DOE’s FY27 Budget Request: the Good, the Bad, and the Ugly
Surprise! It’s a double album drop with the release of both the President’s Budget Request (PBR to us, not Pabst Blue Ribbon) and the Department of Energy’s (DOE) Budget Justification for Fiscal Year 2027 (FY27) last Friday. As policy wonks, we here at FAS are here to give you the rundown on all the details for DOE’s energy and nuclear weapons program budgets.
Jump to…
- The Good
- The Bad
- The Ugly
- Spotlight: Nuclear Weapons/NNSA
- Spotlight: Office of Critical Minerals and Energy Innovation
- Spotlight: Grid Funding for OE, CESER, and Baseload Power
- Spotlight: HGEO
Big Picture
Overall, DOE is requesting a 10% increase to its FY27 budget compared to 2026, bringing its total annual budget to $53.9 billion. However, this additional money would go almost entirely to the National Nuclear Security Administration (NNSA), giving them a 12% bump from 2026 levels to reach $32.8 billion. The remaining $21.1 billion left for non-NNSA DOE programs represents an 11% reduction of DOE discretionary funding from 2026 enacted levels.
It’s important to note, however, that this budget request is just that, a budget request. Congress will likely have its own ideas about how DOE should be funded for FY27, and that too will evolve as staffers take into account appropriations requests from stakeholders and appropriators engage in negotiations and reconciliation over the coming months.
This year’s budget request introduces a number of new accounts, intended to reflect DOE’s reorganization last November. New accounts have been created for the Office of Critical Minerals and Energy Innovations (CMEI) and Hydrocarbons and Geothermal Energy Office (HGEO), with former accounts for Energy Efficiency and Renewable Energy (EERE), Fossil Energy (FE), and others reorganized under them.
Additionally, two large accounts have been created for Baseload Power and Artificial Intelligence & Quantum. The administration has proposed to fund these accounts at the level of $3.5 billion and $1.2 billion, respectively, by repurposing IIJA funding for the Hydrogen Hubs (likely also requiring the use of funds from cancelled awards). The Baseload Power funding will support activities across HGEO, the Office of Electricity (OE), CMEI, the Office of Nuclear Energy (NE), and the Office of Cybersecurity, Energy Security, and Emergency Response (CESER); the Office of Artificial Intelligence and Quantum’s (AIQ) funding will support seven new supercomputers at the national labs.
Appropriators in Congress have expressed fatigue with DOE’s reorganizations, so it remains to be seen whether Congress will adopt these changes or keep the old account structure and leave it to DOE to reapportion money internally.
The PBR also indicates a move to rehire staff for DOE, after the agency lost 3,050 federal employees last year. Estimated numbers in the FY27 request reveal plans for a 3.5% increase in the number of staff supported by the accounts for DOE’s energy programs1 and a 7% increase in the number of staff supported by NNSA’s accounts. The FY26 estimate only indicates the number of positions available, though, not the number of current employees, so the actual rehiring effort is likely much larger than the PBR numbers suggest. Rehiring is also likely to be a slow and difficult process, since the most qualified former employees are unlikely to return. Some recent DOE job postings have remained open for months without a hire.
Below, we present a rapid-fire summary of the budget numbers and highlights you need to know. And then keep scrolling for deep dives on the requests for NNSA, CMEI, grid programs, and HGEO.
The Good: New funding for the grid, clean firm energy, and critical minerals supply chains
- +$750 million in funding for the new Baseload Power account to reconductor existing transmission lines and expand grid capacity by 3-6 GW (see grid spotlight below)
- +$500 million and +$300 million in funding for the new Baseload Power account to uprate hydropower and nuclear power plants, respectively
- +$291 million (339%) in critical minerals and materials funding for the Advanced Mining and Mineral Production Technology Office within CMEI (see CMEI spotlight below)
The Bad: Cancellations and budget cuts across DOE energy programs that Congress will likely temper
- -$15.2 billion in rescissions of unobligated IIJA Funding: The Trump administration is once again expressing its opposition to implementing the remaining IIJA funding. The proposed cancellations appear to be indiscriminate of whether the programs align with this administration’s priorities or not. For example, DOE just announced round 3 of funding for the Battery Materials Processing and Battery Manufacturing and Recycling Programs, offering up to $500 million to support critical minerals processing, recycling and derivative battery manufacturing. Yet, in a contradictory move, the PBR would cancel the remaining $746 billion still available for these two programs.
- -$2.3 billion rescission of unobligated funding from the 2009 Consolidated Appropriations Act for the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program: This would effectively cancel all of the remaining credit subsidy funding for the ATVM loan program, significantly limiting its ability to take on risk and provide low-cost financing for innovative projects that need government loans the most.
- -$1.9 billion (-63%) in energy innovation and affordability funding for CMEI compared to the FY26 budget for all of the offices that were reorganized into CMEI (see CMEI spotlight below).
- –$1.1 billion (-15%) for the Office of Science (SC): Climate Change research would be removed and replaced by high-performance computing, AI, quantum information science, fusion, and critical minerals research. Science workforce initiatives designed to encourage greater diversity would be eliminated entirely.
- -$150 million (-64%) for the Advanced Research Projects Agency – Energy (ARPA-E): Funding for this office is being redirected away from clean energy and towards AI, critical materials, and fusion fuels. Electric vehicle research and direct air capture are explicitly defunded.
The Ugly: Significant increases to funding for nuclear weapons and fossil fuels
- +$7 billion (35%) for nuclear weapons production and sustainment (see NNSA spotlight below)
- +$1.94 billion in funding through the new Baseload Power account to preserve coal, oil, and gas industries: Activities would support upgrades to oil, and natural gas plants, pipelines, and fuel storage infrastructure for the purpose of extending the life of retiring coal and gas plants (4 GW and 5 GW, respectively) and adding 3 GW of new gas power to the grid.
- +$23 million (329%) for the Office of Coal’s activities supporting coal mining and processing to extend the life of existing mines (see HGEO spotlight below)
Spotlight: Nuclear Weapons/NNSA
The NNSA’s budget is broadly divided into four buckets: Weapons Activities (exactly what it sounds like), Defense Nuclear Nonproliferation (which focuses on nonproliferation, counterproliferation, and nuclear-related counterterrorism), Naval Reactors, and Federal Salaries and Expenses. It is very easy to see which of these categories this administration is prioritizing.
The NNSA’s proposed $32.8 billion topline budget is a 29% increase from the FY26 enacted amount, but approximately 84% of that total is slated for Weapons Activities, which surged 35% from $20.4 billion enacted in FY26 to $27.4 billion in FY27. This is in addition to another $3.9 billion provided by the One Big Beautiful Bill Act (OBBBA), most of which will be obligated in FY26.
The categories under weapons activities include warhead production modernization, infrastructure and operations, and stockpile research, among other things. Highlights from the FY27 budget request reflect the surging costs that come with modernizing all three components of the nuclear triad at the same time:
- A new “Future Programs” budget line item adds $99.8 million toward feasibility studies for new-design nuclear weapons. One of these is believed by experts to be a warhead designed for hard and deeply buried targets, such as underground bunkers.
- Two major warhead programs—the new W93 warhead for submarine-launched ballistic missiles and the modified W87-1 for intercontinental ballistic missiles—increased by 37% to $1.1 billion and 41% to $913 million, respectively. Both these programs are projecting multi-billion-dollar costs by 2031.
- Funding for the refurbished W80-4 LEP long-range standoff weapon (LRSO) cruise missile warhead reflects the weapon’s transition from development toward production, with the First Production Unit scheduled for FY27. Over $1 billion was requested for FY27 (-17% from FY26), and outyears will dip under $1 billion.
- Similarly, the $46.4 million FY27 request (-6% from FY26) for the B61-13 bomb reflects the program’s planned transition from stockpile modernization to operations after completing its Last Production Unit in FY28. The out-year funding shows over $1 billion for FY 2028, and it is expected to achieve limited operational deployment by September 2032.
- $400 million for the W80-5 sea-launched cruise missile (SLCM-N) warhead was carried over from OBBBA. No other funds for the program were requested for FY27, but the line item budget has a steep hike and will surpass $1 billion starting in FY28. In comparison, the FY26 request was $272.3M.
- Funding for plutonium modernization and pit production at Los Alamos and the Savannah River Site nearly doubled in FY27, contributing to total production modernization costs increasing by 65% to $8.8 billion. This investment is meant to enable the NNSA to meet a new goal of producing 100 plutonium pits per year by 2028.
- The FY27 request also includes a 69% increase to $880.7 million for “Tritium and Defense Fuels,” which covers tritium modernization programs as well as efforts to reestablish a domestic uranium enrichment capacity for reactor fuel supply and further tritium production instead of relying on old stockpiles.
Interestingly, the Stockpile Sustainment program office has been renamed Stockpile Operations (under the Stockpile Management program), likely reflecting a shifting focus from its maintenance function toward prioritizing production and modernization for new warheads.
Spotlight: CMEI
CMEI is a mega-office within DOE that reports directly to the Secretary of Energy. Its programs and sub-offices are organized under three pillars: the Office of Critical Minerals, Materials, and Manufacturing (CM3), the Office of Energy Technology (E-Tech), and the Office of Innovation, Affordability, and Consumer Choice (IACC).
The FY27 request would cut CMEI’s budget by 63% from $3.0 billion down to $1.1 billion. A closer look at the budget for each pillar reveals even deeper cuts: E-Tech faces an 88% reduction, while IACC faces a 93% reduction, both achieved through eliminating or nearly eliminating programs formerly under EERE, State and Community Energy Programs, and the Federal Energy Management Program. Notably, the administration is once again proposing to eliminate funding for the Weatherization Assistance Program (WAP), which helps reduce energy costs for low-income households. Ending WAP now, while the U.S. faces a new energy crisis induced by the war in Iran, runs counter to the administration’s stated energy affordability priorities. These cuts would also gut much of DOE’s work on renewable energy, low-carbon transportation technologies, and building and industrial electrification efforts, though the Baseload Power account does offer an additional $500 million in funding for E-Tech to uprate hydropower plants.
CM3 is the only pillar with a budget increase of 85%, but even that is concentrated within a single office: the Advanced Mining and Mineral Production Technologies Office is slated to receive a 339% budget increase. Meanwhile, other offices under CM3, such as the Manufacturing Deployment Office and the Advanced Materials and Manufacturing Technologies Offices which run both critical minerals and manufacturing programs, are facing cuts of 18% and 19%, respectively.
Spotlight: Grid Funding for OE, CESER, and Baseload Power
Across the board, grid focused offices – the Office of Electricity (OE), the Grid Deployment Office (GDO), and the Office of Cybersecurity, Energy Security, and Emergency Response (CESER) – lost significant levels of funding in the FY27 budget request. OE and CESER would see their budgets shrink by $56 million (22%) and $30 million (16%), respectively, compared to FY26 enacted levels: significant indeed at a moment when electricity demand is surging, extreme weather is straining grid infrastructure with increasing frequency, and the U.S. grid is already widely acknowledged to be aging and vulnerable. Underfunding these offices carries real risk for the administration’s own energy dominance goals, let alone broader reliability, resilience, and affordability of the U.S. energy system.
OE leads R&D activities and programs that strengthen and modernize our nation’s power grid to maintain a reliable, affordable, and secure electricity delivery infrastructure. According to DOE, OE will focus on “electrical energy dominance by combating the capacity crisis, navigating growing complexity, strengthening supply chains, and securing grid infrastructure” in FY27.
Through the reorganization, OE acquired GDO’s staff and programs, so their funding has been moved into the Electricity account for FY27. These programs face the largest cuts: Distribution & Markets and Hydropower Incentives (which were moved to CMEI) would see their budgets zeroed out, while Transmission Planning & Permitting faces a 61% decrease. Cuts were also made to the budgets for Energy Storage (-39%), Applied Grid Transformation Solutions (-24%), and Resilient Distribution Systems (-18%).
On the other hand, OE potentially stands to gain $750,000,000 in repurposed IIJA funding through the Baseload Power account for the purpose of reconductoring existing transmission lines with advanced conductors to unlock approximately 3-6 GW of incremental transfer capacity on constrained corridors. This is an important activity as reconductoring can double the capacity on existing transmission lines and is more cost effective than building new transmission lines, allowing more generators and customers to connect to the grid. However, this gain does not offset the loss of funding for ongoing activities designed to address other challenges facing the grid and grid supply chains.
Complementing OE, CESER plays a critical role in strengthening the security and resilience of the U.S. energy grid and securing U.S. energy infrastructure from cyber threats. CESER’s budget structure has also been reorganized for FY27. The new Threat Analysis and Incident Response (TAIR) program seems to merge the former Policy, Preparedness, and Risk Analysis and Response and Restoration programs, while the Infrastructure Hardening and Technology Development (IHTD) program appears to inherit the former Risk Management Technology and Tools program. Assuming this is the case, TAIR faces a 31% budget reduction from $57 million in FY26 to $39 million in FY27; IHTD faces a 11% budget reduction from $110 million to $97 million. These cuts are concerning given the recent news of cyber attacks to U.S. energy and water infrastructure as a result of the war in Iran – the very kinds of attacks that CESER’s work is designed to prevent and address.
The proposed Baseload Power account potentially offers a small amount of additional funding for CESER ($10 million) to “expand testing of supply chain components to identify and mitigate cybersecurity vulnerabilities.” However, that amount is only a third of the $30 million CESER stands to lose in FY27 funding if Congress follows the administration’s lead.
Spotlight: HGEO
HGEO was created during DOE’s reorganization by merging the Geothermal Technologies Office (GTO) with the Fossil Energy Office (FE).2 The new Office of Subsurface Energy is the largest office in HGEO, and it is composed of three suboffices: Coal, Oil and Gas, and Geothermal. Overall, the administration is requesting a 14% cut to HGEO’s budget, with the Office of Subsurface Energy facing a 19% cut. The Office of Geothermal maintains its funding at a constant $150 million, same as in FY26, while the Offices of Coal and Oil and Gas see decreases of 35% and 14%, respectively.
The Office of Geothermal’s budget has been reorganized under new program categories, moving away from technology specific categories to a focus on supporting technologies at different levels of maturity: Pilots and Demonstrations ($92 million), Technology Research & Development ($40 million), and Commercial Scale-Up ($18 million). The Pilots and Demonstrations funding would continue the momentum from the $171.5 million Notice of Funding Opportunity (NOFO) for Enhanced Geothermal Systems (EGS) demonstrations, the largest federal funding commitment for EGS ever, in February. At the same time, however, the administration is also requesting a rescission of $25 million in remaining unobligated IIJA funding for the very same program, a counterintuitive move that seems to be for the sole purpose of expressing opposition to anything funded by IIJA.
Under the Office of Coal, the Mining and Processing subaccount sees a dramatic 329% increase in funding for R&D aimed at modernizing coal mining and processing. This includes the application of AI tools and robotics to “extend the life of existing mines and coal-based power infrastructure”, reinforcing the administration’s ongoing use of executive power and taxpayer dollars to boost a declining energy source.
Lastly, the proposed Baseload Power account would offer an additional $1.94 billion in funding for coal, oil, and gas infrastructure upgrades to prevent 4 GW of coal power from retiring, preserve 5 GW of power from natural gas plants, and add an additional 3 GW of gas power – the single largest request for new funding in the entire DOE budget.