By Kennedy Maize
A Britishism – “gobsmacked” – characterizes much of the reaction to President Trump’s April 9 executive order that attempts to impose supermarket pull-dates on energy regulations. It is titled the “Zero-Based Regulatory Budgeting to Unleash American Energy” order.
“Unlawful and destructive,” says Clint Vince, the esteemed head of the energy practice at the D.C. law firm Dentons.
“Impossible to implement, blatantly illegal, creates massive amounts of unnecessary work, and just makes no sense,” says Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative.
“I do not think this even comes close to passing the test for legality,” says Andres Restrepo, a senior attorney in the Sierra Club’s Environmental Law Program.
“See you in court,” says liberal watchdog group Public Citizen.
The executive order covers 10 federal agencies and subagencies that issue energy regulations, concentrated in the energy and interior departments, also touching the Agriculture Department’s U.S. Forest Service and the Army Corps of Engineers’ hydro electric program. It targets rules that impact “energy production,” without defining the term. The bullseye includes two independent agencies legally divorced from the White House, the Federal Energy Regulatory Commission and the U.S. Nuclear Regulatory Commission.
Without getting too deep into the administrative and legal weeds, and based on a White House fact sheet, the covered institutions must “insert a one-year expiration date into existing energy regulations.” If they fail to accomplish this, “these energy regulations will expire no later than September 30, 2026.” If they pass muster, they can live on for another five years until facing another potential execution.
Connecting the “zero-based regulatory budgeting” EO to another April 9 Trump executive order, “Directing the Repeal of Unlawful Regulations,” the agencies should extend existing regulations only for those “that affirmatively serve American interests. The rest will expire, resetting the regulatory landscape.”
New regulatory proposals must “include a five-year expiration date in future energy regulations, unless those new regulations are themselves deregulatory.” The new regs must be reaffirmed when they expire or will automatically die at the end of the five-year shelf life.
If the agency decides the rule is still virile after five years, it can be renewed for another five years, and so on until it dies of old age and irrelevance. The order “exempts permitting regimes, to ensure certainty for long-term development projects.”
The order has the legal practitioners who focus on FERC and the NRC pondering and puzzling over how these broad deregulatory strokes will work in practice. This does require a bit of administrative weed-whacking. It involves parsing some of the words in the order, spelunking possible loopholes, pondering how the order comports with the Administrative Procedures Act, and game planning how the agencies may tiptoe around the rules.
An analysis by McCarter & English suggests – and it may be wishful thinking – that the “effect of this order on FERC may be on the margins. FERC has issued many regulations pursuant to the Federal Power Act and Natural Gas Act. These include detailed regulations governing utility accounting, utility rates, and open-access, non-discriminatory electric transmission and gas transportation services. Despite a requirement for periodic review, these foundational agency regulations are unlikely to be repealed.”
This review also observes that the order doesn’t touch the Public Utility Regulatory Policies Act (PURPA) which provide for FERC’s “review of proposals to build new natural gas pipelines, natural gas and storage facilities, and liquefied natural gas terminals, or its licensing of non-federal hydropower projects.”
A review by the Akin law firm focuses on the EO’s exemption for rules that have “a net deregulatory effect.” What does that mean? “While it is not clear what would constitute a net deregulatory effect, given that many of FERC’s regulations issued under the [Natural Gas Act and Federal Power Act] over the past two and a half decades were aimed at establishing a more competitive, deregulated framework for the natural gas, electric power and transmission industry, it is possible that regulations in furtherance of this framework could qualify for this exemption.”
A discussion by Holland&Knight noted that the Edison Electric Institute recently held a seminar featuring former FERC General Counsel Matthew Christiansen that “focused on the conundrum of achieving compliance with the EO in a manner consistent with the Administrative Procedure Act (APA). Christiansen noted that the EO does not elaborate on how its projected implementation would adhere to the APA, even though such adherence would be crucial for FERC to reach legal durable outcomes.”
The 1946 APA is the bedrock of how courts judge actions by federal regulatory agencies. That has become more solid since the U.S. Supreme Court last summer in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), tossed out the 40-year-old Chevron doctrine. The court said the APA should guide its decisions in judging agency actions, not rely on the expertise of the executive branch agencies.
Following FERC’s April meeting (Apr. 17), Chairman Mark Christie endorsed the idea of cleaning out regulatory thickets. “I think doing what I call a regulatory housecleaning is a good idea,” he said, including regulations that were adopted 20 or 30 years ago and no longer make sense. He cited Order 679, adopted in 2006, which created financial incentives for electric utilities to join regional transmission organizations. He has long criticized the rule, which he refers to as “FERC candy.” He also mentioned “regulatory zombies,” proposed rules that never got a final vote but have been wandering around in the dust and darkness of the agency’s archives.
“But everything we do has to be done according to law,” Christie added. “Otherwise we are just spinning our wheels.” If the commission doesn’t take legal care with its reviews, the interest groups on the various sides of an issue will take the commission to court and win. The APA, he said, “has a lot of nooks and crannies,” but the commission must follow it. “Losing in court is not something I like to do. I want to win in court.”
Trump named Republican Christie, 71, a long-time Virginia utility regulator, to FERC in 2020 and he took office in January 2021 for a term ending this June 30. Trump named him chairman on January 20.
The two April 9 EOs possess the political fingerprints of Office of Management and Budget Director Russell Vought (who was in charge of the Heritage Foundation’s notorious Project 2025) and dodgy DOGE major domo and multi-billionaire Elon Musk.
The zero-based rule implies that the president has the power to create new executive branch agencies without any assistance from Congress. The EO says, “Agency heads shall coordinate with their DOGE Team Leads and the Office of Management and Budget to implement this order.” That suggests that the so-called, Trump invented, “Department of Government Efficiency” will be around for the immediate and subsequent zero-based exercises. It was initially billed as temporary. The White House has already asserted that it can dismantle government agencies Congress has created without consulting the legislative branch.
Trump loves issuing executive orders, having signed 104 by March 25, ahead of the previous first 100-day record of 99 held by Franklin Delano Roosevelt in 1933. Since then, Trump has signed 46 more. He’s far ahead of his first term record of 220 over four years.
His 2025 EOs range from the major, such as the zero-based regulation order, to the mundane, such as his April 15 “Federal Office Space Management” order, to the fatuous and funny, such as his April 9 order “Maintaining Acceptable Water Pressure in Showerheads.” In that order, the New York Times noted, Trump was dismissive of the APA. The Times wrote that the order “directed a rollback of federal rules that limit the water flow in shower heads with a highly unusual legal justification: Because I say so.”
The order states, “Notice and comment is unnecessary because I am ordering the repeal,”
Donald, King of Hearts, gazed upon the kingdom’s showers and proclaimed, “Off with their heads.”
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