The Senate’s 73-25 procedural vote Monday put a sweeping permitting overhaul a step closer to passage. Before lawmakers enact the Bipartisan American Affordability and Jobs Act, they should demand evidence that its promised electricity savings will exceed the costs assigned to customers.
A $22 billion transmission plan in the Midwest shows why that scrutiny matters. Estimates of what customers would gain differ by tens of billions of dollars, depending on who evaluates the benefits. Congress should examine that disagreement before expanding Washington’s authority to send households the bill.
The Bipartisan American Affordability and Jobs Act offers worthwhile ways to shorten permitting delays. Projects deserve timely decisions, and endless procedural uncertainty makes building more expensive. The transmission provisions, however, raise a separate question: What must developers demonstrate before customers can be required to finance their projects?
Under the proposal, the Federal Energy Regulatory Commission would gain much broader authority to approve qualifying interstate lines after a state’s denial or prolonged inaction. The bill would also require cost-allocation filings for eligible facilities even without a federal construction permit. That means the financial provisions deserve scrutiny independent of the siting fight.
The bill directs FERC to match charges to benefits and protects customers receiving no benefit, or only a trivial benefit relative to the proposed costs, from involuntary charges. Those are useful protections. Their practical strength depends on how regulators establish the benefits in the first place.
Regional transmission can connect customers to cheaper supplies and move power when local equipment fails. Some benefits extend beyond the customers who initially request a project. That can justify shared investment. It also makes the allocation harder to test, which is why the forecasts need independent scrutiny before anyone is required to pay.
A forecast of reduced congestion or better reliability can represent real value. But its result depends on expectations about electricity demand, future power plants, fuel prices and available alternatives. Change those assumptions, and the apparent bargain may disappear. Customers need to know whether their assigned share survives a less optimistic forecast.
The relevant figure is the customer’s net result. Access to a cheaper generator is only part of the calculation; the new transmission charge must also be paid. A study can describe substantial savings in power purchases while leaving a household worse off once its share of construction is included.
A developer who must secure voluntary contracts faces a practical test: Will customers commit money to the service? Regulatory cost allocation answers a different question: Will an agency authorize charges based on expected benefits? Congress should recognize how much responsibility that second model places on the people reviewing the forecasts.
Congress already acknowledges the danger of shifting infrastructure costs onto other customers. Section 2107 says data center owners and operators should bear the full cost of infrastructure built to serve them. The same concern should guide the rest of the transmission title: Identify the need, identify the beneficiaries and substantiate their charges.
Congress should keep state siting authority intact. If senators insist on expanding federal control, they should strengthen the financial protections before making state objections easier to override.
Start by requiring an independent market monitor to review claimed benefits before FERC approves a cost allocation. Publish the assumptions, examine plausible changes in demand and generation, and compare the proposed line with less expensive ways to provide the same service. A project should withstand a reasonable range of outcomes.
Then require benefits to be demonstrated for the customers charged. Measurable reliability improvements, congestion relief and lower delivered electricity costs can support a case for investment. Another state’s decision to mandate a particular energy mix should not, by itself, create a financial obligation for households elsewhere.
Finally, require a clear account of who bears the risk if construction costs rise or benefits fall short. Ratepayers should be able to see the exposure before regulators commit them to paying. The review should ask whether a line remains worthwhile if a proposed factory or data center never opens, and what commitments the parties creating that risk are prepared to make.
Congress should make affordability a test that projects must pass before the charges reach somebody else’s electric bill.