Energy Dominance Financing Interim Final Rule Issued by DOE

On Tuesday, the Department of Energy’s (DOE) Loan Programs Office (LPO) published new loan guarantee regulations via an interim rule, expanding and rebranding the LPO’s Energy Infrastructure Reinvestment Program, now referred to as the Energy Dominance Financing (EDF) Program. The amendments (90 FR 48705) align with the provisions of the One Big Beautiful Bill Act (OBBBA), which replaced the EIR (Section 1706) with the EDF and authorized up to $250 billion in loan guarantees through September 30, 2028.  The interim final rule revises definitions, broadens the criteria of eligible projects under the loan guarantee program, and removes certain restrictions and requirements. Stakeholders have the opportunity to submit public comments on the rule change until December 29, 2025.  

WHAT’S CHANGED 

• Implementation of the authority created by the OBBBA that amends section 1706 of Title 17 and introduces the “Energy Dominance Financing Program” that replaces the Energy Infrastructure Reinvestment Program. 

• Project eligibility has been expanded to include those that: “1) retool, repower, repurpose, or replace Energy Infrastructure that has ceased operations; 2) enable operating Energy Infrastructure to increase capacity or output; or 3) Support or enable the provision of known or forecastable electric supply at time intervals necessary to maintain or enhance grid reliability or other system adequacy needs.” 

• “Energy Infrastructure” has been redefined to encompass ‘‘a facility, and associated equipment, used for enabling the identification, leasing, development, production, processing, transportation, transmission, refining, and generation needed for energy and critical minerals.’’ 

• Removes references to emissions mitigation or control for project eligibility, meaning projects may now qualify for loan guarantees regardless of whether they incorporate emissions-reduction technologies. 

• Requirements to include an “Affected Community Analysis” of how the proposed project will engage with and affect associated communities have been removed. However, DOE will continue to require assurances that electric utility applicants will pass on any financial benefit from the Guarantee to the customers or associated communities served by the electric utility.  

• EDF-financed projects will be subject to the DOE’s new National Environmental Policy Act (NEPA) guidance, which went into effect June 30. Compared to the prior rules, the NEPA update focuses on removing what the Trump Administration has referred to as “permitting paralysis,” which has stalled major projects.  These updated NEPA rules draw on amendments from the Fiscal Responsibility Act of 2023, Executive Orders 14154 and 14301, the CEQ's rescission of its NEPA regulations, and the recent Supreme Court decision in Seven County Infrastructure Coalition et al. v. Eagle County, Colorado. 

CONSIDERATIONS FOR LPO APPLICANTS 

The new interim rule further emphasizes the Department of Energy’s shift away from clean energy transition towards domestic energy production. The removal of the “affected community analysis” may be welcomed by applicants who struggled to develop community benefits plans under the requirements of the previous administration. CFS expects the expanded EDF scope, combined with fluctuating federal grant programs, will increase interest in LPO-backed projects. As these programs become more competitive, prospective applicants should emphasize projects that can begin quickly, make a strong case for return on investment, and clearly demonstrate alignment with the EDF’s goals.