The newly enacted One Big Beautiful Bill Act (OBBB) brings sweeping changes to the U.S. Department of Energy's (DOE) Loan Programs Office (LPO), overhauling its authorities and reshaping its future role in energy infrastructure financing. Most notably, the law repeals the Inflation Reduction Act's (IRA) loan authority for LPO programs and replaces the Section 1706 Energy Infrastructure Reinvestment (EIR) program with a new Energy Dominance Financing authority. Additionally, the OBBB provides $1 billion in new funding for the program, which is estimated to provide up to $200 billion in lending authority.
Repeal of IRA Loan Authority
Section 50402 of the OBBB rescinds the unobligated loan commitment authority that was originally appropriated to LPO under the IRA. This includes funding across multiple Title 17 categories – including Innovative Energy (1703), State Energy Financing Institutions (SEFIs), and the now-superseded 1706 EIR program. Though LPO retains any loan authority already committed through conditional commitments or closed deals, the repeal effectively constrains future award capacity under preexisting program categories unless reauthorized or funded through other means.
A New Section 1706: Energy Dominance Financing
Section 50403 of the OBBB reimagines the 1706 program from the ground up. Rather than focusing on emissions reductions or repurposing legacy infrastructure, the new 1706 authority prioritizes energy supply, grid reliability and critical minerals development. Officially titled "Energy Dominance Financing," the new program:
- Expands project eligibility to include:
- projects that retool, repower, repurpose or replace infrastructure that has ceased operations
- projects that increase the capacity or output of operating infrastructure
- projects that support forecastable electric supply at intervals necessary to maintain grid reliability or system adequacy
- eliminates prior emissions requirements, repealing the former mandate that fossil energy projects use technologies to avoid or reduce greenhouse gas emissions
- broadens the definition of "energy infrastructure" to include facilities and activities needed to identify, lease, develop, produce, process, transport, transmit, refine or generate energy and critical minerals – a sweeping expansion from the former, narrower scope focused on electricity and fossil fuels
- provides $1 billion in new appropriations through fiscal year (FY) 2028, with up to 3 percent available for administrative costs
What This Means for Project Sponsors
The practical implications of these changes are substantial:
- Trump Administration Approval of LPO. At the end of the first Trump Administration, it became apparent that the administration was preparing to use the DOE LPO to support second-term projects and objectives. This "revamp" of the DOE LPO confirms the Trump Administration's desire and ability to use the program in the coming years.
- Wider Eligibility. Projects that would not have qualified under the prior emissions-focused 1706 program – including midstream fossil infrastructure, baseload generation and grid stability resources – may now qualify under the broadened Energy Dominance authority.
- Shift in Policy Orientation. The statute's focus has shifted from emissions reduction and climate goals to energy reliability, capacity expansion, and supply chain security. This aligns with the Trump Administration's broader "energy dominance" agenda and may open doors for traditional energy and mineral projects that previously faced barriers to federal support.
- Programmatic Changes. While the statute is now law, DOE is still in the process of implementing the new 1706 program. Furthermore, the program continues to adjust to changes in the administration and new leadership, which include cuts to personnel and structural changes that are still being implemented.
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