Senate Permitting Bill Would Make 20 MW Data Centers Pay

On September 30, 2026, Senators Shelley Moore Capito and Sheldon Whitehouse, the chair and ranking member of the Environment and Public Works Committee, and Mike Lee and Martin Heinrich, the chair and ranking member of the Energy and Natural Resources Committee, introduced the Bipartisan American Affordability and Jobs Act of 2026, a 417-page permitting reform bill. Most of it concerns environmental review and energy permitting. The data center language is Section 2107, “Ratepayer protection,” and it works in two ways. Subsection (a) directs the Federal Energy Regulatory Commission, within 270 days of enactment, to revise its 1994 transmission pricing policy statement so that public and transmitting utilities charge transmission customers serving a computational load site both the embedded cost and the incremental cost of that service, with the incremental payments credited back to the utility’s revenue requirement and a lower price for sites that elect non-firm service. A proposed rule follows within 270 days of the revised statement and a final rule within a year after that. A computational load site is one or more buildings at a single location, connected to the bulk power system, that primarily house IT infrastructure for software and services, artificial intelligence training and delivery, cryptocurrency mining or other computing.

Subsection (b) adds a new Section 228 to the Federal Power Act. A covered load is electric load from one or more data centers or high-density computing facilities at a single site, or at multiple sites under common ownership or control, that reaches 20 megawatts, or is reasonably expected to at full buildout if built in phases; computing that is ancillary to some other commercial or industrial use is excluded. No portion of a utility’s incremental cost to serve a covered load may be recovered from any other customer. The rate must keep recovering that cost even if the load terminates its contract or stops buying power first. Before building or upgrading generation, transmission or distribution for a covered load, the utility must require financial assurances or contributions sufficient to cover it. States may charge covered loads more than both embedded average cost and incremental cost and credit the excess to other retail customers, allocate service through an open season or competitive solicitation that favors the greatest present-value benefit to other ratepayers regardless of queue order, require the load to procure new generation, require it to take limited or non-firm transmission, and treat it as a separate, less favored class than other large industrial users. The section applies to covered loads that interconnect on or after enactment; arrangements a state or FERC approved before then remain in effect. Section 2114 separately adds data center load to the Energy Information Administration’s Form 861.

The threshold is the headline for real estate. The House-passed Ratepayer Protection Act, H.R. 9340, reaches sites of 100 megawatts or more and only obliges state commissions to consider a standard; this bill sets a binding federal floor at 20 megawatts, counts sites under common ownership together, and counts phased projects at full buildout. By PSV arithmetic that is one fifth of the House threshold, low enough to reach many colocation and enterprise data centers and campus first phases, not only hyperscale builds. The sponsors’ own descriptions frame it the same way: the Energy and Natural Resources fact sheet says the bill requires data centers to pay for all of their associated transmission costs “rather than relying on a voluntary structure.”

The capital consequence is the open season. A state could stop serving large loads in queue order and instead award capacity to whichever covered load offers other ratepayers the most, with each award stating the firm megawatts and the transmission service category. That turns power from a place in line into a priced bid, and it rewards sites that bring their own generation or accept curtailable service. The timing matters too: by PSV arithmetic the FERC steps run at least 270 plus 270 days plus one year, roughly two and a half years after enactment before a final transmission rule, while Section 228’s cost floor applies to loads interconnecting from enactment.

The tool is a covered-load screen across a portfolio or pipeline. Inputs are each site’s expected peak demand at full buildout, the owner and affiliates that could make sites count together under common control, the executed utility service agreement and the date a state commission or FERC approved it, any construction or upgrade cost the utility has quoted, the posted collateral, and the transmission service the site takes. The output is a one-page flag per site: whether it would be a covered load, whether its arrangement predates enactment, what incremental cost and assurance the utility could require, and whether the site could win an open season with on-site generation or non-firm service.

The reviewer is the development or acquisitions lead with utility counsel, and the approval gate is that the screen never changes a pro forma on its own. It moves a power cost line only after counsel confirms the bill has become law in that form and the site’s utility or state commission has a filed tariff or order implementing it. Until then, the screen is a sensitivity case, not an assumption.