Congress Eliminates Corporate Average Fuel Economy (CAFE) Penalties for Passenger Cars and Light Trucks
In one of its many changes, the One Big Beautiful Bill Act, enacted on July 4, 2025, eliminated civil penalties for noncompliance with federal fuel economy standards. Specifically, Section 40006 of the Act amends the language of the Corporate Average Fuel Economy (CAFE) statute to reset the maximum civil penalty to $0.00. Although the statute and its implementing regulations otherwise remain in place, this amendment removes any civil penalties for producing passenger cars and light trucks that do not meet fuel economy requirements.
Agencies Collectively Move to Overhaul Environmental Review Regulations
On July 3, 2025, numerous federal agencies initiated an effort to revise the manner in which they comply with the National Environmental Policy Act (NEPA). NEPA, a cornerstone of environmental governance and project development in the U.S., has historically been implemented through regulations from the Council on Environmental Quality (CEQ). The DC Circuit questioned the legality of those regulations, as well as CEQ’s authority to implement them. And at the direction of President Trump’s February 25, 2025 Executive Order 14154 — “Unleashing American Energy” — CEQ rescinded its NEPA implementing regulations. In place, CEQ provided guidance for agencies that instructed them to update their NEPA procedures by February 2026 in a manner consistent with recent statutory amendments that prioritizes “efficiency and certainty over any other policy objectives.” Today, we are getting our first glimpse into what that process will look like.
FERC Accelerates Natural Gas Infrastructure Expansion Through Key Waivers and Rulemaking
On January 20, 2025, President Donald J. Trump issued Executive Order No. 14156, Declaring a National Energy Emergency, which directed federal agencies to “identify and use all relevant lawful emergency and other authorities available to them to expedite the completion of all authorized and appropriated infrastructure [and] energy . . . projects.” On June 18, 2025, in alignment with this Executive Order and in response to two petitions filed by the Interstate Natural Gas Association of America (“INGAA”), the U.S. Federal Energy Regulatory Commission (“FERC”) advanced a package of regulatory actions aimed at accelerating the development of natural gas infrastructure.
Department of Energy Blocks Shutdown of Coal-Fired Power Plant and Oil- and Gas-Fired Generator Units With Federal Emergency Orders
On May 23, 2025 and May 30, 2025, the Department of Energy (DOE) issued two emergency orders under its Federal Power Act (FPA) Section 202(c) authority effectively delaying the closure of two power plants. DOE Order No. 202-25-3 (hereinafter, the Campbell Order) requires the Midcontinent Independent System Operator (MISO) and Consumers Energy to “take all measures necessary” to ensure that the 1,560 MW coal-fired J.H. Campbell Power Plant (Campbell Plant) in West Olive, Michigan — originally slated for retirement on May 31, 2025 — is “available to operate” until the expiration of the order on August 21, 2025. DOE Order No. 202-25-4 (hereinafter, the Eddystone Order) similarly requires PJM Interconnection (PJM) and Constellation Energy to keep 760 MW of oil- and gas-fired peaking capacity — also set to retire on May 31, 2025 — at the Eddystone Generation Station (Eddystone Station) in Pennsylvania available until August 28, 2025. There is also the potential of extensions of these expiration dates.
Supreme Court Makes Major Course Correction, Limiting Scope of NEPA Reviews and Demanding Judicial Deference to Agency in Uinta Basin Rail Case
In Seven County Infrastructure Coalition v. Eagle County, Colorado, the Supreme Court held that under the National Environmental Policy Act (NEPA), an agency evaluating a particular project is not required to consider the effects of other future or geographically separate projects that may be built or expanded if the proposed project were approved, thus closing the door to the expansive NEPA analyses demanded by project opponents in many cases. The Court also separately stressed that the “central principle of judicial review in NEPA cases is deference,” underscoring that NEPA grants agencies discretion to determine the scope of the review and that their discretionary decisions should not be extensively second-guessed by a court. The cumulative impact of these holdings are much more than a minor course correction and should both significantly limit the scope of future NEPA analyzes and strengthen the defensibility of such analyzes in court.
Department of the Interior Accelerates Permitting for Oil and Gas, Adopts 28-Day Mandate
In response to the Trump administration’s push to increase U.S. energy output by declaring a national energy emergency, the Department of the Interior (the Interior) has released plans to aid the administration’s goals. These include the Interior’s Emergency Permitting Procedures intended to accelerate and streamline review and approval of certain energy projects, primarily oil and gas. Bypassing formal rulemaking, the Interior cites its authority during emergencies to implement “alternative processes” to comply with the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), and the Endangered Species Act (ESA). The alternative processes are available to current and future applicants so long as they affirm in writing to the Interior that they qualify for and want to avail themselves of the expedited processes.
Fish and Wildlife Revives Incidental Take Saga Under the Migratory Bird Treaty Act
In latest saga surrounding the formidable Migratory Bird Treaty Act (MBTA or Act), the U.S. Fish and Wildlife Service on April 21, 2025, withdrew its 2021 advance notice of proposed rulemaking to potentially authorize the incidental taking or killing of migratory birds, consistent with its interpretation of the Act. The 2021 advance notice promised a new regulatory scheme possibly authorizing the incidental take of migratory birds — a practice that would have broken with pre-2017 MBTA interpretation but more practically implement the Act in response to various needs, such as infrastructure permitting and development.
The Future of Environmental Review of Federal Permitting Remains Unsteady as White House Seeks to Rescind NEPA Regulations
On February 19, 2025, the Council on Environmental Quality (CEQ) submitted a proposed Interim Final Rule rescinding its regulations implementing the National Environmental Policy Act (NEPA). The Rule will become effective 45 days after its publication in the Federal Register, marking the end of nearly 50 years of CEQ regulations serving as the foundation for federal environmental reviews. This Interim Rule comes right at the deadline set by President Trump’s Executive Order (EO) 14154—Unleashing American Energy—which rescinded CEQ’s authority to issue NEPA regulations and revoked President Carter’s EO 11991, which had originally directed CEQ to promulgate implementing regulations.
FERC Orders Action on Co-Location Issues Related to Data Centers Running AI
Earlier today, at the February 20, 2025 Federal Energy Regulatory Commission (FERC) Open Meeting, FERC Commissioners voted unanimously to launch a review of issues associated with the co-location of large loads at generating facilities at PJM Interconnection, L.L.C. (PJM). The review will look at whether the PJM tariff needs to establish rules to provide clarity on co-location while ensuring grid reliability and fair costs to consumers.
States, Advanced Reactor Developer Challenge NRC’s Authority to License Advanced Reactors
The outcome of a lawsuit filed at the end of 2024 challenging the U.S. Nuclear Regulatory Commission’s (“NRC’s or the Agency’s”) authority under a 1956 rule to license certain nuclear facilities could have important implications for advanced reactor licensing processes and the supply of electricity in the U.S. in the years ahead.