Our view: draw the customer boundary before negotiating the energy price
A developer plans a private network, central generation and one power bill for several tenants. The physical arrangement may look efficient, but the customer, seller, operator and asset owner are different legal and commercial roles. Owning all the land does not answer whether the proposed tenant transaction is permitted. Define the arrangement before embedding it in a lease or ordering a campus distribution system that assumes it.
Texas framework: co-op territory is not ordinary retail-choice territory
Utilities Code 41.051 leaves the decision to offer customer choice to the cooperative’s board. Chapter 41 also allocates important service and rate decisions to that board, subject to the statute. In a customer-choice area, section 39.352 establishes REP certification requirements for retail electric service, and section 39.107 addresses rights of separately metered tenants. These are different pathways. A REP relationship should not be assumed to override a non-opt-in co-op’s service structure. Project counsel must evaluate the actual customer and billing model and any applicable exception.
Texas Utilities Code Chapter 41: cooperative choice and board authority
An approved service model is part of a leasable campus
A tenant may require direct utility service, its own retailer where available, dedicated metering or an operational boundary different from the developer’s preferred central system. If those conditions are discovered after site electrical design, the owner may face redesigned substations, new easements and revised capacity commitments. Our recommendation is a tenant-service schedule alongside the campus master plan: legal customer, meter, contracted capacity, operating boundary and responsibility for each phase.
Price the tenant service arrangement before promising it
Request project-specific service and metering options from the cooperative rather than assuming agricultural rates or limited experience. Identify the account holder, tenant meter boundaries, approved billing model and responsibility for deposits or construction contributions. Consider opt-in status and applicable law with counsel. Formation of a district or another entity is not itself permission to displace the serving utility.
The owner’s situation
An illustrative two-tenant campus is in a non-opt-in co-op area. The anchor is willing to accept the developer’s proposed service package, but the second tenant expects to procure retail electricity independently. The developer has offered both tenants capacity from one planned connection and wants to recover shared electrical costs through an energy charge. The co-op has not approved the metering and service arrangement. Leasing is now ahead of the utility model.
What we need to establish
Obtain the serving entity’s identity, current customer-choice status, applicable service rules, proposed connection agreement and one-line design. Document each tenant’s procurement and reliability requirements, the billing formula and every transfer of electricity between legal entities. Appointed counsel should classify the service model and certifications or exceptions; the utility and engineers should confirm metering, ownership and operational acceptability. Commercial convenience is not evidence of legal eligibility.
The options we would test
What owners should do
Our proposed execution sequence for this assignment:
Reconcile the promises already made
Read the executed tenant documents and identify conflicting service expectations. Establish which commitments can still change and the commercial cost of doing so.
Engage the right provider decision makers
Put a specific metering, load and phasing proposal to the co-op or utility. Identify the approval authority and the upstream dependencies, rather than asking for a generic power assurance.
Separate infrastructure recovery from unapproved energy sales
With counsel and commercial advisers, structure lawful asset funding and tenant obligations. Allocate minimum-demand exposure, stranded shared assets and future capacity without assuming a resale entitlement.
Close the lease and utility interfaces
Carry the chosen structure into the provider agreements, tenant schedules, engineering basis and operating boundaries. Release affected equipment only when those documents describe the same campus.
How we protect the decision
A cooperative partnership is generally a utility commercial relationship, not automatically a statutory public-private partnership. A municipal utility relationship introduces its own public authority and process. Either can be useful if it has an executable scope, but neither label eliminates approvals. Sitebraid advances the development interfaces; counsel determines legal eligibility and regulated providers retain their service obligations.
What completion looks like
The result is a tenant-service model that the applicable provider can implement, counsel has evaluated, and the tenants have accepted. Capacity commitments, billing terms, asset ownership and operating control agree. The owner can lease the next phase without silently promising a retail arrangement that the campus cannot provide.
What we would track
- Tenant clauses inconsistent with provider terms
- Service-model approvals still conditional
- Unallocated shared electrical cost
- Capacity reservations reconciled across tenants
Resolve who is serving whom before selling the campus’s power story.