What the U.S. Senate’s permitting bill means for data center development

Although Congress failed to pass the Ratepayer Protection Act, another bipartisan bill the U.S. Senate intends to take up would codify even stronger protections for American taxpayers facing surging electric bills due to data centers.

Yet the long-awaited permitting reform bill, the Bipartisan American Affordability and Jobs Act, would also accelerate data center buildouts and restrict impacted communities’ abilities to reject those projects, critics warn.

The primary purpose of the 417-page bill is to expedite the permitting approval process for energy-related projects – such as natural gas pipelines, drilling and mining, and data center infrastructure – by scaling back environmental and judicial reviews.

Sponsors of BAAJA say it will increase energy supply, lower electricity costs, and create more jobs as the country enters a new era of energy demand.

Notably, it also requires owners of data centers that draw more than 20 MW of power plugging into the electric grid to pay for the associated grid upgrade costs.

“We have an enormous opportunity to build big things again to meet that moment – to build more generation, expand our grid, create more jobs, lower energy costs, and make sure we have the energy we need to compete,” Senate Environment and Public Works Committee Ranking Member Martin Heinrich, D-N.M., stated.

“It should not take decades to build the infrastructure our country needs,” Heinrichs added. “Our Bipartisan American Affordability and Jobs Act will help us get to ‘yes’ or ‘no’ on energy projects faster.”

Without faster buildout of high-voltage transmission lines, additional power generation facilities, and other energy infrastructure, the U.S. demand for energy will overtake supply within the next ten years, according to the North American Electric Reliability Corporation.

NERC’s 2026 forecast also noted that data centers are the primary drivers of the historically unprecedented surge in electricity demand.

But critics of BAAJA worry it would trample state and community rights by limiting litigation and local input, making it more difficult for states to deny federal projects, and most importantly, “seemingly make it impossible to put forward a pause or moratorium on an activity, even if the pause would only be to allow time for closer review of potential impacts,” the Wilderness Society warns.

Joined by nearly 200 other advocacy groups, Food & Water Watch called the bill a “sweetheart deal for data centers.”

“Communities are fighting AI data centers because they see first-hand the impacts these monstrosities are having on utility bills, quality of life and precious water resources they depend on,” policy director Jim Walsh at Food & Water Watch stated.

“Instead of helping, this bill will further harm families by facilitating a Big Tech power grab while limiting the power of states’ and local communities to protect the public. Congress must reject this cynical industry-backed effort[.]”