Article
The Trump Administration's First 100 Days—Adapting to Energy Policy Shifts
Energy policy shifts are reshaping the industry—here’s how utilities can stay ahead
March 14, 2025
Article
Energy policy shifts are reshaping the industry—here’s how utilities can stay ahead
March 14, 2025
The first 100 days of the Trump Administration have already brought major energy policy shifts. Executive orders and agency deregulation are reshaping funding priorities, regulatory oversight, and energy strategy—causing utilities to rethink their plans. While Congress and the courts may influence how these changes unfold, one thing is clear: The energy industry should adapt now to stay resilient and competitive.
Here’s where utilities should focus:
Funding Disruptions: Federal aid and tax credits, particularly for renewable energy projects, face potential reductions. Utilities should evaluate alternative funding sources to keep projects moving.
AI & Cybersecurity Risks: As AI becomes a national priority, it brings both innovation and security risks. Utilities need to embed cybersecurity into AI strategy from the start.
Energy Mix Strategy: With policy shifts favoring nuclear and fossil fuel over renewables, utilities should reassess their energy mix and adapt infrastructure investments accordingly.
Regulatory Fast-Tracking: With changes to NEPA on the horizon, utilities should expect streamlined approval processes while preparing for potential legal and regulatory shifts.
Let’s dive deeper into the changes.
The federal funding landscape for energy and utilities is shifting, creating uncertainty for grants, loans, and tax incentives. Utilities need to understand what’s changing and how to respond.
Recent shifts in federal policy are affecting funding for energy and utilities.
While Congress ultimately controls federal spending, the Trump Administration has the authority to review and potentially redirect funds that have not yet been formally awarded. This creates uncertainty for grants, loans, and tax incentives tied to modernization and upgrades to critical infrastructure.
Utilities that rely on federal funding need to reassess their plans as policy shifts create new uncertainties.
The Impoundment Control Act (ICA) of 1974 disallows a President from unilaterally refusing to spend money appropriated by Congress. If a President wants to delay or cancel spending, they must formally request approval from Congress. The funds that have been appropriated but not yet obligated (meaning funds that haven’t been contractually/legally committed, such as through a grant award contract) are at risk of being withdrawn. There are several means by which funds might be rescinded:
Obligated Federal Aid: Appropriated and obligated federal aid can be scrutinized on a program specific basis depending on the specific terms and conditions set forth in the federal aid agreements. Specifically, per 2 C.F.R. § 200.340, should an agency determine that “an award no longer effectuates the program goals or agency priorities,” it can terminate the agreement. Additionally, loans issued through the Loan Programs Office (LPO) that are under conditional commitment can be clawed back.
Unobligated Federal Aid and Future Funding Rounds: Unobligated funds are most at risk. Grant programs like the U.S. Department of Energy (DOE) Grid Resilience and Innovation Partnership (GRIP), was slated for a final funding round to be issued in Spring 2025. However, as these are unobligated funds and given the administration’s objectives to scrutinize federal aid programs, it’s possible the last and final round of GRIP awards could be cancelled or reprogrammed.
IRA tax credits remain intact for now, but the budget reconciliation process or new legislation could lead to modification or eliminations that impact long-term project economics.
The federal government is ramping up its focus on AI and cybersecurity, introducing new policies that will impact how utilities develop and secure their systems.
The Administration has introduced new executive orders that reshape AI and cybersecurity policy.
These policy changes reflect a faster push toward AI adoption—but with that comes heightened security risks.
As AI becomes more integrated into grid operations, utilities must take a proactive approach to governance to ensure both information technology (IT) and operational technology (OT) environments remain secure. The increased reliance on AI also introduces new cyber threats, including adversarial AI attacks and data manipulation risks that could disrupt critical infrastructure.
Additionally, regulatory influence over AI security is growing. Federal advisory groups like PCAST will play a key role in shaping cybersecurity standards, making it essential for utilities to stay informed on evolving guidelines and compliance requirements.
The Administration's recent executive orders are reshaping energy priorities, affecting federal support for electric vehicles, offshore wind, and renewable energy projects. It’s important to assess how these changes impact infrastructure investments and future planning.
The federal government is shifting its approach to energy investment, scaling back support for electric vehicles (EVs) and renewable energy projects.
These policy shifts signal a formal pivot toward prioritizing conventional energy sources over renewables—with direct consequences for utilities.
The halt in federal EV infrastructure funding creates uncertainty for charging network expansion, which could slow state and private sector investment. Offshore wind projects in early permitting phases may be indefinitely stalled, impacting long-term grid planning and renewable energy targets. Similarly, the freeze on renewable energy permitting introduces delays for solar and battery storage projects on federal lands, limiting deployment potential in key regions.
Recent executive orders are reshaping federal permitting and regulatory oversight, creating uncertainty for utilities as environmental reviews, project approvals, and agency independence face potential changes.
Recent executive orders are reshaping the federal permitting and regulatory landscape, with major implications for energy infrastructure projects.
These changes could fundamentally shift how utilities navigate regulation and the shift toward faster federal approvals comes with uncertainty.
NEPA revisions will likely face legal challenges from environmental groups and states that oppose reduced environmental oversight, potentially delaying new permitting guidelines. States with stricter environmental laws, such as California and New York, may introduce additional permitting requirements to offset federal deregulation, leading to inconsistencies in project approvals across different regions.
Meanwhile, greater executive control over FERC means that energy regulations could shift more dramatically with each administration. This creates long-term investment uncertainty for utilities, as regulatory priorities may fluctuate based on political agendas rather than industry-driven needs. Additionally, legal challenges could complicate how FERC operates under the new directive.
Disclaimer: This article reflects the energy and utility landscape at the time of publication.
Authors: Eric Chung, Calvin Tong, Alyssa Ramirez, Paul DeCotis, Orli Katz, and Grace Roper
• Secure existing funding—Review grant contracts and compliance requirements to ensure maximum protection as policies shift. Utilities that have an awarded contract for a grant in place today, are least likely for repeal given legal and contractual protections. Some conditions, like Community Benefits Plans, may no longer qualify for reimbursement, requiring project adjustments.
• Monitor legislative updates—Unobligated federal funds are the most at risk of being withdrawn or repurposed. Stay informed on IRA tax credit modifications and Department of Energy (DOE) funding shifts that could impact financial planning.
• Explore alternative financing—With federal funding in flux, utilities should proactively assess state-level incentives, private investment, and green bonds as potential funding sources.
• Embed AI security into governance from the start—Adopt security-by-design principles, conduct regular penetration testing, implement zero-trust architectures to protect both IT and OT environments, and establish incident response plans specifically for AI-related security incidents.
• Build AI-specific cybersecurity capabilities—Dedicated AI security teams should be trained to detect and mitigate adversarial threats before they disrupt operations. As this landscape evolves, utilities should also invest in a sustainable workforce pipeline in AI and critical infrastructure cybersecurity.
• Stay ahead of evolving compliance requirements—Federal regulations around AI and cybersecurity are shifting rapidly. Utilities should actively track new standards to ensure compliance and maintain secure operations.
• Secure alternative funding sources—With federal EV infrastructure funds on hold, utilities should explore state-level grants, private partnerships, and green financing options to sustain momentum.
• Monitor state-level responses—Some states may introduce their own incentives or continue renewable investments despite federal pullbacks.
• Engage policymakers and industry groups—Actively participate in discussions to advocate for funding continuity and ensure clean energy initiatives stay on track.
• Capitalize on permitting acceleration—With NEPA changes fast-tracking approvals, utilities should identify high-priority projects that can benefit from reduced delays.
• Stay ahead of state-level regulatory shifts—Monitor local permitting changes, as stricter state rules could complicate project timelines despite federal streamlining.
• Plan for regulatory unpredictability—With FERC’s independence potentially weakened, utilities should closely track federal decisions and prepare for policy swings tied to political shifts.