A Monday Senate Test for Making Data Centers Pay

WASHINGTON, Nov. 7 — TheThe four senators who wrote the bipartisan permitting bill released a reworked text on Saturday. It keeps the bill’s rules making data centers pay for the grid upgrades they need, and adds a federal program to advise the towns where they are built. The Senate’s first vote of the lame-duck session, at 5:30 p.m. Monday, will show whether the bill can move this year.

The sponsors, Sens. Shelley Moore Capito, Mike Lee, Sheldon Whitehouse and Martin Heinrich, called the text a substitute amendment to the Bipartisan American Affordability and Jobs Act of 2026, with “clarifying, conforming, and technical edits.”

Ms. Capito (R-W.Va.) and Mr. Lee (R-Utah) chair the Environment and Public Works and the Energy and Natural Resources committees; Mr. Whitehouse (D-R.I.) and Mr. Heinrich (D-N.M.) are their ranking members. The text is drafted as an amendment to H.R. 2347, the bill on Monday’s calendar. On paper, H.R. 2347 is the Survivor Justice Tax Prevention Act, which would exclude certain nonpunitive damages for sexual acts or sexual contact from gross income; the Senate Daily Press Gallery’s floor schedule calls it “the legislative vehicle for the permitting reform bill.”The VehicleSen. John Thune filed for cloture on taking up H.R. 2347 on Sept. 30, the day the permitting bill was introduced. Seventeen Republicans signed the motion, Ms. Capito among them. Monday’s vote, on cloture on the motion to take up H.R. 2347, needs 60 votes.

For the companies building data centers, the bill would write into federal law a fight now being settled state by state. In Illinois, ComEd has put the cost of connecting 30 data centers to its grid at $3.1 billion, Capitol News Illinois reported last month, and the argument over who pays is before the state’s regulators.

What It Does

The substitute adds a section to the Federal Power Act headed “Ratepayer Protection With Respect to Data Centers.” “No portion of the retail incremental cost may be allocated to, or recovered in the rates of, any customer other than a computational load owner or a computational load operator,” it reads.Computational LoadThe text means buildings at one location that primarily hold computing equipment used for software, artificial intelligence, cryptocurrency mining or other computing at a data center. The version introduced on Sept. 30 applied to loads of 20 megawatts or more; the substitute’s definitions set no minimum size.

That cost is a reasonable assessment of what serving the data center adds, including generation, storage, transmission and distribution. Before building any of it, a utility would have to take reasonable financial assurances from the data center’s owner or operator sufficient to cover the expected cost, and the charges would continue if it walked away before the cost was recovered.

States could charge data centers more than cost and credit the surplus to other customers. They could also award service by open season or competitive solicitation to the bidders worth most to other ratepayers, require data centers to build, buy or contract for new generation to serve them, and put them on a class of transmission service that limits how much power they may draw, or when. Under a subsection titled “Protection of American Industry,” a state could give data centers terms “less favorable than” those for other large industrial, manufacturing or commercial customers. The text says that state authority already belongs to the states: it “recognizes and confirms” it and “is not the source of that authority.” The cost floor and the state rate provisions apply to sites that connect on or after enactment; arrangements a state approved before then would stand, though a state could revise them, where its own law allows, to bring them into line.

A second part gives the Federal Energy Regulatory Commission 90 days to revise its 1994 transmission pricing policy, so that utilities charge transmission customers serving data centers “the embedded cost and a reasonable assessment, as determined by the Commission, of the incremental cost of transmission service,” with a lower price for those that elect non-firm service, and to propose a rule; the final rule would follow within a year of the proposal.

Heatmap wrote that the bill “would create the toughest measure against data centers ever enacted.”Full FreightHeatmap’s phrase for the program: it “would let states and utilities require data centers to pay full freight for system upgrades.” New in the substitute is a Data Center Community Assistance Program, which the Energy Department would set up within 180 days to give state, local and tribal governments, on request, “objective and technically sound information, resources, and technical assistance” on a project’s potential effects on energy, water, infrastructure, the economy and the community. The department could not recommend whether any project should be approved, and the text does not explicitly authorize funding for the program, as Heatmap noted.

Heatmap also reported that the new text closes a loophole that might have let data centers with gas plants behind the meter profit by selling surplus power to the grid. The change is to a provision meant to bring home batteries and other small resources into wholesale power markets: each qualifying facility must now have a rated capacity of not less than 5 kilowatts and not more than 5 megawatts.

“It also makes sure data centers pay for the energy they use and the grid upgrades they cause, instead of passing those costs on to New Mexico families,” Mr. Heinrich said in the sponsors’ statement.

The transmission changes cut both ways for utilities. The substitute drops the introduced bill’s express simultaneous-filing route: where a state has not decided an application within a year of its filing, the federal siting backstop becomes available, though federal pre-filing work may begin earlier, and other grounds for it, such as a state’s denial, are unchanged. Monopoly utilities outside a power market are spared a joint planning mandate, but remain subject to interregional planning and to oversight of local lines.

It also makes sure data centers pay for the energy they use and the grid upgrades they cause, instead of passing those costs on to New Mexico families.

The Count

Democrats won control of both houses of Congress on Tuesday, the Associated Press reported. The odds have lengthened since: TD Cowen cut its estimate of the bill’s chance of success to about 25 percent from about 40 percent on Wednesday, Reuters reported. House Minority Leader Hakeem Jeffries said in a statement to Politico on Thursday that he opposed the bill in its current form, Inside Climate News reported. Scott Segal of the law and lobbying firm Bracewell sees little chance it passes by year’s end, the outlet reported.

The Wilderness Society restated its opposition on Saturday. “Americans deserve permitting reform that isn’t crafted behind closed doors and rushed to the Senate floor,” its president, Tracy Stone-Manning, said in a statement quoted by Heatmap. Environmental groups have objected that the bill would revise review laws such as the National Environmental Policy Act, Inside Climate News reported, and warn that a provision meant to protect approved projects could make it harder to challenge fossil-fuel projects even when new evidence of harm emerges. The 106 Coalition, a group of tribal organizations, said after Saturday’s changes that it would still oppose the bill and wanted its changes to the National Historic Preservation Act removed, Heatmap reported.

The Democratic sponsors say they will not wait for the new Congress in January. “This is the closest we have come to actually finding something that can get signed into law, and I’m not going to wait,” Mr. Heinrich said in a statement to Reuters on Wednesday. “It’s a bird in the hand,” Mr. Whitehouse said in a separate statement.

BGR Group, a Washington lobbying firm, lists permitting reform among the measures somewhat likely to pass, and notes that it would still have to be reconciled with the House-passed SPEED Act. Heatmap wrote that senators are probably hoping for far more than 61 votes on Monday, because House rules may require overwhelming bipartisan support to send the measure to the president.