What landed in the Senate on September 30
Senators Mike Lee of Utah, Shelley Moore Capito of West Virginia, Martin Heinrich of New Mexico, and Sheldon Whitehouse of Rhode Island introduced the Bipartisan American Affordability and Jobs Act of 2026, a permitting reform package that pairs faster approvals for energy infrastructure with a specific mandate on data centers. According to the Senate Energy and Natural Resources Committee, the bill forces data centers to pay their fair share by requiring them to cover all of their associated transmission costs.
That single provision is the headline for this audience, but the bill is broader. It streamlines transmission planning, sets advanced technology requirements for grid expansion, and revises the Federal Power Act to let FERC permit interstate transmission lines when individual states block them, with permitted projects protected from revocation absent extraordinary circumstances or legal violations. It also caps NEPA lawsuits to within 150 days of a federal permit's issuance, a direct response to years of litigation delay on energy projects.
Why this bill exists now
Senator Martin Heinrich was blunt about the motivation behind the transmission cost provision: those costs, he said, cannot be rate-based and passed on to somebody's electric bill. That is a direct response to the same dynamic playing out at PJM and other grid operators, where utilities have proposed spreading data center interconnection and backstop capacity costs across the entire ratepayer base rather than billing the load that causes them. Heinrich represents New Mexico, a state with no major hyperscaler presence yet but plenty of exposure to transmission buildout tied to data centers elsewhere in the West.
Senator Shelley Moore Capito framed the bill's permitting side as making infrastructure projects faster, more efficient, and easier to build, a priority Republicans have pushed for oil, gas, and transmission alike. The bipartisan structure, two Republicans and two Democrats as lead sponsors, reflects a negotiated trade: Republicans get Clean Water Act limits and faster permitting, Democrats get renewable project approvals and the ratepayer protection language on data centers. Getting four senators from opposite ends of the political spectrum to co-sponsor a 417-page bill is itself a signal of how much pressure both parties are feeling from constituents over rising electricity bills.
The numbers the bill's backers are leaning on
Modeling from Greenline Insights, cited by the bill's sponsors, projects the legislation would add nearly 100 gigawatts of wind, solar, and battery capacity by 2035 and roughly 40 gigawatts of interregional transmission capacity over the same period. Those figures are doing a lot of political work, since the bill's permitting provisions are what make that build-out feasible on a reasonable timeline, and 100 gigawatts of new generation would meaningfully ease the same supply crunch that just forced FERC to suspend PJM's backstop procurement.
On the consumer side, the same modeling projects a 7 billion dollar reduction in electricity delivery costs by 2035 and 1.1 billion dollars in residential bill reductions. Expect those two figures to anchor the bill's public messaging through the midterms, since protecting ratepayers from data center-driven bill increases is a far easier sell than permitting reform on its own, and lawmakers in both parties clearly expect rising electricity bills to be a live issue with voters this cycle.
What stands in the way
The Senate will not vote on this bill until after the November midterm elections, and the text itself runs 417 pages, which guarantees a slow committee process even with bipartisan sponsorship. Senate Democrats previously rejected a separate House-passed ratepayer protection bill for lacking real enforcement mechanisms, and this bill's backers appear to have built broader FERC authority in specifically to answer that objection, including the expanded power to approve interstate transmission lines over a single state's objection.
House conservatives are a wildcard. The bill's Clean Water Act limitations and expanded federal transmission siting authority could draw opposition from members who favor state control over infrastructure siting, and the outcome of the midterms will shape whether this version of the bill, or some renegotiated successor, has any realistic path in 2027. A shift in either chamber's majority could just as easily kill the current bipartisan text as revive it in a different form.
The pattern connecting this to PJM's auction mess
This bill arrives one day after FERC suspended PJM's backstop capacity procurement specifically over cost allocation concerns, and the timing is not a coincidence. Regulators, utilities, and now Congress are converging on the same conclusion: the current system for paying for data center-driven grid upgrades is not holding up, whether the forum is a FERC filing or a Senate committee markup, and both institutions are reaching for the same fix, tying costs more directly to the load that creates them.
If this bill or something like it eventually becomes law, data center developers would lose the option of having their transmission connection costs socialized across a utility's broader customer base. That changes the economics of siting in regions with constrained transmission capacity, since the full cost of building new interconnection would land on the project rather than getting diluted across millions of ratepayers, and that cost could run into the hundreds of millions of dollars for a single large campus in a transmission-constrained region.
What CIOs should do with this now
Nothing changes in the next few months, and no project currently in development needs to be re-underwritten on the assumption this bill passes as written. But the direction of travel is clear enough that any new multi-year colocation or build-to-suit agreement should be modeled against a scenario where the developer, not the utility's broader ratepayer base, bears full transmission interconnection cost, a scenario that is already effectively playing out in PJM territory regardless of whether this federal bill ever passes.
Treat this bill as a leading indicator rather than a near-term constraint. The states and utilities most exposed to data center-driven cost allocation fights, Virginia and the PJM footprint chief among them, are the ones where this kind of federal cost allocation mandate would land hardest and fastest if it eventually passes. Factor that political risk into any long-horizon capacity commitment in those regions, and ask prospective colocation partners directly how a full-cost transmission mandate would change their pricing before you sign anything that runs past 2030.
