Balls and Strikes on BAAJA

Authors: Austin Gae, Policy Analyst; Kevin Dayaratna, Ph.D., Vice President

Plymouth Institute for Free Enterprise · Institute for Statistical Policy Analysis

TOPLINE: The Bipartisan American Affordability and Jobs Act (BAAJA, S. 5653) makes federal permitting faster, simpler, and more reliable: long-sought conservative reforms that are essential for abundant energy and a strong America. The Senate’s recent substitute amendment streamlines nuclear licensing hearings, but expands federal authority over data center energy cost allocation and restores union bargaining at federal power marketing administrations. Read on for our analysis of some of the permitting package's numerous provisions.

Conservative Victories: Faster permits, fewer lawsuits, more reliable power

• Reliable permits. In 2021, the Biden administration revoked the permit for the Keystone XL pipeline while it was under construction, and the Trump administration halted offshore wind projects that were being built. Under BAAJA, a federal agency “shall not take any new action that would revoke, rescind, withdraw, terminate, suspend, vacate, remand, reopen, materially amend, or materially alter a Federal authorization or permit” with a list of exceptions, and the burden of proof is on the federal agency. (Sec. 1401)
• NEPA judicial reform. NEPA litigation can delay projects for years. Under BAAJA, when a court finds a NEPA violation, “the only remedy the court may order to redress that violation is to remand, without vacatur or issuance of an injunction,” with a deadline of no more than 180 days; courts must also give “substantial deference to the agency relating to the scope and contents of an environmental document”; and the bill makes other reforms to NEPA judicial review. (Sec. 1110)
• Clean Water Act reform. Some states, like Washington, have denied Clean Water Act Section 401 certifications for reasons beyond water quality. Under BAAJA, the scope of a certification “shall be limited to ensuring compliance with water quality requirements.” States can deny it only on clear and convincing evidence that no condition ensures water quality compliance or an application remains incomplete after notice, and any condition must be necessary and least burdensome. (Sec. 1202)
• Nuclear energy reforms. BAAJA eliminates the Nuclear Regulatory Commission (NRC) mandatory hearing for uncontested nuclear energy applications and allows at-risk construction of uranium enrichment facilities. (Secs. 1501, 1502)
• Cutting red tape on non-federal land. American businesses and consumers need abundant, affordable oil and gas. Under BAAJA, the federal government “shall not require a permit to drill for an oil and gas lease” if the well sits on non-federal land and the federal government owns less than 50 percent of the oil and gas in the drilling or spacing unit. (Sec. 2211)
• Measuring data center electricity use. No federal agency measures data center electricity use on a regular basis, so policymakers must instead rely on a variety of estimates of questionable accuracy that can change considerably upon revision. Under BAAJA, the Energy Information Administration must revise Form 861 “to separately include information from computational load sites.” Therefore, public and private entities would have consistent data on data center electricity use to better inform forecasts of future demand. (Sec. 2114)

Remaining Challenges: More centralization, higher pay, and union bargaining

• Federal cost mandate for data centers. BAAJA declares it federal policy that data centers “bear the full cost of any electric service that they require” and of any infrastructure built to serve them. FERC’s new transmission rates reach existing data centers, and the 20-megawatt threshold is gone. Large-load tariffs, which 24 states have approved, are intended to place the cost of serving new load on the customers who caused it, but the fundamental issue is energy supply. Consumer-regulated electricity, discussed in AAF’s research, is a better solution. (Sec. 2107)
• Higher federal pay. Power marketing administration salaries are benchmarked to utilities in their region, private utilities included, and the NRC may pay senior executives up to 110 percent of its cap on senior executive pay. (Secs. 2112, 1504)
• Union bargaining restored. Collective bargaining is reinstated for power marketing administration employees “notwithstanding any intervening law, rule, or order to the contrary,” reversing the March 2025 executive order. (Sec. 2112)

CONCLUSION: BAAJA's permitting reforms would make it faster and cheaper to build in America, restoring affordability, improving energy abundance, and creating more American jobs. Conservatives should work to continue improving the bill and deliver a major permitting victory for the country.