Bipartisan energy bill targets data center costs as Senate prepares debate

A bipartisan energy bill that would accelerate approvals for new power plants and transmission lines and require large data-center operators to cover a larger share of grid-upgrade costs is set for Senate debate on Monday. The legislation, known as the Bipartisan American Affordability and Jobs Act (BAAJA), has been in development for years and is seen as Congress’ first test of how to address public concerns over rising electricity prices and the expansion of AI-related data-center infrastructure.

Supporters argue the bill offers the most immediate opportunity to curb costs associated with the AI infrastructure build-out, though some Democrats remain skeptical that the provisions could spur additional construction. Investment firm TD Cowen lowered the bill’s passage odds to 25% from 40% before the recent election.

"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," said Senator Sheldon Whitehouse, the top Democrat on the Senate environment committee and a bill co-author.

"We'd be silly not to take this win," Whitehouse added.

The bill also includes safeguards intended to prevent households, businesses and other utility customers from bearing the cost if projects fail.

"The language that's in BAAJA that's focused on data centers is a good first step," said Jeremy Harrell, chief executive of ClearPath Action, a conservative clean-energy advocacy group.

President Donald Trump, who has endorsed the bill, highlighted its data-center provisions in a social-media post, warning that China could capture any data-center capacity the United States does not develop.

Industry reaction is mixed; the Data Center Coalition has not endorsed the measure and did not respond to requests for comment. Environmental and tribal groups oppose the bill, saying it weakens environmental reviews and undermines tribal sovereignty.

"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," said author and environmentalist Bill McKibben.

Democratic leaders, including House Democratic Leader Hakeem Jeffries and Senator Ron Wyden, have expressed concerns that the bill falls short on environmental protections and should be reworked.

Analysts estimate the bill could lower emissions from data-center operations by directing demand toward a cleaner electric grid rather than dedicated gas-fired plants, with potential reductions ranging from 31% to 90% depending on the power mix, according to the Rhodium Group.

Investment bank ING noted that sweeping federal legislation to rein in data-center construction remains unlikely while President Trump is in office, citing disagreements over the balance of authority between states and Washington.

Joseph Majkut of the Center for Strategic and International Studies said the measure is important for affordability and managing data-center growth, adding that the data-center cost provisions could be pivotal for the bill’s success.