Senate takes up permitting bill that would make AI data centers pay for their power

By James Calloway

The U.S. Senate on Monday is set to hold a procedural vote on bipartisan legislation that would accelerate federal permitting for energy projects — and require data centers to pay for the electricity they consume. It is the chamber's first major action since last week's midterm election, which soundly repudiated President Donald Trump and congressional Republicans.

The stakes for the AI industry are direct. Anger over artificial intelligence data centers and rising electricity prices helped elect a wave of Democrats who pledged to clamp down on the massive, energy-hungry facilities. This bill is Congress's first serious attempt to answer a problem the AI build-out helped create: surging electricity demand facing yearslong delays in getting new generation connected to the grid.

What would the bill actually change?

The legislation would shorten the timeline to start construction on large energy projects — both clean energy and fossil fuel developments — and make sure data centers pay for the energy they use rather than shifting costs onto ordinary ratepayers. Supporters argue the current system traps projects that could lower utility bills in the planning phase for years.

"Americans can't afford to wait for lower electricity prices. We need to pass this bill now," said Sen. Martin Heinrich, a New Mexico Democrat and one of the bill's four lead sponsors.

The bill's core target is the National Environmental Policy Act, enacted in 1970. That law requires federal agencies to consider a project's possible environmental impacts and allows the public to be heard before approval. Supporters of an overhaul say those requirements cause yearslong delays in federal permitting. Critics say the law is what gives communities their say — and weakening it removes their leverage. Both claims deserve scrutiny; neither side has produced a timeline estimate in the materials released so far.

Who is behind it?

The bill's four sponsors lead the chamber's energy and environment panels and negotiated the deal weeks before the election:

• Republican Sen. Shelley Moore Capito of West Virginia
• Republican Sen. Mike Lee of Utah
• Democratic Sen. Martin Heinrich of New Mexico
• Democratic Sen. Sheldon Whitehouse of Rhode Island

On Saturday, the four senators released a detailed set of amendments designed to bolster support for the legislation.

Trump urged senators to vote for the bill, calling it a "BIG WIN for U.S. ENERGY INDEPENDENCE and DOMINANCE" in a social media post on Sunday. The bill will "ensure that we can build Pipelines, Mines, and Power Plants faster than ever before, lowering Energy Costs for American Families," Trump wrote.

Major industry groups representing both clean energy developers and the oil and gas sector also support the bill — an unusual coalition, and one that suggests each side expects to build more under the new rules.

Why is passage uncertain?

The same election that repudiated Trump complicated the bill's math. Democrats' sweeping midterm gains mean some in the party argue they should use their stronger position in the next Congress to pass legislation that delivers needed clean energy while limiting expansion of oil, natural gas and mining.

Some critics say the permitting bill as proposed could lead to a vast increase in exports of liquefied natural gas and facilitate a "reckless" build-out of data centers powered by natural gas — the very facilities the bill's data-center provision purports to discipline.

House Minority Leader Hakeem Jeffries, a New York Democrat expected to become speaker in January, criticized the bill last week. His office said it "falls short" in a number of areas — without specifying which.

What do the amendments address?

The Saturday amendments respond to two clusters of criticism: tribal consultation and environmental review.

Heinrich said he worked to incorporate feedback from tribal leaders on the initial proposal, and the amended version requires federal agencies to consult with tribes on projects affecting important cultural sites. Sponsors also extended the window for objections to agency reports and strengthened opportunities for states to weigh in, Heinrich said.

If passed, Heinrich said, the bill will save households billions on electricity costs, create jobs, cut emissions, and force big corporations to pay their full share for data centers instead of pushing energy costs onto consumers. Those are large claims. No independent analysis supporting the billions in household savings accompanied the announcement, and the sponsors did not specify how the data-center cost allocation would be enforced.

What about the offshore wind buyouts?

One provision directly reverses a signature Trump administration policy. Trump promotes expanding oil, natural gas and coal production and particularly dislikes offshore wind. His administration has been paying energy companies to walk away from offshore wind projects under development — nearly $4 billion in settlements so far, paid to induce developers to relinquish leases.

Whitehouse said the permitting bill would end those buyouts. The administration would no longer be able to use public money to pay clean energy developers to give up wind energy leases and oblige them to invest in fossil fuels instead. That provision converts the bill, in part, into a check on executive spending — assuming it survives the Senate and whatever conference follows.

At a press conference with Heinrich on Monday, Whitehouse framed the legislation as a starting point rather than a ceiling. The bill is "the floor, not the ceiling, of our climate and environmental aspirations. And we look forward to working to accomplish big things with our big Democratic majorities" next year, he said.

Who opposes it, and on what grounds?

The Sierra Club and the National Wildlife Federation strongly opposed the measure in recent days. Their stated concerns are the bill's limits on judicial review and its changes to the National Environmental Policy Act — the two mechanisms, notably, that currently allow communities and environmental groups to slow or challenge projects after approval.

Their opposition cuts to the central trade in the legislation: faster permitting in exchange for narrower avenues of challenge. The bill's sponsors count that as a feature. Opponents count it as the whole problem.

What happens next?

Monday's procedural vote will test whether the bipartisan coalition that negotiated the bill before the election can still hold after it. If Democrats decide their incoming majorities can extract a better deal next Congress, the bill stalls; if it passes, energy developers — and the data-center operators footing their own power bills — get a faster path to construction. For the AI sector, the outcome determines whether the cost of the industry's electricity appetite lands on the companies building the facilities or continues to spread across everyone else's utility bills.