On September 30, 2026, just before the Senate recessed ahead of the midterm elections, leaders of the Senate Environment and Public Works and Energy and Natural Resources Committees introduced the Bipartisan American Affordability and Jobs Act (S. 5653) (“BAAJA” or the “bill”), a comprehensive federal permitting reform proposal.

Reflecting over a year of bipartisan negotiations, BAAJA would amend the National Environmental Policy Act (“NEPA”), the Clean Water Act (“CWA”), the Endangered Species Act (“ESA”), the National Historic Preservation Act (“NHPA”), the Federal Power Act (“FPA”), and a range of other federal land and energy statutes. Project developers, utilities, transmission owners, data center operators, lenders, investors, states, tribes, and community and environmental organizations may all be affected, whether they are pursuing or evaluating a project, financing one, or seeking to challenge one.

Permitting reform has been on the congressional agenda for years, driven by calls for more rapid permitting, approval, and deployment of conventional energy, renewable energy, transmission, and conservation projects alike. Prior reform efforts have advanced in each chamber, but a bipartisan deal has proven elusive. To some extent BAAJA would codify environmental review reforms which have been developed under several Administrations; in other respects, the proposed changes would be novel and potentially far-reaching. Below, we summarize the bill’s key provisions and their anticipated effects, organized around five broad areas of impact. We conclude with some observations about the prospects of the bill’s passage and enactment and opportunities for stakeholder input to the legislation.

1. Narrowing and Refocusing Environmental Review

The bill would limit when federal review is required and narrow what agencies must analyze once review begins. Specifically, BAAJA would:

• Codify that NEPA is procedural and does not mandate any particular outcome (Section 1101), reinforcing the Supreme Court’s 2025 decision in Seven County Infrastructure Coalition v. Eagle County;
• Expand the exclusions from the definition of “major federal action” to cover, among others, transmission and pipeline repairs and upgrades within existing rights-of-way and actions whose effects another agency has already evaluated (Section 1102);
• Limit CWA Section 401 state water quality certifications to specified water quality requirements (Section 1202);
• Incorporate the project sponsor’s goals into the statement of purpose and need, and make the lead agency’s determinations on purpose, need, and reasonable alternatives binding on other participating agencies (Sections 1102, 1106); and
• Allow qualifying state, tribal, or other federal reviews that serve a similar function to substitute for a separate NEPA document (Section 1105).

2. Accelerating and Integrating Permitting Processes

The bill would move permitting toward coordinated, deadline-driven review tracks. Among other things, BAAJA would:

• Require agencies generally to determine within 60 days whether an application is complete, and within an additional 60 days whether the project merits a categorical exclusion, environmental assessment (“EA”), or environmental impact statement (“EIS”) (Sections 1105, 1109);
• Require sponsors to submit an inventory of required authorizations and a “record of stakeholder engagement” documenting pre-application outreach (Section 1109);
• Require a record of decision within 45 days of a final EIS, and remaining federal authorizations within 90 days (for participating agencies) or 120 days (for other agencies) after environmental review is complete (Section 1106);
• Designate a lead agency to coordinate a unified review framework for all participating agencies, resolve disputes among them, and set the project’s purpose and need and reasonable alternatives, which would bind the other participating agencies (Sections 1102, 1106, 1109);
• Allow sponsors to elevate interagency disputes to the Chair of the Council on Environmental Quality (“CEQ”), whose resolution would be final and unreviewable (Section 1106);
• Generally require ESA Section 7 consultation to conclude on the NEPA schedule and shorten the base consultation period from 90 to 60 days (Section 1302), and require NHPA Section 106 consultation to begin with NEPA review and generally conclude by the NEPA deadline (Section 2301); and
• Standardize public comment periods at 45 to 60 days, extendable to 75 days only with the sponsor’s and lead agency’s agreement (Section 1106).

3. Reducing Litigation Risk and Seeking to Strengthen Permit Certainty

The bill would significantly restructure judicial review and seeks to add new certainty protections for issued permits. In particular, BAAJA would:

• Limit standing to parties that submitted a comment sufficiently detailed to put the agency on notice of the specific issue later litigated and that allege a direct harm (Section 1110);
• Establish a 150-day filing period for many challenges and send NEPA challenges directly to the courts of appeals (Sections 1110, 1205, 1305, 2301);
• Codify “substantial deference” to agencies on the scope and contents of an environmental document (Section 1110);
• Make remand without vacatur the default remedy for many challenges, with a cure period of no more than 180 days, during which authorizations generally remain in effect (Sections 1110, 1205, 2301);
• Prohibit agencies from revoking, suspending, amending, or otherwise interfering with covered authorizations except on five enumerated grounds, place a clear-and-convincing burden on the agency, and authorize reinstatement, attorney fees, delay costs, and monetary damages (Section 1401); and
• Create new causes of action addressing unreasonable permitting delay and denials or delays resulting from a pattern of disparate treatment against a category of energy projects (Sections 1402–03).

4. Modernizing Transmission, Interconnection, and Grid Planning

The bill would create a more proactive federal framework for transmission development. BAAJA would:

• Create a strengthened federal “backstop” siting authority under section 216 of the Federal Power Act by, among other things, eliminating the requirement in current law that FERC exercise such authority solely in National Interest Electric Transmission Corridors designated by DOE, and authorizing FERC backstop permits for qualifying interstate transmission facilities of 230 kV or more under specified circumstances, while speeding the processing of applications for certain 345 kV or larger projects by authorizing simultaneous state and FERC review (Section 2101);
• Allocate costs at least roughly commensurate with the economic benefits customers receive, so that customers receiving no or trivial benefits are not charged (Section 2101);
• Codify a federal regional and interregional planning framework that uses common assumptions and models on recurring planning cycles (Section 2103);
• Require regions to plan generation and transmission together over a 20-year horizon, publish planned connection points with upfront costs, and adopt deposits and withdrawal penalties to discourage speculative interconnection requests (Section 2106); and
• Require deployment of advanced transmission technologies where benefits exceed costs and improve access to grid data needed for interconnection studies (Sections 2109–11).

5. Protecting Ratepayers and Leveraging Existing Infrastructure

The bill would push developers to use existing infrastructure more efficiently and seek to prevent cost shifts to ordinary customers. BAAJA would:

• Exempt reconductoring and other capacity upgrades within existing rights-of-way from NEPA and NHPA review (Section 2102), and expand categorical exclusions and streamlined review for specified modernization projects (Sections 2211–29);
• Require covered computational loads of 20 MW or more to bear both embedded and incremental transmission costs, and prohibit shifting certain generation, transmission, and distribution costs onto other customers (Section 2107);
• Require financial assurances for infrastructure constructed to serve covered loads, addressing the risk of stranded assets if a data center closes or reduces demand (Section 2107); and
• Preserve state authority to establish specialized rates and service conditions for large loads (Section 2107).

Looking Ahead

Senate leaders are targeting a cloture vote on the motion to proceed on November 9, 2026. Amendments are expected, and negotiators anticipate continued discussions with the Trump Administration regarding lifting any moratorium on permitting of wind and solar projects, which has been a baseline requirement for their support and is not directly addressed in the current BAAJA text. If enacted, BAAJA would establish a framework, rather than a final regulatory program. Extensive rulemaking and implementation by CEQ, FERC, the Environmental Protection Agency, the Department of the Interior, the wildlife agencies, and other federal entities would follow, and some of the bill’s new provisions would likely be tested in court.

In the meantime, project developers should consider how the bill’s deadlines, substitution provisions, and narrowed scope of review could affect permitting strategies and timelines for projects in development. Stakeholders on all sides should also assess how the new standing, comment, and filing requirements could affect litigation risk, particularly the growing importance of participating substantively in comment periods to preserve the ability to sue. Utilities, transmission developers, and large-load customers will want to evaluate the potential effects of the transmission planning, interconnection, and cost-allocation provisions. As the bill advances, timely monitoring of the legislative process and engagement with policymakers will be important for companies seeking to shape the final package.

Gabriela Nalvio Melillo, Associate, contributed to this blog post.