Senate weighs data center bill

A major conflict has emerged in the US Senate over a new energy bill that aims to speed up power plant construction while making data center operators pay for grid upgrades. The legislation is the first major test of how Congress will handle public anger over data centers and rising electricity bills, a topic that helped drive a landslide Democratic victory in last week's elections.

The Bipartisan American Affordability and Jobs Act, or BAAJA, is scheduled for Senate debate on Monday, Nov. 9. Investment firm TD Cowen estimates the bill has a 25% chance of passing, down from 40% before the election. The drop reflects growing skepticism from Democrats who campaigned on rein in data center expansion.

Senator Sheldon Whitehouse, the top Democrat on the Senate's environment committee and one of the bill's authors, defended the measure. He told Reuters that Democrats ran on affordability and data center accountability, and that BAAJA allows them to deliver on those promises immediately. "We'd be silly not to take this win," Whitehouse said.

President Donald Trump endorsed the bill on Sunday in a social media post. He urged the Senate to pass it, warning that China would take any data center the US did not want and pay a lot of money for it. Trump highlighted the data center provisions as a key part of the legislation.

Opposition comes from multiple sides. Environmental and tribal groups argue the bill weakens environmental reviews and undermines tribal sovereignty. Bill McKibben, an author and environmentalist, called it ironic that Congress's first action after an election defined by opposition to data centers would be to make it easier to build them. The Sierra Club said a package of amendments unveiled on Saturday would not resolve their objections.

House Democratic Leader Hakeem Jeffries, who is expected to become speaker next year, told Politico on Friday that the bill falls short on environmental protections. He said it needs input from House Democrats. Senator Ron Wyden of Oregon said Democrats should use their post-election leverage to negotiate a different approach that reduces red tape without political interference.

Industry group Rhodium Group estimates the bill's transmission reforms could reduce greenhouse-gas emissions from data center operations by 31% to 90%. The Data Center Coalition, an industry trade group, has not endorsed the bill. ING, an investment bank, said sweeping federal legislation to rein in data center construction remains unlikely while Trump is in office, citing his view that they are essential for competing with China.