Who Pays for the Grid, and When

The Senate's bipartisan permitting deal includes several provisions that have drawn little attention. They would rewrite federal electricity law so that utilities and states can treat AI data centers and crypto miners differently from other large customers. Robinson Meyer calls it the "data center double tap."

The legal problem it fixes

Since the early 1990s, federal law has barred utilities from charging a customer both the incremental cost of transmission built for it and the embedded cost of the existing grid. The rule comes from a 1992 FERC case in which a utility tried to charge a neighboring generator both the normal grid rate and a congestion fee. FERC ruled that utilities had to charge whichever of the two was higher, and formalized the policy in 1994. The rule no longer applies to power plants, but it still covers customers.

Ari Peskoe of Harvard's Electricity Law Initiative says almost every utility now charges data centers the embedded rate. Utilities do this to avoid arguing over which upgrade costs count as incremental. The upgrades themselves then go into everyone's rates. According to a Union of Concerned Scientists report, customers in the country's largest power market paid $4.3 billion in 2024 for transmission upgrades serving data centers. Peskoe first pointed out that this rule makes the "new power delivery infrastructure" promise in Trump's March Ratepayer Protection Pledge nearly impossible to keep.

What the bill does

Texas had about 200 MW of grid-scale batteries at the start of the decade. By the end of June 2026 it had 16.5 GW (nearly 29 GWh), and 6 GW of that came online in 2025 alone. Most of it was built merchant, in an energy-only market with no capacity payments. The average ERCOT battery earned 84% less in 2025 than in 2023. In 2023, there were 58 days when the average battery earned at least 50 cents per kilowatt. In 2025 there were three.

On Latitude Media's Catalyst podcast, Shayle Kann and Brandt Vermillion of Modo Energy walk through how the collapse happened and when it might reverse.

How the fleet cannibalized itself

In 2022–23, batteries made more than 90% of their revenue from ancillary services such as frequency and contingency response. That market pays well but is small. Once installed battery capacity exceeded what ERCOT procures, batteries moved into energy arbitrage, which now accounts for close to 80% of their revenue. More batteries competing to discharge in the same peak hours flattened the spreads they were trading on. Revenue fell from nearly $200/kW-year in 2023 to about $30. Vermillion says a two-hour system needs roughly $100/kW to be financeable. He attributes most of the decline to the fleet's growth and less to mild weather.

Average duration has grown from about 1 hour to nearly 2, and some projects run 2.5–3 or even 4 hours. Longer batteries can catch secondary spikes after shorter units run out of charge. During Storm Fern in January, operators held off charging overnight while real-time prices stayed near $150. Only about a third of the fleet's capacity was charged going into the next morning, and real-time prices reached four figures.

Worldwide sales of medium- and heavy-duty electric trucks hit a record in the first half of 2026, according to BloombergNEF. Nearly 160,000 e-trucks were sold, about 75% more than in the first half of 2025. The growth has been building for years. This year it got an extra push from diesel prices, which spiked because of the Iran war.

Why fuel prices matter

The economics come down to payback. An electric truck costs more to buy than a diesel one but less to run and maintain. The operating savings grow with the price of fuel, so expensive diesel shortens the time it takes for the higher purchase price to pay for itself. A fuel shock doesn't change the trucks. It changes how quickly a fleet buyer makes the money back.

Who is buying

China bought more than nine of every ten e-trucks sold worldwide in the first six months of 2026. BNEF credits strong supporting policies and China's large battery supply chain. About one in five trucks sold in China is now electric. Norway and Switzerland have even higher shares. China is also exporting more: Bloomberg News reports that its exports of electric tractor trucks in the first half of 2026 were more than double its exports for all of 2025.

The U.S. is the exception. BNEF says the U.S. battery-electric truck market has come to a "near standstill," with "policy and cost headwinds limiting uptake." The second Trump administration has:

• ended tax credits for zero-emissions vehicles
• frozen grants for electric trucks and chargers

Groundwater in Colorado's San Luis Valley supplies about 800,000 acre-feet of irrigation water a year. The unconfined aquifer that feeds most irrigation wells has lost an estimated 1.3 million acre-feet since tracking began in 1976, and it hit a record low in August. A water court trial held this summer will decide how the valley cuts its pumping. Judge Michael Gonzales expects a ruling later this year and an appeal to the Colorado Supreme Court whatever the outcome.

Why earlier cuts haven't worked

According to state Sen. Cleave Simpson, who manages the Rio Grande Water Conservation District, the district has spent about $100 million over 14 years to reduce pumping. Pumping fell by roughly a third over the past decade, yet long-term storage keeps declining. The main cause is shrinking inflow. The USGS found that snowmelt rates in the Rio Grande headwaters fell 20% per decade from 1984 to 2017. Irrigation ditches that once ran into September now often go dry in July. When surface water runs out earlier, farmers pump more and the aquifer gets less recharge.

The unconfined aquifer is made of several permeable layers, so one well's pumping changes how much water other wells can get. That is why regulators set up collective subdistricts in the early 2000s. Subdistrict 1 drew up and abandoned several plans over almost two decades, and the 2018 drought undid much of its progress. State Engineer Kevin Rein has warned that he will curtail its wells if sustainability goals are not met by 2031, or earlier if failure becomes "undeniable."

On October 1, 2025, OMB director Russ Vought announced that DOE was canceling 321 awards worth nearly $8 billion. He noted that all of them went to companies based in Democrat-led states. A new report from the DOE Alumni Network and Lawyers for Good Government uses federal spending data to track what has happened since. Its main finding: projects that survived the review are barely getting money either.

Terminated awards

Some of the 321 terminations were reversed by the agency itself. Courts have reinstated 18 awards, partly because DOE stipulated that being located in a "blue" state was a primary reason for cutting them. More than a dozen others are covered by pending lawsuits. More than 200 awardees, 61% of all terminated awards, are still stuck in DOE's own dispute process.

A proposed class action filed in Massachusetts in September could cover these awards. A former DOE official told Latitude Media that funds DOE has already de-obligated may be harder to restore even if a court rules the terminations unconstitutional.

Retained and "ghosted" projects

In April, DOE placed nearly 2,000 projects on a "retained" list. Since then:

• 69% of retained projects have received negligible new funds.
• 44% have received nothing.