A bipartisan group of senators recently introduced the Bipartisan American Affordability and Jobs Act of 2026, a permitting reform package that followed months of negotiations and prior unsuccessful efforts to reach a bipartisan agreement. Although much of the bill focuses on federal environmental review and permitting for energy infrastructure projects, it also includes several provisions of particular interest to developers of data centers and cryptocurrency mining operations. The discussion below reflects the bill’s proposed language. While the legislation was introduced on September 30, public reports indicate congressional action on the legislation is unlikely before the November 2026 midterm elections.
Among its provisions, Section 2107 of the bill would create a new federal framework governing the electric-service costs of data centers, cryptocurrency mining operations and other high-density computing facilities. Titled “Ratepayer Protection,” the provision is intended to prevent the costs of serving large computational loads from being shifted to other electric customers. If enacted, it could materially affect project economics, interconnection strategy, power procurement, financial assurance and long-term exit liability for new facilities.
Which Projects Would Be Covered?
The proposed protections would apply principally to a “covered load,” defined as electric demand attributable to one or more data centers or high-density computing facilities at a single site, or at multiple sites under common ownership or control, that equals or exceeds 20 megawatts. A phased project would be covered if it is reasonably expected to reach 20 megawatts at full buildout.
The definition expressly includes facilities primarily used for artificial intelligence training or inference, cloud computing, data hosting, cryptocurrency mining and other distributed-ledger or digital-asset computation. Computing or data-storage equipment that is merely ancillary to a facility devoted primarily to another commercial or industrial activity would be excluded.
FERC Would Establish a New Cost-Recovery Floor
Section 2107 would not amend the text of Sections 205 and 206 of the Federal Power Act. Instead, it would direct how the Federal Energy Regulatory Commission applies the requirement in those sections that wholesale transmission rates and practices be just, reasonable and not unduly discriminatory or preferential. The bill’s findings state Congress’s view that rates recovering less than the embedded and incremental expansion costs of transmission service associated with computational loads are not just and reasonable. The provisions described below would direct FERC to revise its pricing policy and issue a rule consistent with that finding.
Within 270 days after enactment, FERC would have to revise its 1994 transmission-pricing policy to require recovery of both amounts from eligible customers seeking service on behalf of computational-load owners or operators. Incremental-cost payments would be credited against the utility’s annual transmission revenue requirement to prevent double recovery from other customers.
The revised policy also would have to provide a lower-cost option for computational loads electing non-firm transmission service. Such service generally uses capacity when available and may be curtailed during system constraints or for higher-priority service. It may suit facilities able to shift workloads, reduce demand, or rely on onsite generation or storage. Section 2107 would require FERC to revise its 1994 transmission-pricing policy and undertake a formal rulemaking to implement the new transmission-pricing requirements applicable to computational loads.
FERC would then have 270 days to propose implementing rules requiring conforming transmission rates and standardized analyses of necessary upgrades and cost-reduction options, followed by a final rule within one year.
Covered Loads Would Bear Full Incremental Costs and Continuing Exit Liability
Section 2107 also would add a new Section 228 to Part II of the Federal Power Act. It would bar allocation of a covered load’s incremental cost to other customers. “Incremental cost” broadly includes costs that would have been avoided absent the load, including associated generation, storage, transmission and distribution facilities.
The covered load would remain responsible until those costs are fully recovered, even if it terminates its contract or stops purchasing electricity. Before constructing or upgrading facilities needed to serve the load, a utility would have to obtain sufficient financial assurance or contributions, with credits for amounts paid to another public utility or transmission organization for the same work.
States Could Impose Above-Cost Rates and Allocate Access Competitively
For retail electric service, a state could charge covered loads more than both embedded average cost and incremental cost, then apply the excess to rebates or reductions in the utility costs used to calculate other customers’ rates.
States also could place covered loads in a separate, less favorable service class. Where capacity is limited, a state could allocate interconnection or retail-service opportunities through an open season or competitive solicitation based on the greatest present-value benefit to other ratepayers, rather than application order or queue position.
A state also could condition service on project-backed generation sufficient to meet the load or require a service category limiting when or how much power may be withdrawn. Supply, storage, demand flexibility and curtailment capability could therefore affect both regulatory approval and commercial competitiveness.
New York Is Already Moving in the Same Direction
For New York State projects, Section 2107 would overlay an already changing state landscape. Governor Kathy Hochul’s Executive Order No. 62 temporarily pauses certain state environmental approvals for data centers with peak demand of 50 MW or more while the New York State Department of Public Service prepares a Generic Environmental Impact Statement and develops standards addressing energy, infrastructure, environmental and community impacts. The order also reflects the State’s policy that large loads should pay their fair share of system upgrades or supply their own power. Our prior Legal Alert, “NY Governor Hochul Establishes First-in-the-Nation Data Center Moratorium,” discusses the moratorium and related New York proceedings in greater detail.
What Data Center and Cryptocurrency Developers Should Consider
- Revisit project economics. Model project-specific generation, storage, transmission and distribution costs, credit support and potential post-operation payments.
- Evaluate structure and phasing. Common ownership or control may aggregate separate sites or phases toward the 20-MW threshold.
- Assess flexibility. Non-firm service, workload shifting, onsite generation, storage and demand response may reduce costs but create operational constraints.
- Develop a ratepayer-benefit case. Projects may need to offer benefits beyond paying incremental costs, particularly in a competitive solicitation.
- Negotiate protections. Address cost causation, estimates, true-ups, duplicate credits, upgrade ownership, security release, curtailment, assignment and post-termination liability.
Prospective Application Leaves Important Questions
The new cost-allocation and state-authority provisions would apply to covered loads that “interconnect” on or after enactment, while arrangements previously approved by FERC or a state would remain in effect. Because the proposal does not define “interconnect,” uncertainty remains for projects in the queue or under agreement or construction but not yet energized.
Section 2107 remains proposed legislation, and its effect would depend on final statutory language, FERC implementation, utility tariff filings and state action. Still, it signals a significant potential shift in how the costs and risks of large computational loads are allocated.
Harris Beach Murtha’s Energy Industry Team will continue monitoring the Bipartisan American Affordability and Jobs Act of 2026 and related federal and state developments affecting data centers, cryptocurrency miners and other large-load customers. If you have questions about how Section 2107 may affect a proposed or existing project, please contact attorney Javid Alfazi at (518) 701-2775 and jafzali@harrisbeachmurtha.com; attorney Joshua Schneider at (518) 701-2744 and jschneider@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
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