A Bill to Make Data Centers Pay for Grid Upgrades is Dividing Democrats as They Gear to Control Congress

The U.S. Senate is set to take a procedural vote Monday on a bipartisan energy permitting bill that would make large data centers pay more of the cost of powering their expansion, marking Congress' first test of how to respond to rising electricity bills and the rapid spread of artificial intelligence data centers after Democrats swept last week's midterm elections.

The Bipartisan American Affordability and Jobs Act would accelerate federal approvals for energy projects and make it easier to build transmission lines across state borders. That pairing has divided Democrats.

Some see a chance to shield households from costs tied to the AI buildout before the party takes control of both chambers in January. Others worry that faster permitting could make it easier to build the same projects voters wanted to slow. Under the proposal, new data centers with electricity demand of at least 20 megawatts would have to cover the additional costs of the infrastructure needed to serve them.

The bill also includes safeguards designed to protect households and businesses from paying for grid investments if a project falls through. Much of the relief would depend on how federal and state regulators put the rules into practice.

Sen. Sheldon Whitehouse of Rhode Island, a Democratic co-author, told Reuters that the bill would let his party act on its promises to tackle energy costs and hold data centers accountable. "We'd be silly not to take this win," he said.

President Donald Trump also backed the measure and urged the Senate on Sunday to pass it, arguing China will take any Data Center that we don't want, and pay ​lots of money for it." The backlash was especially visible in Texas, where Democratic Gov.-elect Gina Hinojosa campaigned on a statewide moratorium on new data center projects.

The election may have made a deal harder to close. Investment firm TD Cowen now puts the chances of passage at 25%, down from 40% before the election, Reuters reported. House Democratic Leader Hakeem Jeffries said that the measure needs stronger environmental protections and more input from House Democrats.

Oregon Democratic Sen. Ron Wyden called for using the party's leverage 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."

The four Senate sponsors released revised text Saturday after hearing from lawmakers, environmental organizations and tribal leaders. Environmental and tribal groups have warned that the legislation would weaken federal reviews and undermine tribal sovereignty. Sen. Martin Heinrich of New Mexico said the revision strengthens tribal consultation, but the Sierra Club said the changes fell short of addressing its objections.

Rhodium Group projected that the original bill could trim the average household's annual electricity bill by $50 to $78 in 2040 compared with leaving current policy in place. The research firm also modeled what would happen if data center electricity demand grew faster than expected.

In those scenarios, meeting the additional demand through the grid produced 31% to 90% less greenhouse gas emissions than relying on dedicated, off-grid gas generators, depending on the power mix.

Monday's vote, scheduled for about 5:30 p.m. EST, requires 60 votes to clear the way for debate. The debate will carry into January, when Democrats plan to introduce legislation on electricity costs linked to data centers, independent safety testing for advanced AI systems, and corporate liability for harms caused by AI.