A new approach to grid charges
Section 2107 of the Bipartisan American Affordability and Jobs Act, or BAAJA, targets a pricing approach the Federal Energy Regulatory Commission adopted in 1994. That policy allows transmission providers to charge a new customer either the embedded cost of the existing system or the cost of expansion, whichever is higher, rather than adding the two together.
The bill would direct FERC to replace that choice with a combined charge for data centers and other computational load sites: the published rate for using the existing grid, plus the incremental costs attributable to the new customer. Customers choosing non-firm, interruptible service would have to be offered a lower rate.
Supporters distinguish the proposal from charging twice for the same expense. In an opinion piece, Ari Peskoe of Harvard Law School's Electricity Law Initiative argued that the charges address separate responsibilities: supporting the system already in place and paying for facilities needed to accommodate a data center.
The bill also includes an accounting safeguard. According to Foley Hoag, a data center's incremental-cost payments would count against the utility's annual transmission revenue requirement, reducing what it collects from other customers and preventing double recovery.
Although the 1994 approach is a policy statement, BAAJA would accompany its revision with congressional findings that computational-load rates covering less than both costs are not "just and reasonable," the legal standard FERC uses to evaluate rates.
Protections for other customers, with limits
A separate part of Section 2107 would establish a Ratepayer Protection Floor through a new Section 228 of the Federal Power Act. As introduced, it covers loads of at least 20 megawatts and requires payment of the full incremental costs of generation, storage, transmission and distribution. Covered customers would also have to provide financial assurance and remain responsible for stranded costs if they leave.
States could set charges above cost and use the surplus to benefit other customers. They could also establish a separate customer class, conduct open seasons, require data centers to supply their own generation or restrict how much power they draw from the grid.
Those provisions would not apply retroactively to every large customer. Foley Hoag says the introduced text limits the protection floor and the new state rate-setting and open-season tools to covered loads connecting on or after enactment. Agreements approved by FERC or a state before enactment would remain valid.
The distinction between infrastructure costs and wholesale electricity prices is also important. Monitoring Analytics, PJM's independent market monitor, attributed $9.3 billion of the increase in the region's 2025/2026 capacity auction costs to data centers. Those costs flow through to customer bills.
An Oct. 27, 2026, white paper from Columbia University's Center on Global Energy Policy concludes that BAAJA's large-load provisions would not address higher wholesale capacity and energy prices. The paper identifies those increases as a principal channel through which data centers raise household bills in restructured markets such as PJM.
What the cost estimates cover
Grid Strategies estimates that the proposed transmission pricing would result in about $55 billion in data center charges over a decade: $35 billion for embedded costs and $20 billion for incremental costs. That averages roughly $5.5 billion annually, compared with about $2 billion a year under current policy.
The consulting firm's estimate is not a nationwide total for every data center. It assumes firm transmission service for 40.3 gigawatts of new capacity and excludes Texas' ERCOT market. Facilities operating entirely off grid would not incur those charges.
Household savings estimates concern the broader bill. Rhodium Group's modeling of the introduced legislation, excluding its permit-certainty provisions, projects average household electricity bills in 2040 would be $50 to $78 lower than without the legislation.
The Columbia paper also describes potential benefits from transmission and interconnection reforms similar to BAAJA's. Compared with business as usual, those reforms could enable roughly 100 GW of additional wind, solar and battery storage capacity, along with 38 GW of additional interregional transmission capacity, by 2035. Across the modeled regions, grid costs would fall by about $7 billion that year, with savings rising to $13 billion in a high-natural-gas-price scenario.
Industry concerns about going off grid
Jeff Dennis, executive director of the Electricity Customer Alliance, warned against setting costs so high that data centers choose to build off grid, an outcome he said could hurt other customers. Nidhi Thakar of the Clean Energy Buyers Association said the details would be resolved through FERC rulemaking.
On-site generation has its own costs. The Columbia white paper cites an analysis putting the five-year sustained cost of on-site gas generation for data centers at $101 to $107 per megawatt-hour, compared with an average U.S. industrial electricity price of $86 per megawatt-hour. The paper also notes that about 40 GW of behind-the-meter gas capacity is expected by 2028.
Tyler Ochs of Ice Miller told Bisnow that the largest companies have learned to navigate this environment, while smaller developers, new entrants and regional operators in states lacking large-load tariffs could face greater difficulty.
Industry groups have taken different positions. The Data Center Coalition has withheld endorsement while reviewing the bill with its members. The American Public Power Association and National Rural Electric Cooperative Association have jointly backed it. Josh Freed of Third Way argues that it establishes a new standard for data center accountability.
Market access and utility reporting
Beyond the grid-cost provisions, Section 2108 would give aggregations of qualifying behind-the-meter resources, including batteries, fuel cells and generators, access to wholesale energy, capacity and ancillary services markets, according to Foley Hoag.
That requirement would begin 18 months after enactment, but only in markets operated by regional transmission organizations or independent system operators. Data centers outside RTO and ISO territories, including much of the Southeast and West, would not receive the same benefit.
Section 2114 addresses utility data collection. It would require the Energy Information Administration to add load from "data center entities" to its Form 861 utility survey. EIA would have to revise the form no later than 90 days before the first April 1 following enactment; the provision directs the agency to change the survey rather than directly placing a new reporting obligation on data center owners.
Passage remains uncertain
Introduced Sept. 30, 2026, as S. 5653, BAAJA contains seven titles across two divisions. Columbia's Center on Global Energy Policy describes it as the most comprehensive federal permitting-reform effort in years.
Monday's vote invoked cloture on taking up the bill, clearing a filibuster hurdle rather than approving the legislation itself. Twenty-two Democrats voted with Republicans. Sen. Ben Ray Luján (D-N.M.) voted no, and sponsors had submitted a substitute amendment before the vote. The White House had formally endorsed the measure.
That endorsement did not settle the administration's position on every provision. President Donald Trump told reporters that negotiations were incomplete and that he would not approve wind turbines. Sen. Angus King (I-Maine) said the comments weakened his confidence in the administration's good faith and would affect his vote. Sen. Adam Schiff (D-Calif.) said afterward that he would not support the bill.
Opposition also extends to the House and tribal organizations. House Minority Leader Hakeem Jeffries (D-N.Y.) told Politico on Nov. 5 that he opposed the current version, while Luján said he could not support advancing it in its present form. According to Earthjustice, the National Congress of American Indians, Native American Rights Fund and National Association of Tribal Historic Preservation Officers urged Congress to reject the National Historic Preservation Act title. NCAI President Mark Macarro told High Country News that without dramatic changes, the bill should be killed.
The text has already changed. The Albuquerque Journal reported that amendments removed a provision allowing data centers to connect power plants to sell electricity to the grid.
Analysts remain skeptical about enactment during the lame-duck session. Rapidan Energy Group lowered its estimate of passage odds from 30% before the election to 20% to 25%; TD Cowen cut its estimate from 40% to 25%. Jefferies Equity Research judged the substitute more defensible politically and legally, but identified limited time and the lack of a credible House route as the main constraints. It also cautioned that an unsuccessful bill would not automatically carry over to the next Congress.
The Senate still must adopt the substitute and pass the legislation. The House would then have to approve that version or reach an agreement that both chambers can pass before the 119th Congress expires on Jan. 3, 2027. The bill would also need the president's signature to become law.
