The Bipartisan American Affordability and Jobs Act (”BAAJA”, or “the Act”) of 2026 proposes a meaningful step toward closer coordination of transmission planning, interconnection costs, and financial commitments so that more generation - including clean energy - and large-load projects can be developed and built with improved cost, timeline, and administrative certainty to meet growing electricity demand from AI and other use cases.
Note: The draft bill is one step in a longer legislative and regulatory process, and its provisions could change before passage. If enacted, agency rulemaking and regional filings would establish many of the mechanics.
For developers, earlier cost information could improve location selection and financing decisions. The scope of any published price matters: it may not cover every project expense. Likewise, a required payment differs from an obligation that can be secured with a bond.
For sureties and capital providers, greater cost visibility could improve underwriting and capital planning. The benefit would depend on clearly defined obligations, claim triggers, and release terms. Uncertain forfeiture provisions could make credit capacity harder to provide.
As written, BAAJA (in Section 2106) would direct FERC to require regional consolidated-planning processes. These processes would publish planned interconnection locations with upfront, fixed, zonal per-megawatt costs and include a streamlined cluster-study process with a “single decision point,” meaningful nonrefundable financial security, and deterrent withdrawal penalties.
If enacted, FERC rulemaking and regional filings would establish implementation details, including how the single decision point operates. The provision itself could change before passage.
Timing: The draft sets an 18-month deadline for FERC’s rule and a two-year deadline for regional filings, measured from enactment. Bill text, pp. 224–226.
Interconnection considerations under BAAJA and FERC Orders 2023 and 2023-A
| Issue | Existing FERC pro forma baseline | Direction in the current BAAJA draft |
|---|---|---|
| Financial commitment | Readiness deposits and escalating withdrawal penalties. | Meaningful nonrefundable security; amounts unspecified. |
| Surety eligibility | Surety permitted for commercial-readiness and specified transition-study deposits. | Not expressly addressed in §2106. |
| Refunds | Certain unused balances returned after costs and penalties. | Relationship to existing refund rules unresolved. |
| Commitment gates | Exposure increases through study and agreement stages. | A single decision point; timing and preceding stages unspecified. |
| Cost visibility | Studies progressively establish cost assignments. | Published fixed zonal per-MW costs; scope and calculation unspecified. |
Precedent and History
As a brief recent history on simplifying interconnection processes and finance, FERC Order 2023 strengthened financial readiness requirements, while Order 2023-A expressly permitted surety for commercial-readiness and specified transition-study deposits. Actual regional tariffs and queue cycles govern treatment. BAAJA’s silence on surety does not itself remove existing acceptance; implementation would determine its application within a new framework.
More recently, SPP’s Consolidated Planning Process (CPP), approved by FERC subject to a condition in March 2026, offers a related precedent for interconnection reform. In short, the SPP approach publishes charges (known as GRID-C charges) before annual applications and creates a single proceed or withdraw decision. FERC Commissioner Rosner describes the expected tradeoff of SPP’s process as offering generators certainty and reducing speculation - in exchange for paying fixed fees up front and allowing fewer opportunities for generators to withdraw. Directionally, BAAJA’s single decision point and cost clarity resemble elements of SPP’s approach, though final implementation is to be determined.
Impactful Open Terms
“Nonrefundable” is a key term for interconnection finance. The draft does not specify when security becomes irrevocably committed, how much could be forfeited, or how its requirement would interact with existing refunds. Similarly, a “single decision point” does not necessarily exclude earlier studies or milestones.
Data-center and computing loads of at least 20 MW receive their own specific treatment, including phased buildout and commonly controlled sites. As written, the Act would require financial assurances or contributions before construction of necessary facilities or upgrades, while crediting support already provided for the same infrastructure. It does not expressly establish surety eligibility.
What to watch for surety: which obligations may be secured through bonds, when commitments become binding, what triggers payment or forfeiture, and when security can be reduced or released. Final legislation, agency rules, and regional tariffs would determine the obligations clients actually finance.
This article is for informational purposes only and does not constitute legal, financial, or investment advice.
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