Every invoice in the draw can check out and the campus can still be a million dollars short of finishing the switchyard.

On a customer-built or build-transfer switchyard, approving a draw because invoice arithmetic reconciles is the wrong capital test. The owner must prove that available funding after this draw covers forecast cost to complete, that restricted interconnection security is not counted as budget, that retainage is not treated as free contingency, and that the billed scope sits inside TSP-accepted design. Put that test on the draw certificate before the next CapEx release.

This piece is not a restatement of the §25.194 study / SLLIA financial-security and CIAC gates, and it is not a shared-infrastructure sizing or responsibility-matrix article. Those instruments decide what you post, when CIAC clears, and which campus works sit in which column. This article is about owner exposure on the monthly draw itself: the moment cash leaves, leverage drops, and a shortfall that was already present becomes harder to cure.

The figures below are the labeled illustrative worked example from Sitebraid handbook SB-DRAW 3.2.0 (200 MW campus). They are not bids, utility determinations, or client results.

What a customer-built switchyard concentrates

A customer-built switchyard is the interconnection the owner funds and builds, then transfers to the utility. Until TSP acceptance and energization, the owner may carry design, long-lead equipment, civil works, construction, testing, land rights, and transfer closeout while also carrying CIAC, security, financing, and campus schedule obligations.

Sitebraid's Customer-Built Switchyard Drawdown and Owner Exposure Control Pack opens with a blunt rule: a switchyard draw should not be approved because invoices add up. The owner must prove that the claimed work exists, the equipment is acceptable, title and lien exposure are controlled, the schedule remains achievable, and the undisbursed budget can finish the accepted scope.

Invoice arithmetic is not cost-to-complete solvency

Take the handbook's 200 MW worked example. Original scope is $20m. Approved changes are $2m. Current budget is therefore $22m. Verified earned value is $11m, including eligible stored materials. At 10 percent retainage, retained value is $1.1m. Prior paid is $7m and current withholding is $0.4m. Net current entitlement is $2.5m.

Every invoice in that draw can be legitimate. Every line can reconcile to the schedule of values. The arithmetic can be clean.

Now test the money that is left instead of the money being spent.

Remaining physical scope is $11m. Probable extra work not yet approved is $1m, separate from the approved changes already inside the $22m budget. Required contingency is $0.5m. After paying the current draw, unpaid earned obligations are $1.5m. Cost to complete is therefore $14m. If available funding after the draw is $13m, the campus is $1m short.

The shortfall was already there. Paying the draw did not cause it. Approving the draw is simply the last moment the owner can see it while still holding leverage. Handbook stop conditions are explicit: hold or reduce the draw when cost to complete exceeds remaining committed funding plus approved contingency.

Two definitions do the real work

Available funding, in the handbook data dictionary, means undisbursed unrestricted committed funds after paying this draw, excluding speculative recovery and restricted security collateral. Posted interconnection security is returnable restricted cash under the §25.194 design, not construction budget. Counting collateral as "money left to finish" invents solvency the draw package does not have.

Cost to complete is forward looking. Section 7 of SB-DRAW 3.2.0 carries remaining contracted work including approved changes, unpaid earned obligations, probable changes, escalation, testing and commissioning, TSP and utility costs, land and transfer closeout, delay exposure, and required contingency. The remaining contract balance alone is not the test.

The handbook is blunt about the common workaround: retainage and withholding are not free contingency. Money already owed to the contractor cannot fund the gap. Treating retained dollars as a spare contingency pool double-counts an obligation as an asset.

TSP acceptance is a second gate

There is a second stop condition that has nothing to do with the funding math. If the requested asset or design sits outside the accepted TSP scope, the work can be built, invoiced, and arithmetically correct, and still not be accepted at energization. The draw cover certificate asks whether TSP review, inspection, hold points, and acceptance dependencies are current. Paying for out-of-scope work accelerates cash burn without buying an acceptable facility.

What this piece does not claim

• It does not restate the §25.194 two-step study / SLLIA financial-security gate or CIAC cash rules. That is the separate PUCT adoption article. Security posting and switchyard draw solvency can both be true on the same campus; they are different instruments.
• It does not reprice Batch Zero Verification RFI exhibit rows or portal submit rights. Those are separate Batch Zero pieces.
• It does not restate shared-infrastructure sizing columns or the infrastructure responsibility matrix. Who funds which campus systems is a different control from whether this draw leaves enough unrestricted cash to finish accepted switchyard scope.
• It does not invent MW, $, campus totals, or client outcomes beyond the labeled SB-DRAW 3.2.0 illustrative worked example.
• It is not legal, engineering, accounting, tax, or regulatory advice. Executed TSP agreements, EPC contracts, financing documents, Texas lien requirements, and the project-specific acceptance plan govern.

Capital checklist before the next CapEx release

Before the next construction draw, PSA deposit, or LOI hard date that assumes the customer-built switchyard stays solvent through transfer, put these on one page with a named owner on each line:

1. Draw arithmetic. Schedule-of-values reconciliation: original, approved changes, earned, stored materials, retainage, prior paid, withholding, net entitlement. Math must close before anyone discusses release.
2. Available funding after this draw. Undisbursed unrestricted committed funds only. Exclude restricted interconnection security and speculative recovery.
3. Forecast cost to complete. Remaining physical scope + unpaid earned obligations after this draw + probable extras + required contingency (+ escalation, testing, utility, closeout, and delay items the project actually carries).
4. Surplus / shortfall. Available funding minus forecast cost to complete. If short, fund it, rescope it with engineering approval, or hold. Do not approve and hope.
5. Retainage and withholding. Confirm they are not being treated as free contingency. Money owed to the contractor is not a spare reserve.
6. TSP acceptance scope. Confirm the billed asset or design sits inside accepted utility scope, with current hold points, witness status, and approval dependencies.
7. Exception register. Unsupported amounts withheld with cure evidence, owner, and due date carried into the next forecast, not buried in a status email.
8. Next three draws. Rolling forecast of gross request, held amounts, net draw, major scope, required evidence, and key risk updated after this decision.

If line 4 is blank or negative with no funded cure, capital is still approving invoice arithmetic. The handbook asks whether the campus can finish.

The free Switchyard Drawdown Control Pack (handbook SB-DRAW 3.2.0, control workbook, and release forms) is at the live resource page in Sources.

Related Sitebraid pieces (do not collapse)

• §25.194 capital gate (adjacent, not restated): https://sitebraid.dev/blog/puct-adopted-25194-large-load-financial-security-texas/
• Shared-infrastructure sizing: https://sitebraid.dev/blog/texas-data-center-campus-shared-infrastructure-sizing/
• Infrastructure responsibility matrix (resource): https://sitebraid.dev/resources/texas-data-center-campus-infrastructure-responsibility-matrix/
• Switchyard Drawdown Control Pack (resource): https://sitebraid.dev/resources/customer-built-switchyard-drawdown-owner-exposure-control-pack/
• Batch Zero Verification FS exhibits (K40): https://sitebraid.dev/blog/ercot-batch-zero-verification-rfi-financial-security-exhibits/