Structuring Behind-the-Meter Generation To Manage FERC Jurisdiction

The first two alerts in this series traced the Federal Energy Regulatory Commission’s (FERC or the Commission) regulatory trajectory and the political economy now shaping data center power. This alert turns to the structuring question that sits at the center of every behind-the-meter generation and co-located load transaction serving data centers (collectively, BTM): how to design an arrangement that achieves the developer’s commercial objectives while managing, or, where the project configuration permits, avoiding FERC jurisdiction.

Structure determines jurisdiction. That is the single most important proposition in this area of practice. The physical configuration of the generation-to-load connection, the ownership architecture, the contractual relationship between the generator and the data center, and the presence or absence of a grid interconnection collectively determine whether the arrangement falls within FERC’s regulatory reach or outside it. A transaction that is structured