DOE Withdraws Direct Final Rule on Zero-Based Regulating, Will Proceed Through Standard Notice-and-Comment Rulemaking

On July 9, 2026, the Department of Energy (DOE) withdrew its direct final rule that would have implemented, starting July 13, 2026, “zero-based regulating” sunset provisions across a range of DOE regulations. DOE did so after receiving adverse comments during the public comment period on the direct final rule, as it committed to do when it issued the rule on May 29, 2026. However, DOE issued the direct final rule alongside a companion notice of proposed rulemaking (NOPR) with the same goal, meaning that the DOE may still act to sunset the relevant regulations sometime in the future.

What is Zero-Based Regulating?

DOE’s direct final rule was designed to implement Executive Order 14270, “Zero-Based Regulatory Budgeting to Unleash American Energy,” issued April 9, 2025. The executive order directed DOE, along with the Environmental Protection Agency, the Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission, to insert “sunset provisions” into regulations issued under specified energy statutes. For DOE specifically, the order applies to regulations issued under the Atomic Energy Act of 1954, the National Appliance Energy Conservation Act of 1987, the Energy Policy Act of 1992, the Energy Policy Act of 2005, and the Energy Independence and Security Act of 2007.

“Zero-based regulating” is a system where each regulation must be affirmatively justified on a recurring basis rather than assumed to continue simply because it existed in a prior period. The executive order requires covered agencies to build a “Conditional Sunset Date” into each covered regulation, defined as the date on which the regulation will cease to be effective and be removed from the Code of Federal Regulations unless the issuing agency affirmatively extends it. Before allowing a regulation to expire, the agency must offer the public an opportunity to comment on the costs and benefits of the regulation, and it may extend the sunset date only after finding that an extension is warranted. The stated goal of this framework is to compel agencies to reexamine their regulations periodically, on the theory that some regulations otherwise persist for decades without renewed scrutiny and may, over time, become unnecessary, unduly burdensome, or contrary to policy.

DOE’s direct final rule would have amended 21 parts[1] in Title 10 of the Code of Federal Regulations affecting areas as varied as greenhouse gas reporting guidelines, access to DOE computers, contractor legal management, and the domestic uranium program, adding a sunset provision stating that each identified part would automatically expire one year from the rule’s effective date unless extended, rescinded, or otherwise addressed before that date.[2] The rule also would have added a new general sunset provision, codified at 10 C.F.R. part 1061, applicable to covered regulations more broadly, providing that DOE could extend a conditional sunset date by written determination of the Secretary of Energy for periods not exceeding five years, but that amendments to an existing regulation would not themselves extend its sunset date.

Virtually Identical Sunsetting Provisions in the NOPR

DOE elected to use the direct final rule procedure because it did not anticipate significant public comment and considered the action non-controversial, with an effective date of July 13, 2026. Consistent with that procedure, DOE provided a comment period running through June 29, 2026, and stated that if it received significant adverse comments by that date, it would publish a timely withdrawal and instead address the comments through a final rule responding to the companion NOPR published the same day.

DOE did, in fact, receive adverse comments on the direct final rule. Commenters raised concerns that the sunset process bypasses meaningful public input and fails to adequately assess whether the sunsets are consistent with underlying statutory mandates or serve the public interest. For example, one commenter argued that DOE’s rule offered little analysis or explanation for why the identified regulations should sunset, and that the proposed amendments would allow the targeted rules to expire automatically even if DOE failed to provide the promised future comment periods or to announce decisions on the regulations’ fate, rendering the rule arbitrary and capricious under the Administrative Procedure Act.

As a contingency, DOE published the NOPR on the same day.[3] The proposed rule is, by DOE’s own description, substantively identical to the direct final rule: the NOPR’s summary states that it “proposes regulatory revisions identical to those set forth in a direct final rule published elsewhere in this issue of the Federal Register.” DOE’s procedural and regulatory review analyses for the NOPR likewise mirror those conducted for the direct final rule, with the NOPR expressly incorporating the direct final rule’s analysis by reference. DOE has confirmed it will respond to the timely comments on the direct final rule and the NOPR as part of any final action taken on the proposed rule.

Rulemaking Timeline and Next Steps

With the direct final rule now off the table, the proposed rule remains pending before DOE. The agency’s stated next step is to review and respond to the comments submitted by June 29, 2026, and to issue a final rule addressing those comments in connection with the proposed rulemaking. DOE has not announced a specific timeline for issuing that final rule. Given the adverse comments received, including arguments that the sunset framework lacks adequate reasoned explanation and risks automatic expiration of regulations without the promised comment opportunities, DOE’s final rule may include additional analysis of or modifications responsive to those concerns, or even an additional public notice period if significant modifications are made.

The Foley energy team will continue to track developments in this area and welcomes questions on these issues.

[1] For context, there are over 150 parts contained in Title 10. Chapter I alone has 54 active parts.

[2] See Pt 300, Voluntary Greenhouse Gas Reporting Program: General Guidelines; Pt 602, Epidemiology and Other Health Studies Financial Assistance Program; Pt 605, The Office of Science Financial Assistance Program; Pt 706, Security Policies and Practices Relating to Labor-Management Relations; Pt 708, DOE Contractor Employee Protection Program; Pt 719, Contractor Legal Management Requirements; Pt 727, Consent for Access to Information on Department of Energy Computers; Pt 733, Allegations of Research Misconduct; Pt 760, Domestic Uranium Program; Pt 766, Uranium Enrichment Decontamination and Decommissioning Fund; Procedures for Special Assessment of Domestic Utilities; Pt 782, Claims for Patent and Copyright Infringement; Pt 783, Waiver of Patent Rights; Pt 784, Patent Waiver Regulation; Pt 824, Procedural Rules for the Assessment of Civil Penalties for Classified Information Security Violations; Pt 840, Extraordinary Nuclear Occurrences; Pt 861, Control of Traffic at Nevada Test Site; Pt 950, Standby Support for Certain Nuclear Plant Delays; Pt 960, General Guidelines for the Preliminary Screening of Potential Sites for a Nuclear Waste Repository; Pt 963, Yucca Mountain Site Suitability Guidelines; Pt 1009, General Policy for Pricing and Charging for Materials and Services Sold by DOE; and Pt 1015, Collection of Claims Owed the United States. (All parts are in Title 10 of the Code of Federal Regulations.)

[3] This paired direct-final-rule-and-proposed-rule structure is consistent with the approach other agencies have taken to implement Executive Order 14270. For example, FERC used the same dual-track procedure for its own sunset rule, published October 21, 2025, which became effective on December 5, 2025, except for a single provision that FERC later rescinded after receiving an adverse comment on that provision. The Nuclear Regulatory Commission followed a similar approach for its sunset rule published in December 2025, with a portion of that rule ultimately subject to partial withdrawal after adverse comment on a specific provision.

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