Permitting bill emerges as Congress' first test of how to tackle data center fury

A major bipartisan energy bill has unexpectedly become US Congress' initial test in addressing voter frustration over data centers and rising electricity costs, an issue that helped propel Democrats to a sweeping election victory last week.The proposed legislation, developed over several years and scheduled to come before the Senate for debate on Monday, would fast-track approvals for new power plants and transmission lines. At the same time, it requires major data center operators to pay a larger share of the grid upgrades necessary to support their operations.Supporters argue the measure represents Congress' best immediate opportunity to manage the expenses tied to expanding artificial intelligence infrastructure. However, some Democrats—who campaigned on pledges to curb data centers and will control both chambers of Congress next year—remain skeptical of provisions they worry could encourage further construction.Investment firm TD Cowen estimated that the probability of the bill passing—officially named the Bipartisan American Affordability and Jobs Act—has dropped to 25% from 40% prior to the election.A protest against AI data center expansion in Imperial, California on July 18, 2026 (AFP via Getty Images)Even so, the legislative battle could help shape the broader debate, with Democrats expected to introduce a series of bills targeting AI and data center development when they take control of Congress next year. Apprehension over increased scrutiny of AI contributed to a sharp selloff in technology shares last week."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," US Senator Sheldon Whitehouse, the top Democrat on the Senate's environment committee and one of the bill's authors, told Reuters."We'd be silly not to take this win."The measure also establishes safeguards designed to prevent residential households, local businesses, and standard utility customers from taking on the financial burden 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. "Those are policies where Republicans and Democrats agree."President Donald Trump, who has endorsed the legislation, highlighted its data center provisions in a social media post on Sunday while encouraging 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 measure. Representatives for the organization did not immediately respond to requests for comment.Passage remains uncertainBAAJA's passage remains far from certain. The bill faces opposition from environmental and tribal groups who argue that it weakens environmental oversight and compromises 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.The bill's sponsors released a package of proposed amendments on Saturday intended to address some of those concerns, but several environmental organizations, including the Sierra Club, stated the modifications do not resolve their objections.Concerns have also been raised by Democrats within Congress, including House Democratic Leader Hakeem Jeffries, who is expected to become speaker next year. Jeffries told Politico on Friday that the bill falls short regarding environmental protections and requires input from House Democrats.TD Cowen noted that the Democrats' decisive election victory "likely emboldens voices arguing the bill gives ⁠too many concessions to (oil and gas)."Senator Ron Wyden, a Democrat from Oregon, urged his party on Friday to leverage its position following the election to negotiate a different strategy."Democrats have a unique opportunity to negotiate a deal that will reduce red tape for all new energy projects to bring down Americans' energy costs without substantial risk of political interference," Wyden said in a statement.A new Amazon Web Services data center on August 26, 2026 in Sterling, Virginia (Getty)Some evaluations suggest the bill could also assist in curbing emissions connected to data center activity.Research from the Rhodium Group indicates that BAAJA's transmission and permitting updates could allow more data center power demand to be met via an increasingly clean electric grid rather than dedicated gas-fired facilities, reducing associated greenhouse-gas emissions by 31% to 90%, depending on the power mix.Meanwhile, investment bank ING suggested that broad federal legislation to restrict data center construction remains unlikely while Trump is in office, given that he and his administration view the facilities as vital for US competition with China.ING also pointed to ongoing disagreements over how much regulatory authority should remain with individual states versus Washington.Joseph Majkut, who directs the energy security and climate program at the Center for Strategic and International Studies think tank, noted the bill's importance for utility affordability and managing data center expansion. "The provisions on data center costs might save the bill," he said.