President Donald Trump backed the Bipartisan American Affordability and Jobs Act in Washington on 9 November, saying of the energy permitting bill, “We are behind it 100%,” WTAE reported. The Senate voted 73-25 the same day to begin debate on the proposal, which would speed federal approvals for energy projects and require large data centres to bear more of the cost of expanding the electricity grid, CNBC reported. The vote was a procedural step, not final passage.
Key points
- Trump endorsed the bipartisan bill on 9 November, when a 73-25 Senate vote opened debate.
- New data centres demanding at least 20 megawatts of electricity would have to cover additional infrastructure costs needed to serve them.
- Grid Strategies estimates an additional $35 billion in data-centre payments towards transmission over the next decade, based on an earlier version of the bill.
- The proposal would also change reviews under four federal environmental and heritage laws.
The Senate’s 73-25 vote opens debate
The bill brings two questions into the same congressional negotiation: how quickly energy infrastructure can gain approval, and how much of the grid built to serve a large customer that customer should pay for. Electricity demand is growing partly because of AI and data centres. Federal permitting is among the obstacles to building the power plants and transmission lines needed to meet that demand, according to energy experts cited by the broadcaster.
Republican senators Shelley Moore Capito of West Virginia and Mike Lee of Utah negotiated the bill with Democratic senators Martin Heinrich of New Mexico and Sheldon Whitehouse of Rhode Island. CNBC reported that the measure would still need approval from the House of Representatives if it passes the Senate. House Democratic Leader Hakeem Jeffries’ office said the legislation “falls short” in several areas, according to WTAE.
Trump’s endorsement places the White House behind a proposal whose data-centre provisions go further than a general call for companies to build more power. AI Affairs previously reported that Trump said new, large US data centres must generate their own electricity. Under the bill now before the Senate, the question is also who pays for infrastructure connecting large users to the wider grid.
The 20-megawatt threshold and grid costs
Under the proposal, new data centres drawing at least 20 megawatts of power would pay for the extra grid works needed to supply them, Yahoo reported. The proposal also contains safeguards intended to keep households and businesses from paying for grid investments when a project falls through. How much relief customers receive would depend in part on decisions by federal and state regulators.
States would gain additional options to charge data centres more than the cost of serving them and put the extra revenue towards lower electricity costs for other customers. Virginia, Ohio and Florida have already approved special electricity rates intended to make large users bear more of the infrastructure costs associated with their demand. The proposed federal measure would give states another means of allocating those costs.
Grid Strategies estimates that data centres would pay an additional $35 billion towards transmission infrastructure over the next decade under the legislation, compared with current policies. Rhodium Group estimates that the average household could save between $50 and $78 a year on electricity by 2040 against a scenario without the bill. Both analyses used an earlier version of the proposal, before the senators released amendments on 7 November. The household figures are projections, rather than reductions promised from current bills.
Rob Gramlich, president of Grid Strategies, said the bill was designed to make data centres pay more so that homes and businesses would pay relatively less. His organisation’s estimate concerns transmission payments, while the household projection comes from Rhodium Group. The bill would also allow states to decide whether to impose charges above the cost of serving a data centre.
Federal reviews and the 7 November amendments
The permitting provisions would amend the National Environmental Policy Act, the National Historic Preservation Act, the Clean Water Act and the Endangered Species Act to accelerate reviews, CNBC reported. The proposal would also change the process for approving transmission lines. For developers, the package offers a route to faster decisions on energy projects alongside the proposed data-centre payment rules.
The faster process has opponents as well as industry supporters. The bill would make fossil-fuel projects easier to approve, drawing objections from environmental groups. Critics warn that the revisions could erode federal protections and restrict residents’ ability to oppose new projects. Trade bodies for the clean-energy sector and fossil-fuel producers back the bill.
The four Senate negotiators released amendments on 7 November aimed at some of those objections, including stronger consultation with Native American tribes and more opportunities for states to weigh in on proposed projects. Yahoo reported that environmental and tribal groups warned the legislation would weaken federal reviews and undermine tribal sovereignty. Heinrich said the revision strengthened tribal consultation, while the Sierra Club said the changes fell short of resolving its objections.
