Key facts
- The bill would require large data center operators to bear more of the cost of grid upgrades needed to serve them.
- TD Cowen put the bill's passage odds at 25%, down from 40% before the election.
- Senator Sheldon Whitehouse, a bill author, said Democrats ran and won on affordability and data center accountability.
- The Sierra Club and other environmental groups said the authors' amendment package would not resolve their objections.
- Rhodium Group estimated the bill's transmission and permitting reforms could cut associated greenhouse-gas emissions by 31% to 90%.
- The Data Center Coalition, an industry trade group, has not endorsed the bill and did not immediately respond to a comment request.
A bipartisan energy bill has become the US Congress' first test of how to address public anger over data centers and rising electricity costs, which helped Democrats to a landslide election victory last week. The legislation, the Bipartisan American Affordability and Jobs Act, was due to come before the Senate for debate on November 9.
The bill, years in the making, would speed approvals for new power plants and transmission lines while requiring large data center operators to bear more of the cost of grid upgrades needed to serve them. It would also establish protections meant to prevent households, businesses and other utility customers from being left with the bill if projects fail.
Investment firm TD Cowen said the chances of passage had fallen to 25% from 40% before the election. Senator Sheldon Whitehouse, the top Democrat on the Senate's environment committee and one of the bill's authors, told Reuters: "Democrats ran and won on affordability and data center accountability, and BAAJA will allow us to start delivering immediately on both of those election promises." He added: "We'd be silly not to take this win."
President Donald Trump, who has endorsed the bill, highlighted its data center provisions in a social media post on November 8 and urged the Senate to pass it. "Remember, China will take any Data Center that we don't want, and pay lots of money for it," Trump said. The Data Center Coalition, an industry trade group, has not endorsed the bill; representatives did not immediately respond to a request for comment.
The bill faces opposition from environmental and tribal groups who say it weakens environmental reviews and undermines tribal sovereignty. Author and environmentalist Bill McKibben said: "It would be highly ironic if the first action Congress took after an election largely defined by opposition to data centers would be to make it easier to build them." The bill's authors unveiled a package of amendments on November 7 intended to address some concerns, but the Sierra Club and several other environmental groups said the changes would not resolve their objections.
House Democratic Leader Hakeem Jeffries, who is expected to become speaker next year, told Politico on November 6 that the bill falls short on environmental protections and needs input from House Democrats. Senator Ron Wyden said in a statement on November 6 that Democrats should use their leverage after the election to negotiate a different approach, seeking to reduce red tape for all new energy projects without substantial risk of political interference.
Rhodium Group found that the bill's transmission and permitting reforms could allow more data center demand to be served through an increasingly clean grid rather than dedicated gas-fired power plants, reducing associated greenhouse-gas emissions by 31% to 90%, depending on the mix of power sources. ING said sweeping federal legislation to rein in data center construction remains unlikely while Trump is in office, citing disagreements over how much authority should reside with states versus Washington. Joseph Majkut of the Center for Strategic and International Studies said: "The provisions on data center costs might save the bill."