Republicans and Democrats in the Senate are hopeful that a 417-page bill introduced this week will be exactly what the country needs to build power lines, pipelines, highways, and other essential infrastructure faster than ever before.
The legislation, dubbed the Bipartisan American Affordability and Jobs Act, was introduced on Wednesday by a bipartisan group of senators, who said the bill would make it easier to build in the United States. without sacrificing protections to the environment.
The draft bill aimed at reforming the federal permitting process was months in the making, with both parties being forced to make concessions to get their colleagues across the aisle to agree to a deal.
The Senate is not scheduled to vote on the legislative bill until after the November midterm elections, and it will be subject to various amendments and changes to the text.
As it stands, however, the lengthy legislation covers sweeping territory from reforming bedrock environmental laws to establishing new permitting processes for some energy projects, and providing permit certainty for those already under construction.
So, what exactly is in the BAAJA?
Reforming NEPA
The crux of the permitting reform bill unveiled this week is to reform the National Environmental Policy Act, a 55-year-old law that requires federal agencies to evaluate the environmental effects of major actions and decisions relevant to their departments, such as issuing permits and licenses for large projects.
Lawmakers across the aisle have said the law causes decades of additional red tape and legal delays, specifically through its judicial review requirements. Under BAAJA, the deadline for legally challenging an environmental review for projects is set to just 150 days.
Shrinking judicial review marks a major win for Republicans, who have repeatedly attempted to restrict environmental groups’ ability to use the courts to block the development of fossil fuel projects such as natural gas pipelines.
The law would also narrow the circumstances that trigger an environmental review, such as by exempting projects associated with repairing, restoring, or replacing lifeline infrastructure, such as transmission lines, phone lines, and pipelines.
It would also bar federal agencies from delaying the issuance of an environmental review to wait for new scientific and technical research.
The law does also include new requirements under NEPA, mandating that project developers submit stakeholder engagement reports, not exceeding 20 pages, with their permit applications. It also codifies comment periods of 45 to 60 days.
Other environmental laws affected
In addition to NEPA, the BAAJA would reform several measures of the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.
Specifically, it would limit states’ ability to block federally permitted projects that may discharge in their waters, narrowing part of the CWA.
If the legislation passes, the CWA would only allow a state to deny a project if it had “clear and convincing evidence” that the project could not be modified to meet water-quality standards. Additionally, reviews under the CWA would be restricted to discharges into the waters under federal jurisdiction.
As for endangered species, the Senate bill would give states more authority in consultations reviewing a project’s impact on imperiled species and critical habitats. It would also cut consultation periods from 90 days to 60 days and impose a 150-day statute of limitations for legal challenges.
The NHPA, which requires the analysis of a project’s effect on historic properties, would also be narrowed. The bill would specifically require analyzed effects to be “reasonably foreseeable,” essentially barring reviews from including downstream effects.
For example, if a pipeline were to undergo an NHPA review, agencies would be required to focus only on the effect of the actual construction, not including the transport of oil or gas through the pipeline, or emissions associated with those operations.
Modernization of the permitting system
Not only would the bill aim to accelerate permitting through existing laws, but it would also call for the modernization of the entire federal system.
This includes issuing new data standards and automated systems, allowing federal agencies to share permitting data with one other and move paper-based reviews and applications online.
This also aims to increase public transparency by establishing an online permitting database.
This database, called “The Environmental Review and Permitting Tracker,” would track the status of federal reviews and include searchable features for project developers.
Building out more transmission
One top priority for Democratic negotiators was to include provisions that would make it easier to construct and upgrade transmission infrastructure. This would allow thousands of gigawatts worth of solar, storage, and wind capacity to connect to the broader electric grid.
As written, the BAAJA would give the Federal Energy Regulatory Commission more authority to approve interstate power lines, as well as process applications concurrently with a state review.
If a state fails to approve a transmission line within one year, FERC would then be granted the authority to step in and approve the project if it is deemed to have “national interest.”
Additionally, FERC would be able to mandate that only the customers who receive benefits of a transmission would be required to cover the costs.
It would also require regular transmission planning every three years and ban the first right of refusal. This would essentially block utilities from having the automatic right of first refusal to build a transmission line in a region, forcing competitive bidding.
Cracking down on data centers
While the BAAJA would make it easier to build data centers, it would also force the large-load facilities to pay for the energy and transmission infrastructure needed for their operations.
The legislation orders utilities to ensure that transmission costs are fully assigned to these large load operators to “minimize or avoid cost burden on other customers.”
It would also require that these large facilities incur the “full cost” of the transmission services they require and mandate that no incremental costs are passed on to other customers.
Data centers must also provide utilities with financial assurances or contributions sufficient to cover the cost of the project before construction on a generating, transmission, or distribution facility begins.
Additionally, the bipartisan bill would require data centers to report their energy use to the Department of Energy’s Energy Information Administration.
Providing project certainty
One of the most highly anticipated provisions included in the bill would provide certainty that already-permitted projects would not be at risk of losing their approvals.
These provisions mark a major win for Democrats, who had long hesitated to give their full support for the deal without certainty that permits for wind and solar projects would not be revoked by the Trump administration.
With few exceptions, the BAAJA would block federal agencies from revoking approvals for projects with permits in effect on or after Sept. 16 of this year. It would also bar the agencies from taking any other action to interfere with or prevent construction or operations.
It would also order agencies to avoid unreasonable delays and treat all applications fairly and efficiently.
Democratic negotiators did say on Wednesday they are still seeking more clarification from the administration on the fair treatment of renewable energy projects that have faced the ire of President Donald Trump over the last year and a half.
Other notable provisions
Broadly, the bill sets strict deadlines for issuing environmental reviews, permit applications, cost recovery agreements, and more.
It also includes several provisions focused on specific energy resources, including geothermal. If passed as written, the bill would exempt geothermal wells not located on federal land from federal permits, and NEPA reviews, when the government owns less than half of the subsurface geothermal estate and the operator holds a state permit.
The legislation also would establish a new permitting pathway for micro hydrokinetic energy projects, which small hydropower projects with a capacity of 5 megawatts or less. Under the new pathway, these projects would be able to secure permits of between 10 and 20 years.
What happens next?
The Senate plans to vote on the permitting legislation when it returns following the November midterm elections.
Once passed in the Senate, the bill will go to the House. While several Democrats have expressed support for the legislation, tensions are already brewing.
Not long after the bill was released, Rep. Jared Huffman (D-CA) said he wants to push permitting to the next Congress, when Democrats are likely to control the House. Huffman currently sits as the ranking member of the Natural Resources Committee, and would likely be selected as chairman if Democrats regain the chamber.
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He claimed the Senate version “concedes too much,” specifically regarding the Endangered Species Act.
“Folding our hand now or in the lame duck makes no sense when we can keep working on this and, in a few more months, have a much better deal that works for everyone,” Huffman said.