A bipartisan group of senators have clinched a deal aimed at speeding up the federal permitting process for major energy projects, including renewables, fossil fuels and transmission lines.
The package announced today by Sens. Shelley Moore Capito (R-W.V.), Martin Heinrich (D-N.M.), Mike Lee (R-Utah), and Sheldon Whitehouse (D-R.I.) marked a major breakthrough after months of negotiations that came in fits and starts.
But it’s unclear whether Congress will pass a bill anytime soon, especially because President Donald Trump’s position on advancing federal permits for solar and wind projects remains unclear, according to Sen. Whitehouse, speaking at a press conference Wednesday. The “question of returning to regular order” by the Trump administration is unresolved, he said, referring to policies by the Interior Department and Pentagon that have effectively blocked renewable energy permits from advancing and put more than 100 gigawatts of renewable energy projects at risk, analysts estimated earlier this year.
“We need more clarity on that, and when we have more clarity on that, they’ll be back and forth to try to resolve those issues. That will happen in parallel with the amendment work,” Whitehouse said.
Senate Democrats for months have said their support of a permitting reform package is contingent on Trump ending the blockade, as well as securing provisions that stop future administrations from doing the same for any kind of generation, whether that’s renewables or fossil fuels. The deal announced Wednesday includes such language, according to a summary shared with Latitude Media.
The White House had its own demands, including that elements of its voluntary ratepayer protection pledge for data center developers make it into the permitting deal. The legislation would require companies to pay for all of the transmission and generation costs related to serving data centers. (While a separate but similar ratepayer protection bill made it past the House earlier this month, Democrats in the Senate are reportedly planning to tank it, per Politico; Minority Leader Chuck Schumer of New York said on the floor that the bill is “toothless.”)
The permitting bill has a long road ahead. Senate negotiators agreed to wait until after the November midterm elections to tee up a vote. That sets up a similar scenario to 2024, the last time there was a bipartisan permitting reform deal, which came together after nearly two years of negotiations but ultimately went nowhere after Trump was elected and Republicans gained control of the Senate.
These political calculations by both parties, as well as some industry opposition, have long stood in the way of permitting reform even though there’s widespread agreement that the U.S. needs to rapidly build new energy generation to meet record load growth from data centers and reshored manufacturing. Looming capacity shortfalls in certain parts of the country also risk greater blackouts, particularly during peak electricity demands, and more extreme weather demands greater investment in projects that boost resilience.
Can transmission reforms get broad buy-in?
The permitting deal eases federal review requirements for energy projects including renewables and fossil fuels, as well as storage, mining, and pipelines; the senators emphasized in the press conference that “this is good for everyone.” It also addresses one of the biggest bottlenecks to adding new generation and large customers like data centers to the grid: the slow pace of building transmission infrastructure.
The legislation would rewrite a section of the Federal Power Act, giving the Federal Energy Regulatory Commission greater authority to approve permits for major interstate power lines — also known as its “backstop” siting authority — when state regulators stall or reject a project. That backstop authority would apply to projects deemed in the national interest because they meet certain requirements, such as carrying large amounts of electricity, protecting consumers, and improving reliability. The bill also would codify the benefits that FERC can factor into cost allocation formulas for transmission lines.
Furthermore, it’s designed to speed the review process by allowing the commission to start reviewing permit applications for certain large transmission lines simultaneously alongside state processes, instead of waiting for states to stall or reject projects before starting the federal review. The legislation also would strengthen FERC’s oversight of utilities’ transmission planning.
It’s unclear whether the deal has buy-in from groups representing utilities and state regulators. Changes to transmission policy are notoriously controversial, often becoming a fight over federal versus state authority and whether the customers who pay for billion-dollar projects are reaping enough benefits. Plus, for some vertically integrated utilities that own both fossil-fuel generation and power lines, an interregional transmission line carrying cheaper renewable power into their territory threatens the economics of their power plants.
In 2024, the utility trade group Edison Electric Institute didn’t take a position on the deal struck by former Sens. Joe Manchin (D-W.V.) and John Barrasso (R-Wyo.) The National Rural Electric Cooperative Association was opposed.
Other changes
Beyond changes to FERC’s authority, the bill unveiled today also aims to make more efficient use of existing poles and wires by encouraging the adoption of grid-enhancing technologies and directs wholesale electricity markets to bring in distributed generation and virtual power plants.
Senate Republicans also got many of their priorities into the bill — namely stricter timelines for environmental reviews and litigation.
If it becomes law, it would impose one-to-two year deadlines for reviews required under the National Environmental Policy Act reviews, with “consequences” for agencies that miss them, according to the summary. And legal challenges to NEPA, the Clean Water Act, Endangered Species Act, and the National Historic Preservation Act permits would need to be filed within 150 days.
