Mike Lee

The midterm elections are over, but one of the lame-duck session’s biggest votes is still ahead. Within days, the U.S. Senate will vote on a piece of legislation that could bring the West billions in new energy investment and lower electricity bills for everyday ratepayers: the Bipartisan American Affordability and Jobs Act of 2026 (BAAJA).

Two Western senators, Mike Lee, R—Utah, and Martin Heinrich, D—N.M., were instrumental in writing it, and if it passes, it would be the most ambitious permitting reform legislation in a generation.

The West has tremendous energy potential but is in dire need of permitting reform to unlock it. Utah Gov. Spencer Cox made this a priority with his energy superabundance initiative as the former Chair of the Western Governors’ Association. BAAJA can address two mounting challenges in the region: surging power prices and an onslaught of new electricity demand.

In Western states alone, developers have proposed adding 100 new data centers to the grid, largely to serve the AI industry. Meanwhile, between rate increases and record-breaking heat waves, consumers’ power bills across the West are rapidly climbing.

According to PowerLines, a nonprofit consumer advocacy group, utilities in the region have requested $6.5 billion in rate increases so far this year. BAAJA would make it easier to deploy two key tools to address these challenges: geothermal energy and interregional transmission.

The West is rich in potential sources for geothermal energy. The U.S. Geological Survey recently estimated that there is a potential 135 GW of it across the Great Basin states. That’s the equivalent of putting 67 new Hoover Dams onto the grid system, which would equip the region for dramatic economic expansion.

BAAJA could help unlock this resource by making federal permitting faster and more predictable on federal lands, where a large portion of the West’s geothermal resources are located. BAAJA would level the playing field with the oil and gas industry and pay dividends to Western communities. Energy leases on federal lands generate substantial revenue. Last year alone, geothermal lease sales brought in $24 million, 75% of which went to the host state and county. This revenue can be significant to many Western county budgets.

BAAJA would bring new investment to Western states and counties and make it easier to build the infrastructure that can deliver power to customers. The grid lacks interregional transmission, which can leave low-cost power stranded, forcing customers to pay more.

BAAJA would also require the Federal Energy Regulatory Commission to put interregional planning and cost-allocation standards in place, necessary federal guidance to bring clarity to a complex and uncertain process. A recent national lab study found that interregional line projects typically return 60% more value to customers than the cost to build them, meaning these types of lines deliver significant bang for the buck.

The bill checks one more affordability box for the West: it would require data centers to pay their fair share for using and building out the grid. This would ensure that everyday consumers are not burdened with high grid-upgrade costs that would mainly benefit data centers.

BAAJA is on a fast track. The Senate is set to take the first procedural vote on Monday, and backers aim to clear both chambers before the new Congress is sworn in in January. Despite the bill being bipartisan, opposition has already started to come from environmental groups and some Western tribal nations, who argue the bill would make it harder to challenge dubious projects. But, as Alex Mechanick, an assistant professor at the Johns Hopkins University School of Government and Policy, notes, the bill cuts procedural red tape while preserving the right to challenge projects that break the law.

After Democrats’ strong midterm showing, opponents will argue the party should hold out for a better deal next Congress. That would be a mistake. With more data centers coming online and electric bills rising, the West can’t afford to restart negotiations and risk a new package never getting signed into law. The deal on the table already delivers major wins for the West. The time to build the grid is now.