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Some climate policies are safe. Some are not.

Absent a last-minute deal between a bipartisan group of senators and the Republican-led House, the federal government will shut down on Sunday. With much of the Biden administration’s climate agenda a work in progress, a shutdown could grind time-sensitive rulemakings and grantmaking activities to a halt, not to mention regular environmental protection.
But it’s not so simple. Thanks to the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, much of the government’s climate work has been funded outside of the annual appropriations process and could prove fairly resilient to a shutdown. However, few agencies have released their contingency plans, and so it’s hard to parse exactly which activities will continue. The White House has been eager to use the prospect of government responsibilities going unfulfilled as leverage against Republican leaders in the House.
When we reached out to federal agencies and the White House for more information, they either declined to comment or referred us to the Office of Management and Budget. That office did not answer questions but a spokesperson said in an email that “shutdowns are disruptive and distracting, making it difficult for agencies to deliver for the American people at the same pace — even for programs with available funding — given how much time and attention must go to managing the impacts of a shutdown.”
The clock is ticking on several key upcoming climate and clean energy rules, due to the Congressional Review Act. The law allows Congress to overturn new federal rules within 60 legislative days — which can actually stretch months — by a simple majority vote, and with the president’s signature. That means if the rules aren’t finalized in time and Biden loses his re-election bid, some of the headway his agencies make to cut emissions could quickly be erased.
We talked to former staffers and lobbyists to get a handle on how a shutdown would affect climate and environmental programs throughout the federal government.
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Yes, the IRS has an important role to play here. Much of the Inflation Reduction Act’s implementation is actually up to the IRS writing rules outlining how companies can qualify for tax credits. For example, the agency has yet to even propose rules to claim the lucrative tax credits for producing clean hydrogen, or finalize others on electric vehicle battery and mineral sourcing requirements, or apprenticeship requirements, or how tax-exempt entities can qualify for funding.
It’s not clear whether the IRS would continue to chip away at these processes if there’s a shutdown. When one loomed last year, the agency’s contingency plan said that its more than 80,000 employees would still be able to work thanks to “supplemental appropriations available through September 30, 2031.” But whether that will be the case this year remains unclear.
The National Treasury Employees Union, which represents IRS workers, told its members that the IRS would “partially close” should a funding deal not be reached by September 30, according to the Federal News Network. The NTEU did not respond to a request for comment. A Treasury spokesperson also declined to comment and said that contingency plans would be released later this week.
Even if the IRS continues working on the rules, it will likely not be able to engage directly with industry or outside groups while the government remains closed, a former Department of Energy official, who asked not to be named, told us. “There’s still a lot of guidance that we’re waiting for, it’s critically important that it continues to move forward,” the former official said. “Activities that are people driven — negotiating, educating, and guidance — those are going to be much more impacted.”
There also wouldn’t be any of the announcements and public and private engagement that takes up much of the rulewriting process, the former official said.
And even if the IRS continues to work at something like its full potential, any work it has to do with other agencies whose funding runs out could be impacted, a lobbyist who works on energy issues pointed out to us. “Carryover funds may mean a short shutdown isn't a big deal, but a prolonged one could compound what is already a huge strain on agency resources and bandwidth,” the lobbyist said.
The EPA is in the middle of several rulemakings that are essential to U.S. climate progress, including regulations on cars and trucks, as well as power plants, and the experts we spoke with did not think a government shutdown would put the rules at risk. Stan Meiburg, a former EPA acting deputy director, told us he noticed the agency had denied petitions from stakeholders to extend the comment period for the car emissions proposal, which tells him staffers are trying to get the rules out the door to safeguard them from a future administration.
“I think both of those standards, while they may be delayed a couple of weeks from their original time tables, will still meet the deadlines the agency has in mind for them,” he told us.
The EPA is also the lead administrator for about $41 billion from the Inflation Reduction Act, including billions in clean energy grants. That’s not expected to be affected by a shutdown, since the IRA included some budget for staffing. However, the agency’s regular grant work, including funding distributed to states to conduct their environmental protection work, will come to a screeching halt, said Nicole Cantello, a lawyer at the agency who spoke with us in her capacity as president of the government employees union local in Chicago.
Cancello said that overall, the agency would be “profoundly affected” by a shutdown with 93% of its staff expected to be furloughed. A lot of the country’s air and water quality monitoring occurs at the state and local level, but some environmental enforcement capacity will certainly be lost, she told us. During the last government shutdown, she was in the middle of an enforcement case where the agency was collecting air quality data at the fenceline of a polluting facility that was directly next to a neighborhood. All of the data was coming into employees’ inboxes, she said, “and they couldn’t look to see whether or not that data showed that these people were endangering that community or not. I remember how frustrating that felt.”
Meiburg, who was with the agency through several shutdowns, told us they have disrupted time-sensitive research projects and caused supply chain breakdowns. The EPA inspects all pesticides that are imported into the country, and during past shutdowns the pesticides began piling up in warehouses, he said.
But Meiburg said there’s typically a small number of people who will still be on call in case of an environmental disaster, like the Maui wildfires or the toxic train derailment in East Palestine.
The Department of Energy plays a major role in climate policy, including overseeing the Loan Programs Office and making grants and funding demonstration projects for early stage energy technology like long duration batteries, advanced geothermal, and direct air capture. Many of those activities would likely continue.
According to the agency’s publicly available “lapse plan,” about 5,500 of its around 14,000 full-time employees would stay on in case of a shutdown. The multi-year appropriations provided by IRA and the infrastructure law would keep just over 1,000 of those employees on the job, according to the document: “As of August 4, 2023, 1,040 DOE employees were fully or partially funded by multi-year appropriations; these employees would continue to perform funded work after the exhaustion of DOE base funding.” Around 3,000 employees of the Bonneville Power Administration, the public power company in the Pacific Northwest, would continue working because it funds itself through power sales.
In the case of a shutdown lasting less than about a week, “It is anticipated that there would be no disruption to DOE operations during a short lapse in appropriations,” a guide to the shutdown published on the DOE website says. “DOE has historically had sufficient previously appropriated funds that remain available to support operations during a short term lapse.”
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What would happen to Project Jupiter if the Bipartisan American Affordability and Jobs Act is passed?
One of the nation’s largest data centers is struggling under permitting woes. So let’s play a game: would the bipartisan permitting bill in Congress make the path easier, or might the federal legislation be irrelevant to large hyperscalers under development today?
Meet Project Jupiter, a mega project in southern New Mexico in Dona Ana County under development by Oracle and OpenAI, with financial backing from SoftBank and political support from the Trump administration for being a part of Stargate, a major Trump administration public-private initiative boosting AI development. Project Jupiter would be one of the largest data centers in the country if completed and currently is expected to run on a microgrid powered by fuel cells converting gas to electricity, which the developers claim will burn much cleaner than a typical off-grid gas turbine power plant.
Solving the energy side of the equation is a major hurdle for Jupiter, largely because of permitting delays and legal challenges.
In mid-September, the New Mexico Supreme Court lifted a stay it placed on consideration of the project’s state air permitting application. But on Wednesday, the Santa Fe New Mexican published emails between the New Mexico Environment Department and Project Jupiter staff detailing that independent emissions modeling showed pollution would be greater than predicted by the developers, after they had already requested permission to emit more CO2 than the state’s three largest cities combined. A final decision on the air permit was expected in November; the emails suggest the deadline may slip further. After the emails were reported, Oracle declared it would try to reduce emissions from the site by more than 30%.
At the same time, the New Mexico Justice Department is opposing the Federal Energy Regulatory Commission’s environmental assessment under the National Environmental Policy Act for a gas pipeline key to powering the project. The state’s attorneys assert the agency improperly failed to examine how the data center’s use of the pipeline would affect the environment. This week, a dozen GOP attorneys general representing states with large gas industries wrote FERC insisting they ignore the state’s protests, arguing that a recent Supreme Court ruling – known colloquially as Seven County – meant the federal government doesn’t need to look at the data centers gas pipelines are feeding when the lines are reviewed. Oracle has declared a “force majeure” over the pipeline delay. Rumors have circulated that trucks may just bring gas in for operations; company representatives told the Dona Ana County Commission this week those claims were “misinformation.”
Amidst these delays and potential legal conflicts, I’ve sought to understand whether projects like these – large data centers racing to operate within the next year or two – would be affected by enactment of the Bipartisan American Affordability and Jobs Act of 2026, a major permitting reform deal negotiated in part by New Mexico’s senior senator, Energy and Natural Resources chairman Martin Heinrich.
In Washington D.C., this legislation is exciting many constituencies, including energy industry types, policy wonks, business-friendly climate advocates. At the same time, more conservation-minded environmental groups opposed to provisions benefiting the fossil fuel industry are leaning into an argument that the legislation would accelerate a new era of gas-dominant data center construction.
Last week, I wrote about the environmentalists’ argument. I also examined the parts of the bill unlocking a new transmission build-out and requiring data center ratepayer protection. If enacted, FERC would have to require utilities to charge data centers not only for the costs of new grid upgrades but the charges incurred for using the grid, too. As my colleague Robinson Meyer has written, by forcing AI infrastructure operators to pay for both embedded and incremental energy costs, the legislation would essentially mean data centers paying both to reduce rates and build new energy generation. We’re seeing in real time what happens when you don’t deal with the transmission connection system while building new grid upgrades: companies will often opt to just build their own private off-grid fossil fuel islands. In Texas, for example, we’re seeing transmission hook-up delays lead to companies just building their own gas plants instead. This is not to say companies won’t still go off the grid if this bill passes, but it’s a serious consequence of our dilapidated energy system worth considering.
So I decided to evaluate Project Jupiter as a test case. How might the permitting bill affect this project and other big data centers at a stage like it?
For starters, let's say what the permitting bill does not do. It wouldn’t change the Clean Air Act. Project Jupiter would be one of the largest data centers in the country if completed, as well as potentially one of the nation’s biggest CO2 emitters if permitted as proposed. Nothing in the bill would affect requirements that the project adhere to national air emissions standards, so it wouldn’t affect the New Mexico Environment Department’s pending decision around the project’s air permits.
Enacting BAAJA could potentially affect this sprawling data center project in extremely hypothetical ways. It would reduce legal risks associated with future interstate gas pipelines under development expected to potentially branch out to Project Jupiter, including the Desert Southwest Expansion pipeline. It’s easy to understand in the words of Robert Pattinson in Primetime how this looks: like an easier path to expanding gas generation in this area.
On renewables, the bipartisan permitting deal would codify new permitting certainty and timeline provisions that claim to make it easier for companies to pursue solar development on federal acreage managed by the Bureau of Land Management. Project Jupiter just concluded a request for proposals to procure two gigawatts of renewable energy including solar power to meet the developers’ pledge to achieve 100% carbon matching by 2031 and Thiagarajan previously told the commission they’ve examined potentially getting energy from solar projects nearby on BLM lands.
But all of this is too theoretical and the case for any individual early-stage energy project too. Not to mention that we have no idea how the Trump administration would implement this certainty language, even for Project Jupiter.
To me, if people want to earnestly understand how the bipartisan permitting bill might actually affect data centers, they need to fully consider how making it easier and more transparent to hook up to the existing electric grid could reduce how much on-site gas generation is used at AI data center operations.
Delays in state permitting for the off-grid fuel cell plant have led Project Jupiter’s developers to consider what turning to the power grid would look like. In early September during a Dona Ana County commission meeting, Oracle executive vice president Mahest Thiagarajan told the panel, “If we end up in a situation where the air permit is not actually approved, I do have to work with a grid provider. Whether it is actually part of the grid or they built the grid for me could be TBD.”
“It doesn’t need to be on the grid, but I need [a] source of power to help power the data center,” Thiagarajan said.
Commission chair Manuel Sanchez replied that the microgrid plans were established in their community benefit agreement but he supported proposals requiring data center developers paying for upgrades and directly paying to reduce electricity rates for nearby residents. “It’s actually provided a downward pressure on rates,” Sanchez said, referring directly to such a policy created by the Georgia Public Service Commission.
Thiagarajan agreed. “My current plan is to continue to work with NMED [the New Mexico Environment Division] and get the off-grid site. If for any reason we have to, because I don’t have the air permit and I have to build the site, I strongly believe it has to come with me bringing down pressure to the rates. Period. I don’t think that’s a question of, I’m not increasing the rates. I actually have to come in and say, I am lowering the rates here.”
If Congress enacted this permitting bill in the lame duck, would Project Jupiter ditch plans to be off grid? It’s challenging to prove or disprove such a hypothetical. Representatives for the project did not respond to requests for comment. But we know any attempts at grid hookups without greater ratepayer protections are only leading to more conflict locally; this week, when Project Jupiter tried proposing a hook up to the grid for emergency power, the county commission fumed. Right now, the plan is still to power Project Jupiter with the gas fuel cell generation on site.
As I concluded this research, I noticed Heinrich’s office has actually promoted news coverage about what his efforts to enact data center ratepayer protections would do to Project Jupiter.
In early August, as the Senate was leaving for a summer recess, his office republished a Santa Fe New Mexican article about legislation the senator authored – the GRID Savings Act – and its potential impact on Project Jupiter. The article claimed that if Project Jupiter was unable to get its air permit, they’d be able to get power a different way under his proposal. The local news outlet also quoted an email from Sanchez, the county commission chair, stating that Heinrich’s bill “could be an avenue for Project Jupiter to fulfill their requirements if the air permit is denied.” Sanchez did not respond to requests for comment.
So I asked Senator Heinrich’s office for comment about this republished article, as well as if his permitting deal would indeed help ensure Project Jupiter was completed and came online. To conclude this story, here is their full statement:
The Senator has been clear that building big things responsibly means putting communities first. As he stated in his interview with the Albuquerque Journal, Project Jupiter botched community engagement from the start.
BAAJA is about making sure we build the energy infrastructure we need while keeping costs down for families and small businesses in New Mexico and across the country. The legislation would help get new energy generation, primarily clean energy, on the grid. By getting the energy onto the grid, states like New Mexico, which has enacted the Energy Transition Act, can continue working to ensure the energy powering our grid is increasingly clean.
The Senator has fought to ensure that growing energy demand doesn’t come at the expense of New Mexicans’ electricity bills by requiring data centers to pay for all of their associated transmission costs, rather than those costs shifting onto ratepayers. Ultimately, the Senator strongly believes that any major development, including data centers, should come as a benefit to the communities that host them, not a burden — and that starts with meaningful community engagement and real benefits for New Mexicans.
To be clear, BAAJA is federal legislation focused on energy infrastructure and grid connectivity. It does not ‘permit’ data centers. State and local government approval is still required. The Senator's legislation addresses the federal energy infrastructure challenges associated with a grid that cannot keep up with demand; it does not circumvent the state and local processes that determine whether Project Jupiter moves forward.
Media representatives for Project Jupiter did not respond to requests for comment.
And more of the week’s top news around project fights.
1. New England (and Maryland) – The Trump administration is still messing with offshore wind farms, even while trying to pass a permitting reform deal. Examining the court filings reveals why they may feel empowered to do it — and I’m not sure how this ends.
2. Columbia County, N.Y. – New York’s renewable energy permitting office has rejected an upstate solar farm on farmland as a House Democrat representing the area joined hands with the Trump administration in publicly railing against the project.
3. Cumberland County, N.J. – The Vineland data center project is impacting the sector’s reputation in the Garden State.
4. Hood County, Texas – It looks like this corner of Hill Country is going back to court over a data center.
These seven elections could change state energy policy.
No matter how well Democrats do in the House and Senate in November, it’s unlikely to mean anything new on climate policy in Washington, D.C., for as long as Donald Trump remains in the White House.
That is not true when it comes to the other elections this year.
Several states are on the verge of a possible Democratic trifecta, meaning unified control of both chambers of the state legislature and the governor’s mansion. It’s a position that could enable such states to either top off existing climate and energy policies passed in the last decade or to make the first real run at climate legislation in recent history.
There are also several races for control of public utilities commissions — and, in turn, for influence over rates and the potential adoption or expansion of clean energy — that are being closely watched.
Here are some of the biggest climate races beyond the House and Senate.
Minnesota passed its comprehensive climate legislation in 2023 after Governor Tim Walz won reelection in 2022 and the state Senate flipped to Democratic control. The bill included a 100% clean energy goal for 2040. Almost a year after Walz signed his bill, Michigan Governor Gretchen Whitmer signed her own, with a 100% clean energy target for 2040, along with energy efficiency and permitting streamlining. Walz would also sign a follow-on permitting bill in 2024. That November, however, Democrats lost control of both state houses (sort of — you’ll see).
Now many climate advocates and strategists look forward to possibly regaining trifectas in the two upper Midwestern states. “They’re in a spot where they haven’t been able to pass anything for two years,” Caroline Spears, the executive director of Climate Cabinet, a nonprofit advocacy group, told me. She said a priority for both states would be writing laws specific to data centers to make sure the energy they use is clean and they don’t increase costs for residential ratepayers.
“What you’re able to do when you have multiple bites at the apple is change your existing energy policy to match the current market and match the current needs, and that’s what Minnesota and Michigan have to do now,” Spears said.
In the case of Michigan, the House of Representatives stands at 58 Republicans to 52 Democrats, while the Senate is 20 Democrats to 18 Republicans. In Minnesota, Democrats have a one-seat edge in the House of Representatives, with 67 seats, compared to the Republicans’ 66 thanks to a Republican resignation (68 are required to reach a majority). But the House is still under a power-sharing agreement with a Republican speaker. Ballotpedia currently rates the possibility of a Democratic trifecta in either state as a “toss-up,” although Minnesota has a slightly easier path.
In both Michigan and Minnesota, a trifecta could deliver “policies that are focused on reigning in utilities’ profits to bolster affordability,” Courtney Brady, Evergreen Action’s senior Midwest director, told me.
“Really strong guardrails are needed in Michigan to ensure that data centers and utilities that are providing them energy have to continue to abide by the state’s clean energy laws,” Brady added.
Michigan Democratic gubernatorial candidate and Secretary of State Jocelyn Benson said she would “ban rate increases that are only being used to pad profits” and implement performance-based standards for utility payouts. She also said she would “conduct a comprehensive audit of our power grid and address the vulnerabilities and outdated infrastructure of our aging energy infrastructure.” Benson’s energy platform “heavily focuses on affordability,” Charlotte Jameson of the Michigan Environmental Council, a clean air and water nonprofit, told me.
Amy Klobuchar, the Democratic candidate for governor in Minnesota, has been less specific, typically including utility costs in a laundry list of affordability items including health care, housing, and child care.
And while Michigan does have a clean power standard, “We’ve not in Michigan really tackled transportation sector emissions, or frankly, housing and buildings,” Jameson said. A Democratic trifecta could shift transportation spending toward mass transit and away from lane widening, Jameson added, and could devote resources to electric-vehicle charging. Benson has also supported bringing high-speed rail to Michigan.
While Michigan and Minnesota have passed climate legislation that could be revisited for the age of load growth, several states may elect Democratic trifectas for the first time in decades, giving them a first shot at climate policymaking. Strategists and activists are targeting Wisconsin, Arizona, and Pennsylvania.
In Wisconsin, Republicans have an 18-15 majority in the state Senate, with half the seats up for reelection; Democrats only need to flip two. To gain control of the state Assembly, Democrats would need to flip five seats in the 99-member chamber.
Any energy legislation in the next session would likely address data center construction and ratepayer protection, including empowering utility regulators to better scrutinize requests for new gas plants and demand projections, Brady told me. Wisconsin Democratic gubernatorial candidate David Crowley has also proposed bolstering the state’s existing weatherization and efficiency programs.
In Arizona, where Republicans have a four-seat majority in the state Senate and a 33-27 majority in the House of Representatives, the oncoming Democratic trifecta is always an election away. While Arizonans have elected Democrats to both U.S. Senate seats — and to governor, with Katie Hobbs running for reelection — the party hasn’t controlled any house of the Arizona state legislature since the early 1990s. This has meant that progress on energy legislation has so far largely consisted of Hobbs vetoing anti-renewables legislation passed by Republican majorities.
A Democratic majority could do more to encourage solar development in the sunny state. “The thing we’ve always been pushing for with the Arizona state legislature in getting to a trifecta is any kind of clean energy incentive bill,” John Qua, campaign director at Lead Locally, a group that works to elect progressive candidates, told me. He also said a Democratic majority in the statehouse could implement “guardrails” on energy and water use by data centers in the state.
In Pennsylvania, Republicans hold a four-seat majority in the state Senate while Democrats have a three-seat majority in the House of Representatives. With Democratic Governor Josh Shapiro likely cruising to reelection, climate advocates are looking at maybe finally having an opportunity to pass legislation in a major energy-producing and exporting state with relatively little renewable generation. This could include beefing up standards for clean energy generation for the state’s utilities and getting the Senate to agree to a community solar bill.
Qua said that majority makers in the state legislature support “strong regulations of data centers somewhere between very tough guardrails and moratoriums,” and would likely push Shapiro to continue his turn against rampant data center development.
The 2025 Georgia Public Service Commission elections revolved almost entirely around data centers and electricity costs and resulted in two massive Democratic wins for the utility regulator. Now one of those commissioners, Peter Hubbard, is running for reelection following his special election victory, and another Democrat, Shelia Edwards, could flip partisan control of the PSC if she and Hubbard both win. A super PAC connected to the solar industry is spending $250,000 in the race to support the two Democrats.
“The solar and storage industry is building political power by investing in high-impact local elections like the Georgia PSC races, where policymakers have significant influence over permitting, utility policy, regulation, and energy markets,” Steph Bosh, board chair of the Community Clean Energy Coalition, said in a statement. “Building a durable network of solar and storage champions across the country is a long-term strategy, not a one-year effort, and we’re focused on scaling that work with industry buy-in.”
A Democratic PSC would likely look more skeptically on deals between data center developers and Georgia’s dominant utility, Georgia Power, and would be more friendly to deployment of solar and storage to meet the state’s growing electricity needs.
The other utility regulator race getting national attention is the Arizona Corporation Commission, which has two seats up for election this year. Arizona’s Democratic Attorney General Kris Mayes has tangled with the Republican-controlled board over data centers and the possibility of shifting costs towards ratepayers. The Commission currently has five Republicans, but both Qua and Spears told me part of the challenge is getting voters — who may be voting for Hobbs and other Democratic candidates — to realize the Corporation Commission is a partisan race at all. “It’s standard for most people to say, ‘I think I know what the Arizona Corporation Commission is, but I'm just not sure,’” Spears told me.
“In terms of our get-out-the-vote work, we are mostly focused on hiring organizers for the state legislature,” Qua said. “And then as a second ask: ‘Also, have you heard of the corporation commission?’”