The final quarter of 2025 brought several important regulatory updates from federal and California agencies affecting our industry. These updates are summarized in the following sections.
FEDERAL REGULATORY UPDATES
Endangered Species Act
On November 21, 2025, the United States (U.S.) Fish and Wildlife Service (USFWS), in coordination with the National Marine Fisheries Service, published four proposed rules in the Federal Register to revise the federal Endangered Species Act (FESA) for increased efficiency. The four proposed rules include the following changes:
- Listing and critical habitat (50 Code of Federal Regulations [CFR] part 424):
- revising listing, delisting, and critical habitat regulations to restore the 2019 framework;
- clarifying the definition of “foreseeable future;”
- reestablishing a two-step process for designating unoccupied habitat; and
- allowing transparent consideration of economic impacts while using the best scientific and commercial data available.
- Threatened species protections (50 CFR part 17; section 4[d]):
- replacing the blanket 4(d) rule for threatened species with species-specific 4(d) rules that expressly consider conservation and economic impacts and ensure protections are necessary and advisable for each species rather than applied uniformly.
- Critical habitat exclusions (50 CFR part 17; section 4[b][2]):
- reinstating and refining the critical habitat exclusion framework to clarify how economic, national security, and other impacts are weighed when determining whether to exclude areas from critical habitat, while restating delisting criteria and providing a clearer basis for excluding areas that would not result in species extinction.
- Interagency cooperation (50 CFR part 402):
- amending interagency cooperation regulations under Section 7 to return to a 2019-style “effects of the action” and “environmental baseline” framework;
- tightening the definition of what is “reasonably certain to occur;”
- clarifying the environmental baseline; and
- removing the use of offsets as reasonable and prudent measures for incidental take.
Together, the proposed rules would reinstate several 2019 provisions that were changed in 2024 and would align the FESA implementation with the Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, which was included in Insignia’s Q3 2025 regulatory update.
Waters of the United States
On November 20, 2025, the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (USACE) published in the Federal Register a proposed updated definition of “Waters of the United States” (WOTUS) under the Clean Water Act (CWA) to align with the 2023 Supreme Court decision in Sackett v. Environmental Protection Agency. The updated definition of WOTUS focuses federal jurisdiction on relatively permanent, standing, or continuously flowing waters and wetlands that have a continuous surface connection or are practically indistinguishable from such waters. The updated definition also clarifies key definitions, including “relatively permanent,” “wet season,” “continuous surface connection,” “tributary,” “ditch,” “prior converted cropland,” and “waste treatment system.”
Additionally, updates to the definition remove interstate waters as a standalone jurisdictional category, add an explicit groundwater exclusion, and simplify or broaden several exclusions, collectively reducing the range of wetlands, tributaries, ditches, and other features that qualify as WOTUS and are subject to federal permitting, particularly under CWA Section 404. The EPA and USACE note that many states already regulate waters more broadly or are developing new programs and that litigation and further guidance are anticipated following issuance of a final rule. The 45-day public comment period for the proposed updated definition closed on January 5, 2026.
Department of Energy
Department Reorganization
On November 20, 2025, the U.S. Department of Energy (DOE) announced a major reorganization and new organization chart intended to advance the administration’s energy dominance agenda by prioritizing scientific innovation, critical minerals supply chains, grid and artificial intelligence (AI) leadership while deprioritizing renewable energy and energy efficiency.
The reorganization eliminates the Office of Energy Efficiency and Renewable Energy (EERE) and creates a new Office of Critical Minerals and Energy Innovation that replaces former EERE programs, manufacturing and supply chain work, and fossil-related minerals projects under a single Assistant Secretary-level office. The Under Secretary of Energy now oversees a portfolio that includes the rebranded Office of Energy Dominance Financing and the Office of Electricity with much of the former Grid Deployment Office’s grant work, as well as a new Hydrocarbons and Geothermal Energy Office that is focused on geothermal alongside oil and gas. A separate Under Secretary for Science is tasked with driving a “science and innovation mission” centered on AI, including a new Office of Fusion, an Office of Artificial Intelligence and Quantum, and a repositioned Office of Technology Commercialization that will play a lead role in implementing the November 2025 Genesis Mission executive order, which is focused on AI innovation.
Interim Final Rule
The U.S. DOE’s Loan Programs Office issued an interim final rule—the Energy Dominance Financing Amendments—on October 28, 2025, amending its loan guarantee regulations to implement the Energy Dominance Financing provisions of the One Big Beautiful Bill Act, which was included in Insignia’s Q3 2025 regulatory update. The interim final rule loan guarantee immediately expanded and reoriented the 2020 Title XVII program, with the public comment period closing in December 2025. The rule broadens the definition of eligible “energy dominance financing projects” to cover a wider range of energy and critical minerals infrastructure; alters Section 1706 eligibility from emissions-focused criteria to reliability-, capacity-, and energy security-focused criteria; and removes general community-impact analysis requirement from the review process. However, customer-benefit assurances for utilities remains unchanged, in addition to certain regulatory provisions and credit standards, such as the requirement for a reasonable prospect of repayment and the overall $250 billion loan guarantee cap through September 30, 2028.
CALIFORNIA REGULATORY UPDATES
Assembly Bill 1319
Approved by the governor on October 11, 2025, Assembly Bill (AB) 1319 creates a mechanism for the California Department of Fish and Wildlife (CDFW) to respond if FESA protections for species that are not already protected under the California Endangered Species Act (CESA) are decreased. Specifically, AB 1319 requires the CDFW to assess whether federal actions reduce protection of endangered or threatened species. Examples of qualifying reductions in protections include (but are not limited to) rulemakings by federal resource agencies, congressional amendments, and presidential executive orders. If a reduction is identified, the CDFW must publish findings designating the species as a provisional candidate under CESA. Under CESA, provisional candidates receive the same protection as CESA candidate.
California State Wildlife Action Plan
California’s State Wildlife Action Plan (SWAP) update was released on October 1, 2025. The SWAP is a congressionally mandated, non-regulatory blueprint that guides statewide wildlife conservation using the latest science, conservation priorities, and recommended actions and tools. As SWAP was last updated in 2015, the current 2025 update was shaped by public and tribal input and continues to leverage nearly $71 million in California wildlife grant funding. The funding is used to implement SWAP strategies, support projects such as bat disease monitoring and the recovery of unarmored threespine stickleback (Gasterosteus aculeatus), among other initiatives.