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Good morning and happy Friday,
The 81st Session of the United Nations General Assembly is underway in NYC—but Chinese President Xi Jinping is skipping the UN festivities and instead meeting with President Trump in Washington, a calculated move designed to project that China is America's equal on the world stage.
Debate over a proposed diesel-export ban is dividing Republicans and straining the GOP’s traditionally close relationship with Big Oil. Farm-state Republicans say action is needed to lower U.S. fuel prices and help farmers and consumers; oil-state Republicans and industry warn it could backfire by reducing refinery output and raising other fuel prices.
Senate negotiators have been working hard on permitting reform (see Must Read, below), and transmission is a big piece of that puzzle. A new report from Grid Strategies finds that the cost of grid congestion in the U.S. hit a record last year at over $17 billion, “a significant jump over 2024’s total of $12 billion.”
Speaking of transmission, on Thursday the DOE announced plans to offer $1.9 billion in funding to 31 grid-improvement projects that are expected to add 23 GW of transmission capacity. For his part, Senator Martin Heinrich (D-NM) has introduced legislation that would provide a 10-year, 30% ITC for long-haul transmission lines.
Wood Mackenzie has released its Q3 2026 US Energy Storage Monitor this week…among other things, it finds that the US energy storage market installed a record 18.9 GWh in Q2 2026 even as installed power fell 7% y-o-y, and that the data centre buildout is uplifting BESS installations, which are predicted to “grow over 50% in MW terms over the next five years as low costs propel storage into new regions and use cases.”
And—a perennial fave here at this Dispatch is baaack: “The annual celebration of ursine corpulence known as Fat Bear Week has officially begun.” 🐻
Read on for more.
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The Vote That Wasn't
A last-minute push to pass bipartisan federal permitting reform before the pre-midterm recess ran out of runway Thursday, with Senate Democrats concluding there isn't enough time to paper, sell, and vote on a package before senators leave Washington. Negotiators spent the week trying to bridge the Senate's Energy Permitting Reform Act (EPRA) and the House-passed SPEED Act, with talks centering on a trade between expanded transmission authority and limits on judicial review. Republicans insist a deal is done; EPW Chair Shelley Moore Capito told reporters "we have a negotiated bill." Democrats say they need more clarity on what the administration is actually offering before they can ask their caucus to vote.
The framework that emerged is a preview of what could return in the lame duck. Here's where it stands:
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Two permitting bills were being stitched into one. Senate negotiators worked to pair EPRA's interregional transmission provisions and expanded FERC authority with the SPEED Act's judicial reforms, including a 150-day deadline for filing challenges to project approvals and a 180-day limit on courts' ability to halt projects.
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The core trade was transmission for litigation reform. Democrats pressed for measures to build interstate transmission and restrain the administration's power to cancel or stall projects; Republicans pushed for tighter limits on NEPA litigation and on states' authority to block projects under the Clean Water Act.
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Wind and solar were the sticking point. Democrats wanted assurances the administration would end its freeze on renewable approvals. The White House reportedly offered to green-light roughly 30 of the ~300 wind projects awaiting Pentagon sign-off, but Whitehouse said some of the administration's proposals "are still so general that we don't know what we're getting." Democrats had been signaling for weeks that the administration was "not even close" to meeting their demands.
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The clock did the rest. Capito had warned the deal "had to pop out in the next 48 hours" to clear the floor before recess. With the House already gone until after the election and no bicameral roadmap in hand, Whitehouse concluded a post-election vote was the better path. Environmental NGOs, who have been urging Democrats to hold the line against shortened litigation windows, got the delay they wanted, if not the outcome.
⚡️ The Takeaway
Not dead, but deferred. The pre-recess push is over. The question now is whether the framework survives six weeks of campaign season and a lame-duck session with a crowded agenda and shifting leverage. If Democrats gain seats in November, they'll have less incentive to accept Republican judicial provisions and more room to demand transmission and clean energy protections; if the map goes the other way, the current deal may look better in hindsight than it does today. Either way, the lame duck is the last realistic window for this Congress. Miss it, and the whole process restarts in January with new bill numbers, new committee markups, and a new set of negotiators. |
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Raising the Bar
As data center demand reshapes power markets, Virginia and California are taking steps to make developers bear more of the infrastructure and environmental costs—and, in Virginia, to actively encourage clean power solutions. For clean energy developers, the emerging rules could create new opportunities to supply rapidly growing data center loads. Here’s the haps:
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Virginia is pushing data centers toward clean power. Gov. Abigail Spanberger’s new framework would limit on-site natural-gas generation, require cleaner backup power over time and prioritize grid access for data centers that invest in clean energy. The state also plans to make it easier for data centers to bring their own clean power by addressing utility charges that can discourage those investments.
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The framework also shifts grid costs toward large loads. Virginia would require data centers to shoulder a more equitable share of transmission and generation costs, including infrastructure built specifically to serve them. The state is also seeking stronger commitments from developers before projects move forward, potentially reducing speculative demand for grid capacity.
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California is moving in a similar direction—with a stronger focus on cost allocation. Gov. Gavin Newsom signed seven bills requiring data centers to pay for grid upgrades and generation costs, disclose energy and water use, and undergo additional environmental review. One measure also incentivizes on-site clean energy, creating another potential opening for clean power developers. Meanwhile, Los Angeles County has temporarily halted large-scale AI data center development in unincorporated areas while it considers its approach.
⚡️ The Takeaway
A new model is taking shape. Virginia plans to work with its legislature to turn the framework into permanent law in 2027, while California’s new requirements are already taking effect. Together, the states are establishing a model in which rapidly growing data center loads must account for their grid impacts—and increasingly, demonstrate how they can support cleaner, more reliable power. Observers expect all of this to translate into new demand for generation, storage and behind-the-meter solutions from next gen technologies.
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Turning Curtailed Clean Power Into Compute
What if the electricity being thrown away by renewable projects could instead power the AI boom? That’s the bet behind Rune, a startup putting modular data centers directly inside utility-scale solar farms—and tapping clean power that would otherwise be curtailed.
The opportunity is substantial. Texas curtailed nearly 10,000 GWh of renewable generation last year, largely because transmission constraints left solar and wind power stranded. California curtailed another 3,700+ GWh. Rather than waiting years for new transmission or grid interconnection, Rune’s RELIC system connects directly to solar or wind projects behind the inverter, using electricity before it ever reaches the grid. |
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The setup is essentially a data center in a box. Rune says its systems can be energized in as little as six weeks, avoiding the substations, transformers and grid upgrades required by conventional data centers. Its approach could turn a familiar renewable-energy headache into a new revenue stream. Instead of curtailing midday solar because the grid cannot absorb it, project owners can sell that otherwise-lost electricity to power compute.
Investors are clearly seeing potential in the model. Rune recently raised $40 million in a Series A led by Spark Capital, bringing its total funding to $53.5 million. The company plans to use the capital to secure additional agreements with solar asset owners and expand its on-site compute footprint. Rune has already deployed roughly 1 MW across projects in Texas, California and Massachusetts and says its pipeline extends into the hundreds of megawatts.
With data centers hunting for power and renewable projects looking for ways to monetize stranded generation, Rune is betting that the next wave of AI infrastructure could run on electricity that otherwise would have gone to waste.
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Thanks for diving into the Developer Dispatch with us.
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Building American power requires a powerful team. |
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