A developer can own the land, substation and internal distribution equipment without having a settled right to supply electricity to every tenant on the proposed terms. This becomes a leasing problem when a tenant expects its own procurement choice, metering arrangement or service contract while the campus design assumes one shared customer. In cooperative territory, the actual provider framework must inform the commercial model from the beginning.
The campus problem
Illustrative scenario, not a claimed client result.
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.
The meter, the customer and the asset owner may be different parties
The electrical drawing establishes where power moves. It does not by itself establish who buys it, who bills whom or which entity is responsible for continued service. Those questions belong in the utility and tenant agreements. A landlord's ownership of downstream equipment should not be treated as proof of retail-service authority, and a tenant's procurement preference should not be promised without checking the applicable cooperative arrangement.
The funding question follows the customer model. If the campus entity signs the principal service obligation, it may owe payments before tenants reach their operating ramp. If tenants contract separately, the owner still needs a way to recover shared infrastructure costs and allocate common capacity. Neither structure eliminates risk; they place it with different parties. An attractive provider proposal can become unfinanceable if its obligation sits in an entity with no reliable revenue or credit support.
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.
Settle the service structure before leases harden around incompatible assumptions
Consider a campus with an anchor tenant that wants direct service and a later tenant willing to use shared infrastructure. The owner should evaluate the provider-supported customer arrangements and the physical demarcations each would require. Have counsel establish the lawful billing and service structure. Have the engineers establish the metering, protection and operating boundaries. The preferred answer should support both the tenant commitments and the recovery of shared asset costs.
Sitebraid would coordinate those decisions with the cooperative, tenants and the owner's legal and financing teams. The terms need to address a tenant leaving, defaulting or changing its load, including which upstream payments continue and who may use released capacity. A single-campus account should not make an unrelated tenant's service depend on an unresolved payment dispute elsewhere on the property. These are design and contract questions to resolve explicitly, not assumptions to leave inside a master lease.
Solutions and their tradeoffs
Provider-led service to each accepted customer
Test direct service and metering arrangements acceptable to the utility and tenants, with shared infrastructure funded through separately documented obligations.
Conditions to resolve: Confirm available service structures, cost allocation, capacity reservation and the party responsible for future upgrades.
A counsel-confirmed landlord or campus service arrangement
Evaluate the exact proposed billing and asset structure under the applicable law and provider rules.
Conditions to resolve: Do not equate calling a charge rent, a pass-through or an infrastructure fee with an exemption. Obtain the actual classification before leasing.
A qualified energy partner within a lawful structure
Where the service area and rules permit it, test an appropriately authorized provider relationship for the tenant supply obligation.
Conditions to resolve: Separate energy sales from wires ownership, interconnection and operating authority. One partner does not necessarily perform all roles.
Follow one tenant default through the service structure
Illustrative diligence map. It does not establish a right to sell electricity, disconnect a tenant, select a supplier or bypass cooperative rules.
Swipe or scroll to compare all columns.
| Boundary | Single campus customer | Separate provider-supported tenant accounts |
|---|---|---|
| Upstream payment | Campus entity remains liable under its service agreement | Each account has its own obligations, but shared-asset costs may remain with the sponsor. |
| Tenant B fails to pay | A lease receivable problem may become a campus liquidity problem | Account separation may limit payment exposure; confirm provider rights and shared dependencies. |
| Tenant A continuity | Test whether upstream default could affect unrelated load | Separate accounts do not eliminate a common transformer or operating failure. |
| Before lease signature | Reconcile deposits, fixed charges, recovery rights and lawful remedies | Reconcile metering, easements, common-asset funding and the provider's accepted customer model. |
This is the development problem behind our tenant utility model challenge. Our Power & energization capability explains the scope Sitebraid can take on.
Putting the analysis to work
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. Have retained counsel advise on 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.
How Sitebraid would support this decision
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 advisors, 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
Apply the selected structure to 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.
The result the owner should require
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.
How to measure progress
- Tenant clauses inconsistent with provider terms
- Service-model approvals still conditional
- Unallocated shared electrical cost
- Capacity reservations reconciled across tenants
The decision to take forward
Choose the customer and ownership structure with the provider before promising tenant procurement rights or energy pricing. Align leases, meters, upstream obligations and shared-asset recovery. The result should be a service model the cooperative, owner and tenants can all execute, not merely a network the campus can construct.
If you are planning to serve your tenants' power yourself, our Power & energization work lays out the service models open to your campus and the questions to take to your counsel.
Continue with A Texas Private Use Network is an operating structure, not a private-wire shortcut. to examine the connected decision.