BAAJA Transmission Provisions Ranked by Lead Time for Contractors

BAAJA Transmission Provisions Ranked by Lead Time for Contractors

A Senate cloture vote on Nov. 9 will decide whether the Bipartisan American Affordability and Jobs Act (BAAJA) moves forward, and the bill’s transmission provisions would reshape who plans, pays for and builds high-voltage lines. Utility Dive reports that Rep. Josh Harder, D-Calif., a chair of the Build America Caucus, calls the cost-sharing language “by far probably the most important part of this bill.” The same bill, however, funds no construction and sets no build schedule, and that gap matters most to crews planning backlog.

Background

BAAJA is bipartisan permitting reform legislation introduced in the Senate Sept. 30. Per Utility Dive, its motion to proceed is scheduled for the Nov. 9 cloture vote, according to the Bipartisan Policy Center.

The bill expands FERC’s authority in several ways. It eliminates the federal right of first refusal for incumbent utilities, which strips their automatic right to build new regional lines. It requires FERC to issue a rule directing each transmission planning region to file a consolidated interconnection and regional transmission planning process. It lets FERC require public utilities to make cost-effective grid upgrades, with a penalty for noncompliance on a timeline FERC sets, including a possible cut to return on equity. And it directs FERC to establish rate treatments for regional and interregional planning and cost allocation, with tariffs that assign costs to the customers who benefit.

Harder said FERC has seen “essentially no new interregional transmission built in a long, long time,” and described the bill as giving regulators “a much bigger hammer to swing” if they conclude too little is being done.

Analysis

Ranking by lead time (our inference, since the source gives no schedule). The provisions work on different clocks. From fastest to slowest:

1. Right of first refusal removal. This is a change in who may build, not a new project. It could affect competitive bidding for regional lines sooner than anything else, but only for lines not already assigned.
2. FERC’s penalty authority on required upgrades. The timeline is whatever FERC decides, and the source does not say when. It targets utilities that sit on cost-effective upgrades, which are typically shorter-cycle work such as reconductoring or substation additions. Those are the jobs most likely to reach crews first, in our reading.
3. Consolidated planning filings from every region. FERC must write the rule first, then regions must file. The source gives no rulemaking deadline.
4. Interregional cost allocation tariffs. These are the slowest and the biggest. Lines crossing regional seams need a cost split before a developer can commit, and that split is what Harder expects to end the finger-pointing.

What the bill leaves out. Advait Arun of the Center for Public Enterprise said “there is no money in any of these proposals,” in reference to the House Build More Agenda. Arun also flagged that the interregional mechanism has no forcing function if regions fail to file. The bill allows only a six-month extension, and the outcome after that is unclear. Chirag Lala, also of the Center for Public Enterprise, made the same point. Arun suggested adding firepower to federal finance programs such as DOE’s $2.5 billion revolving Transmission Facilitation Program fund, and loosening the “federal support restriction” that blocks DOE’s Office of Energy Dominance Financing from backing projects with other non-tax-credit federal commitments. Those are suggested amendments, not current text.

Harder argued that limited fiscal headroom means lawmakers will favor pro-growth policy that does not demand large new spending. In our reading, that signals cost allocation to beneficiaries, not appropriations, as the funding model.

Which regions unlock first. The source does not name any region, queue or project, so we cannot rank them. Because the bill requires every planning region to file, no single region is singled out. Any claim about 2027-28 energization from this bill would be speculation. Our inference is that a bill still facing a cloture vote, then FERC rulemaking, then regional filings, then cost allocation, then engineering and permitting, is unlikely to put new interregional lines in service by 2027-28. Work energizing in that window is likely already in utility or RTO pipelines. BAAJA may speed it at the margins by pushing utilities to complete cost-effective upgrades.

Other risk factors. Harder acknowledged that tribal organizations oppose the bill’s changes to the National Historic Preservation Act, and said that area may be clarified. He expects the “vast majority” of the bill to stay as is, though he described the negotiation as “balanced on a knife.” Utility Dive also cites a report that DOJ moved to revoke offshore wind permits, which could threaten the Senate bill, and an Aug. 17 report that DOE canceled three national transmission corridors.

What It Means for Subcontractors

• Line and substation contractors: Nothing in BAAJA creates 2027-28 work by itself. Treat the Nov. 9 cloture vote as the first checkpoint, then expect a FERC rulemaking with no published deadline. Until then, price 2027-28 backlog off projects with signed owner agreements, not legislation.
• Line contractors targeting regional lines: Removing the right of first refusal means non-incumbent developers can compete to build new regional lines. Build relationships with those developers now, because selection of the builder, not just of subcontractors, is what changes.
• Substation and reconductoring crews: FERC’s authority to compel cost-effective upgrades, backed by return-on-equity penalties, is the provision most likely to produce shorter-cycle work first. Ask incumbent utility clients which upgrades sit in their regional plans and which they have deferred.
• ROW, survey and civil contractors: Interregional lines are the slowest lead item, since cost allocation tariffs must come first. Hold off on committing equipment and crews to them. The six-month extension for regions that miss filing, and the unclear outcome after it, adds schedule risk.
• Anyone relying on federal financing: The $2.5 billion Transmission Facilitation Program and the Office of Energy Dominance Financing restriction are the levers to watch if a client’s project depends on federal support. Ask whether the owner has stacked federal commitments that could block loan financing.
• Cultural resource and permitting scopes: Tribal opposition to the National Historic Preservation Act changes means the final text could shift. Keep survey and consultation scopes in bids until the bill passes.