Daily on Energy: A BAAJA Blast for data centers

The legislation broadly would make it easier and faster to build energy infrastructure projects, highways, and even data centers. As concerns have surged in recent months that the already rapid development of data centers will send electricity bills higher, the Senate included several measures that would be the first federal regulations for data centers. 

The bill, known formally as the Bipartisan American Affordability and Jobs Act, specifically would force data centers and other 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. 

In a section dedicated to data centers alone, the bill would require 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. 

And the rules don’t stop there. 

In a separate section, the bipartisan bill would require data centers to report their energy use to the Department of Energy’s Energy Information Administration. 

Already trouble in the House: As we touched on yesterday, the Senate will not be voting on the permitting package until Congress returns to D.C. after the midterm elections. 

The text released this week is not expected to be the final version, as negotiators are using a managers’ amendment to tweak the language and add additional provisions as they take it up for consideration. 

Once passed in the Senate, the bill will go to the House. While several Democrats have expressed support for the package, tensions are already brewing. 

Yesterday evening, Rep. Jared Huffman of California said he wants to push permitting to the next Congress, when Democrats are likely to be in control of the House. Huffman currently sits as the ranking member of the Natural Resources Committee, and would be selected as chair if Democrats regain the chamber. 

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. 

All the rest:

SOUTH KOREA PUMPS THE BRAKES ON TRUMP’S LNG PIPELINE PROJECT: South Korea said its investment in a liquefied natural gas pipeline project in Alaska is not a done deal. 

President Donald Trump yesterday announced that South Korea would invest over $50 billion for a liquefied natural gas pipeline in Alaska. 

But Industry Minister Kim Jung-kwan at a press briefing this morning said the two countries had agreed to “initiate a review” of the pipeline deal. Kim also noted that South Korea did not agree to a specific dollar amount. 

“Putting out figures, or using definitive language, goes far beyond what was agreed,” he said. 

South Korean President Lee Jae Myung also said on X that several conditions must be met before the country participates in the project, including that it must be commercially viable and comply with Korean legal procedures. 

White House spokesperson Taylor Rogers said in a statement that the project would create thousands of jobs, generating $25 billion in state and local revenue while also saving $10 billion in energy costs for Alaska.  

The 800-mile pipeline project is expected to start in Prudhoe Bay along the Arctic Ocean. The pipeline would make it easier for the U.S. to ship LNG to buyers in Asia. 

U.S. TELLS GERMANY AND FRANCE TO DRAW ON DIESEL INVENTORIES OR FACE EXPORT BAN: Reuters is reporting that the Trump administration is pressuring Germany and France to use their own emergency diesel inventories to lower surging prices, or be hit with an export ban. 

While the European Union is meeting later this week to discuss the releasing diesel stocks, the administration is reportedly upset primarily with France and Germany. 

U.S. officials reportedly believe the two countries have not fully followed through on past commitments to release reserves, according to the outlet. 

As of today, the national average price of diesel was $6.3895 a gallon, up by nearly $3 compared to one year ago, according to AAA. 

STATES SUE EPA OVER POWER PLANT RULE: A coalition of 25 states and cities, led by New York’s attorney general, has filed a lawsuit against the Environmental Protection Agency’s repeal of the 2024 emission standards for fossil fuel power plants. 

The group filed in the U.S. Court of Appeals ‌for the D.C. ⁠Circuit today to strike down the agency’s final rule. Environmental and health groups also sued the administration last month for repealing the set of standards finalized during the Biden administration. 

As a reminder, the rolled-back standards would have required new and existing plants to reduce carbon pollution by installing carbon capture, sequestration, and storage technology.

Read more by Maydeen here. 

OHIO CUTS GAS TAXES: Ohio Gov. Mike DeWine signed a measure today that would suspend the state’s gas tax for 90 days in an effort to lower fuel costs. 

The ban would temporarily suspend the state’s 38 cent gas tax and 47 cent diesel tax. Ohio joins a list of states that have been taking their own action to lower record-high diesel prices. 

As we noted earlier this week, Georgia has also suspended its fuel tax for 30 days to help lower fuel prices. 

Other states have waived restrictions or penalties on the use of dyed diesel, which are generally not subject to federal taxes. 

Those states include: Texas, Oklahoma, Arkansas, Missouri, Alabama, Nebraska and Louisiana.

SENATORS DROP NEW DATA CENTER BILLS: Republican Sen. John Curtis of Utah and Democratic Sen. Lisa Blunt Rochester of Delaware released two data center bills meant to provide people with greater transparency. 

Politico reported that one of the bills would create a program within the Energy Department to provide the public with access to technical expertise on the costs and benefits of proposed projects. 

The second bill would require federal reporting on the environmental impacts of data centers that consume at least 50 megawatts. 

CANADA TO FAST-TRACK EXPORT OIL PIPELINE: Canada plans to fast-track the approval for a new oil export pipeline to its west coast. 

Canadian Prime Minister Mark Carney announced today that Ottawa would officially list the Pacific Link pipeline as a project of national interest, allowing it to proceed through a single federal regulatory review process. It is expected to complete the review process by September 2027. 

The pipeline would provide another route to Asian buyers, moving 1 million barrels of crude oil per day. It could prop up Canada as a major global energy supplier, as Asian buyers look outside of the Middle East to purchase oil. 

ICYMI – NEWSOM SIGNS NUCLEAR AND FUSION BILLS INTO LAW: California Gov. Gavin Newsom signed legislation yesterday to accelerate the development of fusion energy and nuclear power in the state, marking a significant step for reintroducing nuclear in California. 

The bills signed into law are primarily focused on building out fusion energy, ordering the creation of a strategic plan to develop fusion, and expanding the number of opportunities for fusion research in the state.  

One bill, that we’ve touched on before in Daily on Energy, aims to set a pathway for California to lift its longstanding moratorium on new nuclear energy. 

The bill would require the State Energy Resources Conservation and Development Commission to prepare a study on the role of advanced nuclear technologies for supporting critical infrastructure, meeting electricity demands, and achieving the state’s ambitious goal of achieving net-zero emissions by 2045.

Key quote: “Nuclear energy is the United States’ largest source of clean power, supplying nearly 20% of the nation’s electricity while avoiding over 470 million metric tons of carbon dioxide emissions,” said Democratic Assemblymember Lisa Calderon, who first introduced the nuclear bill in February. “Fifty years ago, California made a choice based on the technologies and needs of that era. Today, we face an entirely different reality. Our grid needs firm clean power.”

RUNDOWN

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