About a month ago, the Senate Environment and Public Works (EPW) and Energy and Natural Resources (ENR) Committees unveiled the Bipartisan American Affordability and Jobs Act (BAAJA). The permitting framework in place, established more than 50 years ago, has morphed into a complicated and obstructionist bureaucracy; it is difficult to build anything in America. Reform is desperately needed.
Permitting is comprised of multiple statutes that operate as an interlocking compliance system. Each statute imposes its own mandatory requirements. The result is a layered, overlapping workflow where the environmental review process involves numerous statutes prescribing specific obligations; this complicates and slows down potential projects. A permit cannot be issued until every statute’s requirements are satisfied. Therefore, if one or more are delayed, the entire project is in jeopardy.
BAAJA is a comprehensive permitting bill packed with significant changes. Much of it is quite favorable and will vastly improve the process. Some aspects are concerning.
National Environmental Policy Act
Some of the biggest changes involve the National Environmental Policy Act (NEPA), the procedural statute that requires federal agencies to consider the environmental effects of major federal actions but does not guarantee a certain outcome. NEPA is the overarching environmental review to which all other statutes feed. It is often used as a weapon to delay projects, which increases costs, scares off potential investors, and potentially kills projects. BAAJA aims to break that cycle.
The bill redefines what projects require NEPA review, exempts categories such as pipeline expansions or repairs in existing corridors, mixed-ownership land drilling, and certain projects utilizing federal loans or grants not directly run by an agency. Under this bill, the number of categorical exclusions would significantly increase.
To prevent using NEPA as a delay, BAAJA establishes strict timelines for environmental reviews, with penalties for agencies that fail to meet them. It additionally limits who and when third parties can challenge reviews: Only those who submitted substantive comments during the process can file a suit within 150-day window (instead of the current 6 years). Courts are also prohibited from halting or vacating permits, except under extenuating circumstances such as imminent and substantial danger to human health or the environment.
Fewer projects enter review; fewer are litigated. With streamlined reviews, shortened timelines, and limitations on litigation, developers gain project certainty and predictability.
Clean Water Act
The Clean Water Act (CWA) is another tool used to deny projects for reasons having little or nothing to do with water quality.
Under BAAJA, the scope of all Section 401 reviews—which apply to projects that may discharge pollutants into U.S. waters—by states and tribes is limited to water quality requirements only. The certification that must be received to obtain the final permit would only be denied if states can prove there is clear and convincing evidence that even with modifications, the project cannot meet the state’s water quality requirements. If developers disagree, they can now challenge a state’s decision in court.
The EPA’s Section 404 veto authority will also be limited, reducing its ability to halt dredge-and-fill projects (which dump dirt, sand, rock, concrete, etc into U.S. waters).
Like NEPA, the statute of limitations on CWA challenges is also significantly curtailed: Opponents must participate in the comment period and file suit within a 150-day timeframe.
These changes tilt the CWA toward predictability and speed for developers and substantially reduce chances of project termination.
National Historic Preservation Act
The National Historic Preservation Act (NHPA) is meant to preserve our heritage, but similar to NEPA, merely requires projects to consider the environmental effects without guaranteeing a specific outcome. Yet the consultation process required with NHPA has become so broad and complex, Senator Mike Lee describes it as a “maze without a map” that has evolved into a point of paralysis for many projects.
BAAJA narrows what counts as a historic property, reduces consultation requirements, expands unilateral federal agency authority, and constrains judicial review. It prescribes strict timelines for consultations and increases federal agency control over determinations. Those who want to pursue legal avenues must demonstrate direct harm and have submitted comments; there is a 150-day window for lawsuit filing.
Streamlining NHPA ensures greater project certainty. The updates cut through red tape, reduce costly construction delays, accelerate transmission connectivity, and establish predictable timelines.
Endangered Species Act
The Endangered Species Act (ESA) establishes protections for fish, wildlife, and plants that are listed as threatened or endangered. Over the years, however, the statute has encountered abuse ranging from litigation and emergency listings to misclassifications and refusals to delist species. ESA-related challenges substantially increase project costs and serve to be a leading cause of project derailment.
BAAJA reforms the ESA by compressing timelines, allowing state delegation, and tightening scientific data standards. The bill reduces consultation deadlines and hands more authority to states to take on certain duties. It sets a clear standard for “best available science” that uses objective, professionally rigorous data without policy bias. BAAJA also establishes a 150-day statute of limitations for claims against biological opinions and a 150-day statute of limitations for claims against all projects that require an environmental review under NEPA.
These changes keep endangered species protected while eliminating bureaucratic bottlenecks that delay critical energy and infrastructure projects.
Data Centers
BAAJA addresses growing concerns surrounding data center energy usage, infrastructure, and cost allocation that many communities fear comes with data center development. Despite lack of evidence that these structures increase electric bills, the legislation aims to alleviate consumer anxieties by requiring data centers to pay the full cost of using existing transmission lines as well as any new infrastructure needed. It prohibits passing incremental grid upgrade or delivery costs onto residential and small-business utility customers.
States are allowed to charge data centers more to lower other customers’ bills. They could also restrict interconnection to only those that most benefit other customers, require data centers to bring their own generation, or limit how much power they draw.
Protecting consumers from potential cost increases gives data centers license to proceed while easing the apprehension of those who share the grid. While the rules would create barriers for small market entrants, the changes represent a step towards compromise.
These Reforms are Positive Changes
The collective reforms of major statutes like NEPA, CWA, NHPA, and ESA improve the permitting process by making federal reviews faster, narrower, more predictable, and less vulnerable to litigation, while still preserving core environmental protections.
The reforms track the unanimous 2025 Supreme Court Seven County decision, writing into statute that NEPA is a procedural framework rather than a vehicle for courts to impose particular environmental outcomes. The case involved a coalition of seven Utah counties seeking to build an 88-mile rail line to transport crude oil. The Surface Transportation Board (STB) approved the project, but the D.C. Circuit Court of Appeals invalidated it arguing the STB failed to adequately study foreseeable upstream oil drilling in Utah and downstream refining on the Gulf Coast.
By codifying that agencies only evaluate direct effects (not hypothetical ones), BAAJA translates Seven County’s limits on expansive environmental review into durable legislative text. NEPA does not require agencies to analyze environmental effects from separate projects. BAAJA’s litigation provisions further reinforce the decision’s core message that NEPA should not serve as a tool to delay projects.
For a process that has gotten bogged down and become a significant burden to builders, investors, and developers, BAAJA brings permitting back to its intentions of balancing industrial and infrastructure development with environmental protection.
BAAJA’s Flaw
One of BAAJA’s shortcomings is the codification of Federal Energy Regulatory Commission (FERC) Order No. 1920 for transmission lines. As Travis Fischer from the Cato Institute explains, the order “socializes the costs of state-level energy mandates, to the detriment of taxpayers and consumers” and endorses state-level restrictions on certain energy sources.
Finalized in 2024, Order No. 1920 expands federal authority for regional electric transmission planning and cost allocation across the U.S. It has been actively challenged and is undergoing judicial review in federal court. BAAJA codifies the order and would allow FERC to issue a permit for transmission lines of at least 230 kilovolts that it finds are consistent with the “public interest.”
By overriding local and state regulatory vetoes, federal mandates could force the construction of massive interstate lines that some state regulators have already deemed unnecessary or uneconomical for their local citizens. Due to geography, wind and solar require significantly more transmission lines—which are among the most capital-intensive aspects of the grid—than other sources. Ratepayers in states with affordable, traditional energy portfolios could be forced to help pay for multi-state transmission lines designed purely to satisfy another state’s aggressive clean energy or renewable portfolio standards. States with (expensive) clean energy policies should not be able to saddle nearby states with those costs.
State regulators have long opposed giving FERC backstop authority over transmission for this very reason. Former FERC Commissioner Mark Christie believes “states need more authority to scrutinize transmission projects…..not less, to protect consumers.”
Where Do We Go From Here?
BAAJA has plenty of great reforms, specifically centered on the various environmental statutes that have mutated into colossal entanglements of endless red tape. The outlined changes will accelerate the process and get projects over the finish line at an increased pace.
The transmission reforms are concerning. That ratepayers could end up subsidizing projects (specifically those they outright rejected) that merely pass through their state borders to satisfy another state’s whims is unfair and misguided. Solar and wind, for instance, are notably more expensive. And states that opt not to include them in their portfolios should not be forced to fund them for those that do.
Congress could strengthen the bill with an amendment that more clearly defines “public interest,” which could be loosely interpreted and/or exploited. Utility companies are objecting to the transmission reforms under BAAJA because they feel it undermines state authority. They hope to see “substantial revisions” to the transmission sections.
But the U.S. is at a crossroads. We face significant energy challenges that include surging demand and an outdated electric grid.
We cannot afford to have projects stalled in a broken permitting system. Consulting firm McKinsey & Company estimates that $1.8 trillion in projects are sitting in the permitting pipeline and are associated with $3 trillion in unrealized economic activity. A project delayed by four to five years can require 20 to 30 percent more capital to deliver the same infrastructure. A National Association of Manufacturers and Foundation for American Innovation survey found that nearly two-thirds of respondents would likely increase U.S. investment with faster and more predictable permitting. Project paralysis has costs.
When infrastructure is sidelined or canceled, consumers pay more. They pay higher electricity rates and gas prices because pipelines are blocked and refineries aren’t built. They pay more for everyday goods because increased energy costs inflate prices on almost every product sold. Prices also increase when developers incur higher capital costs due to permitting delays. And economic growth and prosperity lag when projects sit in regulatory limbo. The status quo is actively undermining affordability and reliability for American families.
The midterm elections have shifted congressional dynamics. Priorities will shift as well. America can’t afford to wait on permitting.
The positive aspects of BAAJA outweigh the negative and Congress should prioritize and seriously consider this legislation.
Kristen Walker is Senior Policy Analyst and Manager for Energy and Transportation with the American Consumer Institute, a nonprofit education and research organization. Follow ACI on X @ConsumerPal.