the Supreme Court found that substantial judicial deference should be afforded to agencies under NEPA, and that NEPA does not require agencies to consider the environmental effects of projects that are separate in time or place from the project at hand.
The case concerned construction of an 88-mile railroad line connecting Utah’s oil-rich Uinta Basin to the national freight rail network to facilitate the transportation of crude oil to refineries along the Gulf Coast. As part of its project review, the Surface Transportation Board (Board) prepared a 3,600-page environmental impact statement (EIS) that addressed significant environmental effects of the project and identified feasible alternatives, as required under NEPA. The Board concluded that the project’s transportation and economic benefits outweighed its environmental impacts and approved the railroad line. Eagle County, Colorado, and several environmental organizations challenged the Board’s EIS and final approval order in federal court. The U.S. Court of Appeals for the D.C. Circuit ultimately vacated the Board’s EIS and final approval order, holding that the Board’s analysis of environmental effects should have included reasonably foreseeable impacts from upstream oil drilling and downstream oil refining projects.
The Supreme Court characterized the D.C. Circuit’s decision as belonging to a line of NEPA cases guided by an overly aggressive judicial approach. According to the Court, NEPA is a purely procedural statute that requires an agency to prepare an EIS, but does not require an agency to weigh environmental consequences in any particular way. The Court further emphasized that NEPA is a “procedural cross-check” to inform agency decision-making, not a “substantive roadblock.” It further criticized the use of NEPA by project opponents as a “blunt and haphazard tool” to stop or slow new infrastructure and construction projects.
When determining whether an agency’s EIS is compliant with NEPA, the Court affirmed that courts should afford “substantial deference” to the agency. The essential determination is “not whether an EIS in and of itself is inadequate, but whether the agency’s final decision was reasonable and reasonably explained.” Thus, courts must defer to agencies so long as they are operating within this “broad zone of reasonableness.”
The Court distinguished Seven County from its recent landmark decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which applied de novo judicial review in cases when an agency interprets a statute. In cases in which an agency exercises discretion granted by statute, judicial review is conducted under the Administrative Procedure Act’s “arbitrary and capricious” standard, under which a court asks whether the agency action was reasonable.
This judicial deference in NEPA cases extends to factual determinations made by agencies about what details are relevant in an EIS. The Court affirmed that an EIS must address the reasonably foreseeable environmental effects of the project at hand. However, the Court also noted that courts should defer to agencies about the scope of analysis, including decisions about how far to go in considering indirect environmental effects from the project at hand and whether to analyze environmental effects from other projects separate in time or place from the project at hand.
Seven County’s limitations on the required scope of agency analysis under NEPA to the direct and indirect environmental effects of the project at hand may streamline agency review of infrastructure, construction, and energy projects. However, uncertainty remains as agencies determine the extent of analysis required during project review, which may differ by agency or types of projects or may change with administrations. The ruling may also cause environmental groups to reconsider when and how to mount challenges to projects under NEPA.
Alexandra Prendergast contributed to this article
Supreme Court Scales Back the NEPA Roadblock to Infrastructure Projects
Overview
On May 29, 2025, the U.S. Supreme Court issued a significant decision clarifying the scope of environmental review required under the National Environmental Policy Act (“NEPA”) for major infrastructure projects. The Court recognized and reined in what infrastructure practitioners have long understood: NEPA strayed far beyond its “procedural” and “informational” roots to become an obstruction to infrastructure projects across the country.
As brief background, a project developer filed an application with the Surface Transportation Board (“STB”) for a proposed 88-mile railroad line in Utah. The STB, pursuant to its NEPA requirements, issued a 3,600-page environmental impact statement (“EIS”) analyzing the environmental effects of the project and ultimately approved the railroad line. Groups challenged the STB’s approval, and the D.C. Circuit vacated the STB’s decision, ordering the STB to analyze the potential “upstream” impacts of the proposed railroad, which included possible increased oil and gas drilling activities in Utah, and potential “downstream” impacts of the railroad, such as increased oil refining in Texas.
The Supreme Court reversed the D.C. Circuit Court’s prior decision, finding that the D.C. Circuit: (1) did not afford substantial deference to the STB required in NEPA cases, and (2) incorrectly ordered the STB to review the environmental effects of projects separate in time and place from the actual 88-mile railroad under consideration.
Substantial Deference to Agencies in NEPA Reviews
First, the Court emphasized that lower courts should provide deference to agencies when evaluating the agencies’ NEPA review of a project. This is because an agency’s environmental review will include “a series of fact-dependent, context-specific, and policy laden choices about the depth and breadth of [the agency’s] inquiry….” Courts should thus afford agencies “substantial deference” when the agencies’ choices are “within a broad zone of reasonableness,” described further as “a rule of reason.”
Reasonably Close Causal Relationship to the Project
Second, the Court reined in the scope of what the environmental review must consider, i.e., the “proposed action.” Future or geographically separate projects that may be built or expanded are not generally part of NEPA’s scope. The Court characterized this finding in legal terms as “proximate causation,” those effects that have a reasonably close causal relationship between the project at hand and the environmental effects of other projects would be included in a NEPA review.
The Court rejected, however, a “but for” causal relationship, providing that even though environmental effects may be reasonably foreseeable, such as increased oil and gas development from the proposed railroad line, lower courts should not second guess an agency’s decision to exclude from NEPA review projects that are separate in time or place from the actual project being considered. The Court noted that the agency may draw a “manageable line” for what it reasonably concludes should be considered. Summarizing this point, the Court stressed that “[a] relatively modest infrastructure project should not be turned into a scapegoat for everything that ensues from upstream oil drilling to downstream refinery emissions.”
Conclusion
While a significant victory for project proponents, this decision does not foreclose the scope of the extent of an environmental review in a NEPA EIS beyond the confines of the actual project. Project proponents should evaluate potential environmental impacts beyond the actual project and analyze whether or not those environmental impacts would be considered “reasonable,” for example:
Does the agency that is making the decision regulate the potentially foreseeable environmental effects?
Are the potentially foreseeable environmental effects geographically separate from the actual project?
Are the potentially foreseeable environmental effects a hypothetical future event?
Are the potential environmental effects speculative?
President’s FY 2026 Budget Requests Would Eliminate CSB, Reorganize CPSC
President Trump’s fiscal year (FY) 2026 budget request for the Chemical Safety and Hazard Investigation Board (CSB) states that the President’s budget proposes to eliminate funding for CSB as part of the Trump Administration’s plans “to move the Nation towards fiscal responsibility and to redefine the proper role of the Federal Government.” The President’s budget request proposes $0 for CSB in FY 2026 with the expectation that CSB begin closing down during FY 2025. CSB’s emergency fund of $844,145 will be appropriated to cover costs associated with closing down the agency.
Authorized by the Clean Air Act (CAA) Amendments of 1990, CSB is an independent federal agency created to investigate chemical accidents that cause death, serious injury, or substantial property damage. Section 7412(r)(6) of Title 42 of the U.S.C. states that CSB members, officers, and employees “shall not be responsible to or subject to supervision or direction . . . of any officer or employee or agent of the Environmental Protection Agency, the Department of Labor or any other agency of the United States except that the President may remove any member, officer or employee of the Board for inefficiency, neglect of duty or malfeasance in office.” According to the FY 2026 budget request, “CSB duplicates substantial capabilities in [EPA] and the Occupational Safety and Health Administration to investigate chemical-related mishaps.” The budget request states that “CSB generates unprompted studies of the chemical industry and recommends policies that they have no authority to create or enforce. This function should reside within agencies that have authorities to issue regulations in accordance with applicable legal standards.”
President Trump’s FY 2026 budget request for the U.S. Consumer Product Safety Commission (CPSC) proposes to reorganize and transfer the functions of CPSC to the U.S. Department of Health and Human Services (HHS) Office of the Secretary as the Assistant Secretary for Consumer Product Safety (ASCPS). The budget request states that “[u]ntil the enactment of authorizing legislation to reorganize, the CPSC will continue to carry out its mission to protect the public from unreasonable risks of injury from consumer products as a standalone agency.” Under the budget request, the ASCPS would receive $135 million, $15.975 million below the FY 2025 enacted budget, to support 459 full-time equivalents (FTE) and operational costs, a reduction of 75 FTEs from the FY 2025 enacted budget.
CPSC was created in 1972 under the Consumer Product Safety Act as an independent federal agency to protect the public against unreasonable risks of injury associated with consumer products; assist consumers in evaluating the comparative safety of consumer products; develop uniform safety standards for consumer products and minimize conflicting state and local regulations; and promote research and investigation into the causes and prevention of product-related deaths, illnesses, and injuries. According to the FY 2026 budget request, “CPSC recommends that the budget, programs, and strategic goals set forward herein be used as a basis for ASCPS to model its future operations.”
House Draft Tax Bill Would Modify Key Energy Tax Credits, Grant Programs and Permitting Process
The U.S. House of Representatives is working to finalize its version of a massive tax and spending bill that Republicans hope to enact on a party-line vote in the coming months. The tax and energy components of the draft include material changes to energy tax incentives, grant programs, and permitting processes, many of which were enacted or modified by the Inflation Reduction Act (IRA) of 2022 to encourage the expansion of green energy investment and production.
Some energy segments fare better than others in the tax title of the House draft. But overall, the changes (outlined below) will negatively impact the development of renewable energy projects in the U.S. Electric vehicle manufacturers and buyers are hard hit by the early termination of popular consumer credits. The solar energy sector will lose a tax credit incentivizing the purchase of solar panels by homeowners, and both solar and battery manufacturers could lose access to key manufacturing credits well before their termination date if they use components or critical minerals imported from certain foreign countries, including China. Another provision accelerates the phase-out of a tax credit for the production of nuclear power to 2032 – earlier than any new projects are expected to come online. That is bad news for technology companies investing in nuclear plants that could provide clean power to meet the needs of high-energy-demand data centers. Oil and gas companies that have invested in green energy might also be disadvantaged by that change and by early termination of the tax credit for hydrogen production. Utilities developing renewable energy say that proposed limits on the transferability of certain tax credits will result in higher customer bills. And foreign investors in U.S. green energy facilities could be impacted by provisions that restrict access to certain credits by entities from foreign adversary nations.
The energy title of the House draft would rescind over $3 billion in unobligated funds from IRA programs under the Department of Energy’s (DOE) State-Based Energy Efficiency Grants and other DOE offices. But it includes several provisions intended to accelerate the permitting process for energy infrastructure projects in the U.S., including a provision to fast-track permitting for certain fossil fuel and pipeline project applicants for a fee equivalent to the lesser of 1 percent of the expected cost of the applicable construction or $10 million. And it includes a provision to fast track the export of natural gas from the U.S. to non-free trade agreement (FTA) countries or to import natural gas from a non-FTA country for a $1 million application fee.
Another provision in the natural resources title of the bill would attempt to streamline federal permitting for U.S. infrastructure projects, including energy projects. That language would allow entities seeking National Environmental Policy Act (NEPA) review to pay for the cost of the required environmental impact statement (EIS) or environmental assessment (EA) plus an additional 25 percent for a guaranteed completion of the review process within six months (for an EA) or a year (for an EIS). The EIS or EA would not be subject to judicial review under NEPA.
The House will amend the draft, including provisions relating to IRA tax credits, before voting on it. And the Senate almost certainly will make additional changes when the bill goes to that chamber for consideration. Barnes and Thornburg’s Government Relations team can provide regular legislative updates to help guide impacted clients’ business planning and assist with strategic engagement in the legislative process.
Inflation Reduction Act Energy Tax Credits and Changes Incorporated in the House Draft Bill
Among other things, the IRA extended and modified certain previously existing energy tax credits, created new green energy tax credits and incentives, and established funding programs designed to increase the production of clean energy, electric vehicles (EVs), clean buildings, and clean manufacturing.
The House draft bill would change the following green energy tax incentives (for details on the listed tax credits, please see the attached document):
Previously Owned Clean Vehicle Credit (IRC sec. 25E)
House Proposed Change: Repeals the credit for vehicles acquired after December 31, 2025.
Clean Vehicle Tax Credit(IRC sec. 30D)
House Proposed Change: Repeals the credit for vehicles placed in service after December 31, 2025, but preserves it through 2026 for manufacturers that have sold 200,000 or fewer covered vehicles from 2010 through 2025.
Commercial Clean Vehicles Tax Credit (IRC sec. 45W)
House Proposed Change: Repeals the credit for vehicles acquired after December 31, 2025. An exception is provided for vehicles placed in service before 2033 if they are acquired pursuant to a written, binding contract entered into beforeMay 12, 2025.
Alternative Fuel Vehicle Refueling Property Credit (IRC sec. 30C)
House Proposed Change: Repeals the credit for property placed in service after December 31, 2025.
Energy Efficient Home Improvement Credit(IRC sec. 25C)
House Proposed Change: Repeals the credit for property placed in service after December 31, 2025.
Residential Clean Energy Credit (IRC sec. 25D)
House Proposed Change: Repeals the credit for property placed in service after December 31, 2025.
New Energy Efficient Home Credit (IRC sec. 45L)
House Proposed Change: Repeals the credit for any qualified home acquired after December 31, 2025. An exception is provided for homes that have commenced construction before May 12, 2025, provided that they are acquired before the end of 2026.
Clean Electricity Production Credit (IRC sec. 45Y) and Clean Electricity Investment Credit (48E)
House Proposed Change: Accelerates the phase-out so that the credits are reduced by 20 percent for facilities placed in service in 2029, by 40 percent for facilities placed in service in 2030, and by 60 percent for facilities placed in service in 2031. The credits zero-out in 2032. Repeals transferability of the credits for facilities and energy storage technology that begins construction two years after the date of enactment. Restricts access to the credits for certain foreign entities, certain facilities that receive material assistance from a prohibited foreign entity, and taxpayers that make applicable payments to certain foreign entities.
Clean Fuel Production Credit (IRC sec. 45Z)
House Proposed Change: Repeals transferability of the credit for fuel produced after December 31, 2027. Restricts access to the credit for certain foreign entities.
Credit for Carbon Oxide Sequestration (IRC sec. 45Q)
House Proposed Change: Repeals transferability for carbon capture equipment that begins construction two years after the date of enactment. Restricts access to the credit for certain foreign entities.
Zero-Emission Nuclear Power Production Credit(IRC sec. 45U)
House Proposed Change: Accelerates the phase-out on the same schedule that is proposed for the Clean Electricity Production and Investment credits. Repeals transferability of the credit for fuel produced after 2027. Restricts access to the credit for certain foreign entities.
Clean Hydrogen Production Credit (IRC sec. 45V)
House Proposed Change: Repeals the credit for facilities that begin construction after 2025.
Advanced Manufacturing Production Credit(IRC sec. 45X)
House Proposed Change: Terminates the credit for wind energy components sold after 2027. Terminates the credit for all other components after 2031. Repeals transferability of the credit for components sold after 2027. Restricts access to the credit for certain foreign entities, taxpayers that make applicable payments to certain foreign entities, and taxpayers that produce components with material assistance from or subject to a licensing agreement with certain foreign entities.
Investment Credit for Certain Energy Property (IRC sec. 48)
House Proposed Change: Accelerates the phase-out on the same schedule that is proposed for the Clean Electricity Production and Investment credits. Restricts access to the credit for certain foreign entities.
President Trump Issues Sweeping Executive Orders Targeting Nuclear Regulation
The Trump administration has identified growth in the nuclear energy industry as a critical component of the President’s campaign to establish American energy dominance and meet the rapidly increasing need for power. The consistent backing of the White House, coupled with record-breaking investment in nuclear technology from the private sector, has vaulted enthusiasm for nuclear power in recent months. In response to calls for reform, President Trump recently issued four executive orders (EO) designed to bolster domestic nuclear energy development and supply chains and accelerate regulatory timelines for nuclear technology licensing.
Nuclear Energy Overview
Over the last 50 years, growth in US nuclear energy generation has been stagnant and slow. From 1954 to 1978, 133 nuclear reactors were authorized to operate at 81 facilities across the country. Since 2012, over a dozen reactors have been closed. Yet, efforts are now underway to restart some of these reactors. Plus, the Nuclear Regulatory Commission (NRC) has approved three new reactor designs, two of which have been advanced reactors using new technologies. Two nuclear reactors have also recently been constructed and placed into commercial operation, suggesting the long-awaited nuclear comeback may be at hand.
In recent years, support for nuclear energy has gained newfound momentum in the federal government and from private investment. Congressional efforts, including legislation like the Nuclear Energy Innovation and Modernization Act (NEIMA), the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act, and the Inflation Reduction Act (IRA), have sought to energize nuclear development through regulatory reform, support for advanced reactor technologies, and federal tax incentives. These nuclear bills passed Congress with overwhelmingly bipartisan support and strong support from the nuclear industry.
Until the election of President Trump, nuclear advocates in Washington, D.C., had largely organized support for commercial nuclear around the unique benefits of providing clean baseload power and carbon-free energy. Now, support for nuclear is increasingly being reframed around the Trump administration’s commitment to establishing American energy dominance and capturing the promise of commercial nuclear technological innovation. In addition, the onset of artificial intelligence (AI) technology and the enormous projected power demands required to operate data centers and quantum computing capacity across the country have made nuclear energy a critical component of US energy planning. The Trump administration has identified winning the global race for AI capabilities as perhaps the most important national security concern, and competition in AI will require an unprecedented expansion of energy generation. After a decade of flat energy consumption rates, demand for power is expected to skyrocket in the coming years, up 25% by 2030 and 78% by 2050.1
Executive Order Summaries
The President’s nuclear EOs are focused on transforming the government’s role in how nuclear power plants are regulated, permitted, financed, and built—all with an eye towards rapidly and dramatically reversing the trends of minimal nuclear growth—and even some plant shutdown—to an explosion of new production, new reactors, license extensions, and uprates of existing facilities. To that end, the orders promise to ”facilitate the expansion of American nuclear energy capacity from approximately 100 GW in 2024 to 400 GW by 2050.” This target would require a four-fold increase in nuclear capacity in the next 25 years and would reverse a four-decade trend of minimal nuclear capacity growth.2
The EOs focus on several challenges, including time- and cost-prohibitive licensing and permitting, insufficient federal financing support and nuclear fuel supply, nuclear waste management, and domestic nuclear workforce issues. They also address government utilization of nuclear power on military and federal installations. The EOs address both the projected role of nuclear technology in US energy generation as well as US nuclear arsenal capabilities.
Reinvigorating the Nuclear Industrial Base
The “Reinvigorating the Nuclear Industrial Base“ EO states that US nuclear capacity has declined compared to the rest of the world and targets key areas of the nuclear industry to “jumpstart,” including fuel availability and production, secure supply chains, licensing efficiency, and workforce support.
Strengthening the Domestic Nuclear Fuel Cycle
Directs the Secretary of Energy to prepare and submit within 240 days a report that audits previous nuclear procedures with respect to spent fuel and provides recommendations for transport, disposal, and reprocessing of spent nuclear fuel.
Directs the Secretary to develop a plan within 120 days to expand the domestic uranium conversion capacity and enrichment capabilities sufficient to meet projected civilian and defense reactor needs and to halt the surplus plutonium “dilute and dispose” program and establish a program to dispose of surplus plutonium by processing and making it available for industrial use.
Directs the Secretary within 90 days to update the Department of Energy’s (DOE) excess uranium management policy to modernize the US nuclear weapons stockpile.
Directs the Secretary within 30 days to seek voluntary agreements with domestic nuclear energy companies.
Funding for Restart, Completion, Uprate, or Construction of Nuclear Power
The Secretary, through the DOE Loan Programs Office, shall prioritize funding for activities that support nuclear energy.
The Secretary shall also coordinate with the Secretary of Defense to assess the feasibility of restarting or repurposing closed nuclear power plants for military microgrid support.
Expanding the Nuclear Energy Workforce
Directs the Secretary of Labor and the Secretary of Education within 120 days to seek to increase participation in nuclear energy-related apprenticeships and career and technical education programs and consider these areas as primary areas for investment when distributing educational grants.
Reforming Nuclear Reactor Testing at the Department of Energy
The “Reforming Nuclear Reactor Testing at the Department of Energy“ EO directs DOE to utilize existing national laboratories to test advanced reactor technology, concluding that the testing of advanced reactors over which DOE has “sufficient control” are for research purposes and thus fall within DOE’s research and development jurisdiction.
Reform National Laboratory Process for Reactor Testing
Directs the Secretary of Energy to establish procedures that significantly expedite review, approval, and deployment of advanced reactors to enable operational test reactors within two years after a completed application.
Nuclear Reactor Pilot Program
Directs the Secretary of Energy to create a pilot program to construct and operate at least three advanced reactors outside the National Labs, but under DOE contract. The goal is to achieve criticality for these advanced reactors by 4 July 2026.
Streamlined Environmental Review
Directs the Secretary of Energy in conjunction with the Council on Environmental Quality Chair to reform DOE’s National Environmental Policy Act (NEPA) regulations and use all available authority to expedite environmental reviews for advanced reactor applications.
Such measures shall include identifying DOE functions not subject to NEPA requirements and creating categorical exclusions for reactors, when appropriate.
The EO does not address NRC NEPA-related regulatory reform.
Ordering the Reform of the Nuclear Regulatory Commission
The “Ordering the Reform of the Nuclear Regulatory Commission“ EO responds to criticism that NRC has received from the public, nuclear developers, and Congress for long licensing timelines and expensive, seemingly inefficient reviews. The EO specifically calls for facilitating increased development of Gen III and Gen IV reactors, small modular reactors (SMR), and microreactors, and sets an energy capacity target for nuclear generation of 400 GW by 2050, an ambitious four-fold increase.
The EO seeks to address identified obstacles to the development of commercial nuclear power at NRC in three ways:
Reform NRC’s Culture
Directs NRC to implement the 2024 ADVANCE Act objective to promote nuclear power by reforming NRC’s culture and realigning its organization and personnel to achieve expeditious review of license applications.
Reform NRC’s Structure
Directs NRC, in coordination with the assigned Department of Government Efficiency (DOGE) Team, to reorganize NRC’s organizational structure to promote “expeditious processing of license applications and the adoption of innovative technology.” This reorganization shall include reductions in force, including a reduction of personnel at the Advisory Committee on Reactor Safeguards (ACRS) to the minimum level required by statute, but includes a provision that permits increases in personnel and size for functions related to new reactor licensing.
Modernize NRC Regulation
Directs NRC, in conjunction with DOGE and the Office of Management and Budget, to review all regulations and guidance documents within nine months and, within 18 months, issue final rules and guidance that comprehensively revise them to balance safety concerns with the benefits of nuclear energy to the economy and national security. The revisions will establish fixed deadlines for licensing, including an 18-month deadline for construction and operation of new reactors and a 12-month deadline for continued operation of existing reactors. These deadlines are to be enforced by a fixed cap on NRC recovery fees.
Directs NRC to adopt “science-based radiation limits.” This includes reconsidering the linear no-threshold model for radiation exposure and the “as low as reasonably achievable” standard.
Directs NRC to coordinate with DOGE, Department of Defense (DOD), DOE, Environmental Protection Agency, and others to develop and adopt “appropriate” radiation standards.
Directs NRC to establish expedited licensing pathways for reactor designs that have been safety tested by DOD or DOE.
Directs NRC to establish a process for licensing large numbers of microreactors and modular reactors, including the use of standardized applications.
Directs NRC to revise and reconsider current NRC policies and regulations pertaining to changes to reactor design, reactor oversight, license terms, reactor license renewal, and the public hearing process.
Deploying Advanced Reactor Technologies for National Security
The “Deploying Advanced Reactor Technologies for National Security“ EO identifies advanced nuclear reactor technology as critical infrastructure to US national security. Specifically, the EO states that advanced reactors offer a high-density power source for military installations and National Laboratories that cannot be “disrupted by external threats or grid failures.”
Deployment of Advanced Reactor Technology on Military Installations
Directs the Secretary of the Army to establish a program to build a nuclear reactor at a domestic military base and commence operation by 30 September 2028.
Seeks recommendations for legislative proposals or regulatory actions necessary to accomplish this goal within 240 days of the EO.
Deployment of Advanced Reactor Technology at DOE Facilities
Directs the Secretary of Energy to designate AI data centers operated on or in coordination with DOE facilities as critical defense facilities and further identify the electrical infrastructure—including nuclear infrastructure—necessary to power those defense facilities as critical electric infrastructure.
The Secretary shall designate at least one DOE AI data center for the use and deployment of advanced reactor technology within 90 days of the EO.
The Secretary shall utilize all available legal authorities to approve the construction and operation of privately funded advanced reactors to power AI infrastructure on DOE owned or controlled sites.
Nuclear Fuel Availability
Requires the Secretary of Energy to identify all uranium and plutonium in DOE inventories that can be processed into fuel for reactors and release at least 20 metric tons of high assay low-enriched uranium (HALEU) in an available fuel bank for approved private sector projects. The Secretary is directed to retain stockpiles necessary to support tritium production, naval propulsion, and nuclear weapons.
Directs the Secretaries of Defense and Energy to develop privately funded nuclear fuel recycling, reprocessing, and fabrication facilities on controlled sites.
Nuclear Exports
Directs the Secretary of State to actively pursue at least 20 new Agreements for Peaceful Cooperation under Sec. 123 of the Atomic Energy Act to enable the US nuclear industry to access new markets.
Directs all relevant agencies to expeditiously review and facilitate authorization to export nuclear technology to facilitate US technological leadership.
Directs the development of a strategy to leverage the International Development Finance Corporation and the Export-Import Bank to provide financial support for US nuclear energy technology.
Looking Ahead: Impacts of Changes in Nuclear Policy
The EOs represent a significant shift from decades of federal positioning towards nuclear energy and the development of nuclear technology. Notably, President Trump appears to be addressing the perceived obstacles to nuclear expansion by creating new opportunities for DOE and DOD to take the lead on developing and demonstrating SMRs and other advanced nuclear reactors within their operations and under their jurisdiction, elevating the role of those agencies and perhaps diminishing the role of NRC with regard to a new reactor’s testing, planning, and maybe even its licensing and regulation. The EOs prioritize the development and deployment of public “test” and “government service” nuclear reactors under the authority of DOE and DOD rather than strictly commercial or private sector reactors under the authority of NRC. For example, the EOs require NRC to conduct a “wholesale revision” of its rules and guidance, including establishing “an expedited pathway to approve reactor designs that the DOD or the DOE have tested and that have demonstrated the ability to function safely,” and NRC’s review of such designs “shall focus solely on risks that may arise from new applications permitted by NRC licensure, rather than revisiting risks that have already been addressed in the DOE or DOD processes.”3
An effort to streamline and standardize aspects of new reactor licensing is a challenge based on the breadth of technologies involved. There is such a diversity of proposed new designs in the SMR and microreactor category that the NRC may struggle to meet this directive, at least with respect to certain types of reactors and with anticipated reductions in workforce.
The EOs’ effort to address the issue of spent fuel is laudable; however, the political implications of executing on such a plan have proved extremely difficult with no real progress on storage and disposal solutions having been made since the suspension of the Yucca Mountain project.
As NRC, DOE, DOD, and the nuclear energy industry respond to the EOs, several questions and developments will be critical to continue monitoring:
Are DOE and DOD now the lead agencies for reactor technology demonstration?
What does the future of the NRC look like, and how will these orders affect NRC leadership, organizational structure, responsibilities, and funding?
How will the wholesale review of NRC regulations impact permitting, environmental review, application costs and timelines, and nuclear safety?
Can NRC meet the aggressive deadlines set in the EOs, especially given the anticipated workforce needs?
What will the regulatory and legislative responses to these orders be—and how will NRC and others meet their new requirements?
Can DOE meet the aggressive deadlines for strengthening the domestic nuclear fuel and related nuclear infrastructure needs?
How much capital support and investment will the financing opportunities included in the EOs provide?
How will the EOs affect the nuclear power industry, such as interaction between established nuclear companies, start-ups with new technologies, utilities, and large consumers (such as hyperscalers)?
How will the EOs affect nuclear development overseas and nuclear exports?
As these EOs are implemented and the nuclear industry reacts, the firm will continue to actively monitor these developments. Our legal, regulatory, and policy professionals have considerable experience across the spectrum of nuclear issues and are eager to help you navigate these evolving and fast-paced changes.
1 Lalit Batra, Deb Harris, George Katsigiannakis, Justin Mackovyak, Himali Parmar & Maria Scheller, Rising current: America’s growing electricity demand, ICF International, Inc. (Apr. 2025),
2 US Energy Information Administration, https://www.eia.gov/energyexplained/nuclear/us-nuclear-industry.php (last visited Jun. 4, 2024).
3 “Ordering the Reform of the Nuclear Regulatory Commission,” Executive Order Issued by President Donald J. Trump, May 23, 2025.
Katie E. Spring contributed to this article
Competition and Consumer Law Round-Up June 2025
What’s Inside This Issue?
This edition of the K&L Gates Competition & Consumer Law Round-Up provides a summary of recent and significant updates from the Australian Competition and Consumer Commission (ACCC), as well as other noteworthy developments in the competition and consumer law space.
Key Developments in Environmental / Greenwashing Guidance and Enforcement
EnergyAustralia Settles Greenwashing Action Brought by Advocacy Group
AU$8.25 Million Penalty Ordered Against Clorox for Misleading Greenwashing Claims
Enforcement
Oil and Gas Company Qteq Found to Have Engaged in Cartel Conduct
Federal Court Orders Captain Cook Vocational College to Pay AU$30.4 Million in Penalties for Unconscionable Conduct and Misleading Representations
ACCC Commences Proceedings Against Retailer City Beach for Noncompliant Button Battery Products
Mergers and Acquisitions
ACCC Raises Concerns With Rural Merchandiser Elders’ Proposed Acquisition of Delta
Qube’s Acquisition of MIRRAT Not Opposed by ACCC
Notifications and Authorisations
ACCC Proposes to Grant Authorisation to Australian Payment Network to Facilitate Wind Down of Cheque Industry
Noteworthy Developments
Mandatory Information Standard for Toppling Furniture Brought into Effect
Click here to view the Round-Up.
Climate Lawsuit Against German Energy Company Dismissed by Court
Last week, a long-running lawsuit brought against a major German energy company by a Peruvian farmer for alleged damages stemming from climate change was dismissed by an appellate court in Germany. The court’s reasoning focused on the inability of the plaintiff to prove damages, highlighting the difficulty of this aspect of the various climate tort litigations for plaintiffs–and, indeed, this legal point has featured prominently in a number of defenses to these lawsuits (especially in the United States).
Nonetheless, the environmental groups backing the lawsuit claimed victory–at least to a degree–as the case could be interpreted as establishing the principle that emitters of greenhouse gases could ultimately be held liable for damages attributable to climate change, even if this particular action failed to satisfy the applicable legal standard. While it is true that this general legal principle could be invoked in other litigation in the future, environmental lawsuits will still need to be able to prove specific damages that were caused by climate change, which–as this case demonstrates–is a stringent standard to satisfy. Any future plaintiff would have to be selected delicately and deliberately, with this standard in mind–and it is not at all clear that such a suitable candidate for a legal action would be found. Simply stated, the fact that the court found that the plaintiff in this action–a homeowner whose building could be washed away if a dam formed by a glacier collapses due to warming temperatures–had insufficient proof to prosecute this claim will likely discourage (to some degree) similar lawsuits in the future.
RWE AG, one of Europe’s top carbon polluters, won dismissal of a case brought by a Peruvian farmer who tried to hold the German energy giant liable for its impact on climate change. An appeals court in Hamm on Wednesday said that while national law allows a single company to be targeted for its share of climate-related damage, not all the necessary requirements were met in this suit against RWE.
www.bloomberglaw.com/…