Will the Senate's BAAJA Bill Let AI Giants Outmuscle Utilities?

详细摘要

Yesterday the US Senate approved a preliminary version of a bill, the Bipartisan Affordability and Jobs Act, commonly referred to as BAAJA. We previously published an article in…

Leonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…

Yesterday the US Senate approved a preliminary version of a bill, the Bipartisan Affordability and Jobs Act, commonly referred to as BAAJA. We previously published an article in Oilprice titled, “The AI Power Grab That Could Upend America’s Utility Industry.” Our thesis was simple. Today’s AI giants (we referred to them as T-Rexes because economically they are akin to apex predators), thanks to their enormous size and political influence, will be permitted to build whatever electric power generating facilities they choose, regardless of pre-existing environmental or other legal constraints.

In our previous report, we said that the search for huge amounts of incremental electric power has resulted in a “grab for gas”. Most of these large AI-related facilities will power themselves by utilizing relatively small, inefficient, and highly polluting gas combustion turbines (CTs). Anthropic this week announced a multi-billion-dollar purchase of mostly gas CTs to power a new facility in Texas. Until we see something different, despite the November 2026 election, we will assume this is the new rule rather than the exception.

In order for the rapid data center build-out to continue, there are three things that need to happen: 1) a rapid build-out of electric power transmission and gas pipelines to power these new facilities; 2) a limit on the ability of intervenors like state AGs or tribal authorities to stop these new lines; and 3) a willingness to completely ignore existing environmental regulations pertaining to air and water pollution. The BAAJA bill provides all three.

Taking a step back, this is an early draft of a bill that will likely be heavily revised several times and may still die in a newly reconstituted House of Representatives.

As for no. 1, we would have to agree given the possible addition of 40-50 gigawatts…

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