Negotiating interconnection & rate tariffs

Data center owners and operators need to structure a utility interconnection and supply agreements to minimize cost and risk. 

Energy will be the largest data center operational expense and this negotiation can determine the center’s future competitiveness.

Success at this stage is crucial for data centers that are searching for reliable and scalable energy at an affordable price. Owners and operators must have a thorough understanding of the local power utilities and their capacity during the negotiation stage.

Birch can help. Contact us to learn how we integrate energy and sustainability into each step of the data center development process to reduce risk exposure and increase economic and environmental performance

Avenues of opportunity & sources of risk include:

  • Wholesale energy market design, price and volatility
  • Supplier utility’s energy supply portfolio and expected future costs
  • Rate structure, including capacity, transmission & distribution cost recovery mechanism
  • Looming costs of fossil retirement, renewable integration, and grid modernization
  • Cross-subsidization between utility customer classes
  • State regulatory environment and potential changes by the public utility commission
  • Relative carbon intensity of one utility provider versus another