Preface

This is the first post in a four-part “BAAJA Blast” series covering the Bipartisan American Affordability and Jobs Act of 2026—a Senate bill proposing significant reforms to federal permitting and environmental review processes. Released in late September, the 417-page bill reaches well beyond its permitting heading, with provisions addressing broader questions of national energy policy.

In this series, we will take a sector-by-sector look at how the bill’s provisions would affect specific technologies and industries—and what they could mean in practice for developers, investors, large energy users, and other market participants. The series is organized around four areas: (1) transmission; (2) offshore wind; (3) data centers and large loads; and (4) distributed energy resources and virtual power plants. Throughout the series, we will also highlight the bill’s cross-cutting changes to environmental and historic preservation review where they bear on each sector.

The bill still faces significant hurdles. It must pass both chambers and be signed by the President, and it is not expected to be taken up until after the midterm elections, by which point its text—and the political landscape—could look quite different. Even so, the bill’s introduction is a major development in its own right. Federal permitting reform has been debated in Congress for years without enactment, and this bipartisan package offers the most concrete picture to date of what a durable compromise could look like. We hope this series will serve as a practical resource, and we will continue to track the bill’s progress through Congress.

Background

On September 30, 2026, Senate leaders released the “Bipartisan American Affordability and Jobs Act of 2026” or “BAAJA.” BAAJA is a broad federal permitting reform bill that shortens review timelines, narrows judicial remedies, and protects permits once they are issued, across nearly every type of energy and natural resource project.

This blog post focuses specifically on BAAJA’s impact on federal transmission development, arguably the backbone of the bill. As we have previously noted, transmission bottlenecks are keeping hundreds of gigawatts of solar, wind, and battery projects off the grid. These constraints result in higher electricity bills: C2ES/Greenline modeling projects about $7 billion in net delivery-cost savings by 2035 (after about $1.9 billion in new transmission investment) and about $1.1 billion in residential bill savings. The same modeling projects nearly 40 GW of added interregional transmission capacity.

FERC’s Beefed-Up Backstop Siting Authority (Section 2101)

Under the Federal Power Act (“FPA”), states have historically retained authority over transmission-line siting, permitting, and construction. One exception to this general rule are certain National Interest Electric Transmission Corridors (“NIETCs”) designated by the U.S. Department of Energy (“DOE”). Under current law, within NIETCs, the Federal Energy Regulatory Commission (“FERC”) may issue permits to construct or modify electricity transmission facilities under specified conditions (e.g., when a state has failed to act or denied an application).

BAAJA significantly expands FERC’s siting authority, removing the requirement that a line sit in a NIETC. DOE no longer plays an intermediary role, and instead conducts a congestion study under new FPA § 224, based on which DOE may identify “geographic areas” experiencing (or expected to experience) constraints or congestion. These geographic areas replace NIETCs as the reference point for certain DOE financing programs, but are not a prerequisite for a FERC permit.

The bill requires FERC to issue a permit if it finds that the transmission project is necessary in the national interest, that one of the state-failure triggers has been met (e.g., if a state denies the permit or fails to issue a permit within one year), and that certain other criteria are satisfied. A line qualifies if it carries power in interstate commerce (expressly including transmission from the Outer Continental Shelf to a state) and is capable of 230 kV or more; lines with advanced conductors can qualify at voltages FERC sets.

For lines of 345 kV or more, FERC review runs simultaneously with state review so as to avoid any delay if FERC has to take over the permitting process, but FERC cannot issue a permit until one of the state-failure findings in § 216(b)(1) is made.

BAAJA sets forth a cost allocation methodology for transmission lines that FERC finds meet the § 216(b) permitting criteria, under which costs follow beneficiaries. Customers that receive no benefit, or only a trivial one, cannot be involuntarily charged for a line, although a transmitting utility may still recover those costs through a voluntary agreement with its customers.

Points to Watch:

• Downstream State Permitting Effects: At a high level, the possibility of FERC taking over transmission permitting from state regulators could serve as an incentive to timely grant permits with reasonable conditions. This could indirectly impact state permitting processes even where FERC does not issue permits directly.
• OSW Transmission Permitting: Offshore wind lines from the Outer Continental Shelf are expressly covered by FERC’s permitting authority and eligible for cost allocation. This could significantly derisk permitting of those lines, allow for transmission-first development to lease areas, and when combined with FERC’s backstop protection for non-beneficiaries, allow for streamlined development for projects impacting multiple states.
• Jurisdiction Over In-State Lines: FERC’s jurisdiction may reach lines located entirely within one state provided such projects meet the 230 kV threshold and are used for the transmission of electric energy in interstate commerce. Though high-voltage lines typically fall under federal jurisdiction, this could raise jurisdictional questions over in-state lines depending on how aggressively FERC exercises this authority.
• Trump v. Slaughter and Increased Executive Control over FERC: In the wake of the U.S. Supreme Court’s recent ruling in Trump v. Slaughter, which held that for-cause removal protections for independent agency commissioners exercising executive power violate the separation of powers, a pro-transmission President could appoint commissioners to make full use of FERC’s expanded authority, potentially heightening the import of these provisions.

Regional and interregional planning (new FPA § 225)

All planning regions must use a common set of input assumptions and models and a common list of benefits. Regional and joint interregional plans are due within 2 years of enactment and must be updated at least every 4 years. ERCOT is excluded.

• Point to Watch: A project selected in a regional or interregional plan is deemed to satisfy most of the § 216(b) findings, creating a fast route from planning to permit.

Interconnection

Regions must plan generation and transmission together over a 20-year horizon and publish interconnection locations, each with an upfront, fixed, zonal per-MW cost. Cluster studies get a single decision point, nonrefundable security, and withdrawal penalties.

FERC must begin a rulemaking within one year requiring public utility transmission providers to share and employ, as appropriate, queue management practices that use AI, machine learning, and automation to speed interconnection studies, and must reopen the rule at least every four years.

• Point to Watch: By legally mandating that neighboring regional grid operators proactively plan together, the bill aims to fix a broken regulatory system that has resulted in few, if any, major interregional transmission lines actually being built over the last 15 years.

Grid-enhancing technologies and reconductoring

The bill requires public utilities to deploy advanced transmission technologies where the benefit-cost ratio exceeds one or face a FERC-determined penalty, which may include a reduced return on equity. Reconductoring within existing rights-of-way is excluded from NEPA review and is not an undertaking under NHPA Section 106.

• Point to Watch: The bill incentivizes utilities to apply grid-enhancing technologies to get more use out of the existing grid rather than unnecessarily build new transmission infrastructure on which they can earn a return on equity.