Behind the meter.
Power on site.

What is a behind the meter data center?

A behind the meter data center is a computing facility supplied by generation located on the customer’s side of the utility meter, rather than solely by electricity delivered over the electric grid. The generation may be on the same parcel, inside the fence of an existing power plant, or connected by a private line that does not pass through a utility’s retail meter.

The U.S. Energy Information Administration uses “behind the meter” for customer-sited generation, and describes distributed generation as energy produced onsite on the customer’s side of the meter, including solar, small wind, battery storage and combined heat and power. Those definitions were written for small systems; the same boundary now applies to data center projects measured in tens or hundreds of megawatts.

Source: EIA, Today in Energy and EIA distributed generation study. Reviewed November 2, 2026.

Three related terms are often used interchangeably, but they are not the same:

• Co-location places a large load at or next to a power plant. It may remain grid connected, take transmission service, or both.
• Off grid means the facility is islanded: no grid connection at all, so its own power supply must cover every hour of demand.
• Stranded power describes generation that cannot reach buyers economically, typically because of transmission limits. Curtailed wind in West Texas is the usual example.

Most real data center projects are hybrids. A site may run on behind the meter power most of the time and keep a grid connection to the local utility for backup, start-up or export. Grid connected data centers with some on-site generation are far more common than fully off grid projects.

Why data center developers build their own power

Most data centers still buy electricity from the grid. But new demand from artificial intelligence workloads has outrun the rate at which utilities can study, approve and build new grid connection capacity and new generation. ERCOT alone says it is tracking more than 438 GW of large-load requests, about 89% of them data centers. Not all of those requests will be built, but the volume shows why data center developers and data center operators look for their own power: sources that avoid the longest transmission work and can start coming online sooner.

Behind-the-meter arrangements appeal for three reasons:

• Time to power. Using existing generation or building on-site generation can avoid some network upgrades that sit on a new data center’s critical path.
• Energy costs. A load that consumes power where it is produced may avoid some transmission and delivery charges. Whether that becomes a real cost saving, measured per megawatt hour, depends on the contract, the market rules and how much backup the site must buy.
• Using energy that would otherwise be wasted. Wind and solar plants behind constrained transmission lines are curtailed when the grid cannot take their output. A flexible load at the plant can absorb some of that renewable energy and put clean energy to use instead of curtailing it.

The trade-off is that the project, rather than the local utility, now owns more of the reliability problem.

Source: ERCOT, June 18, 2026. Reviewed November 2, 2026.

Energy sources: natural gas, clean energy and existing nuclear plants

The power plant behind the meter determines what the data center can promise its users. Each of the common energy sources has a different profile:

Nuclear power draws attention because nuclear plants provide steady output and tech companies have discussed them as a source for future data centers. Co-locating with existing nuclear plants, though, raises the transmission questions covered below. Enhanced geothermal systems and small reactors are discussed as future options. Whatever the source, the generation capacity behind the meter has to cover the facility’s power consumption, including cooling, not just the GPU load. For a 5–10 MW modular project, the realistic choices are usually narrower: a renewable plant with curtailed output, a site with existing gas or industrial generation, or a grid-connected property with some on-site generation and storage.

Co-location rules and the federal energy regulatory commission

Federal rules matter most for co-located loads in regions with organized wholesale markets outside Texas. Recent actions by the Federal Energy Regulatory Commission (FERC) show the direction of travel:

• December 18, 2025: FERC found PJM’s tariff unjust and unreasonable because it lacked clear rates, terms and conditions for loads co-located with generators, such as AI data centers. FERC directed PJM to offer network service, a new firm contract demand service, a new non-firm contract demand service, and an interim service (Docket EL25-49).
• June 18, 2026: In its order on rehearing, clarification and compliance, FERC kept the core finding, set aside part of the December order, and directed PJM to extend the new transmission services to customers serving load with behind-the-meter generation.
• Docket RM26-4: FERC has opened a rulemaking on interconnecting large loads to the interstate transmission system. The advance notice used a threshold above 20 MW. In June 2026 FERC issued region-specific show-cause orders that suggested a large-load definition of at least 50 MW at above 69 kV. The docket remains open.

The practical message is that being co-located with a power plant does not mean a load is outside the system. Regulators are defining what transmission service a co-located load must take and pay for. Regulatory reform is still under way, so project financing should not assume today’s rules will stay fixed for the life of the asset.

Sources: FERC, December 18, 2025; FERC order, June 18, 2026 (195 FERC ¶ 61,209); FERC Docket RM26-4. Reviewed November 2, 2026.

Texas rules: SB 6, Batch Zero and flexible loads

ERCOT is mostly outside FERC’s jurisdiction, so the Texas Legislature, the Public Utility Commission of Texas (PUCT) and ERCOT set the rules that matter for Texas data center projects.

Senate Bill 6 (2025)

According to a law-firm summary of the statute, SB 6 sets rules for large loads of 75 MW or more in ERCOT, a threshold the PUCT may lower. Measures include interconnection standards, disclosure of on-site backup generation, remote-disconnect capability for new large loads interconnecting on or after December 31, 2025 for use in firm load-shed emergencies, and a competitively procured demand-reduction service for large loads. The PUCT is implementing these through rulemakings including Projects 58481 and 58482, and a separate rulemaking on net-metering arrangements for co-located generation. Read the bill text and current PUCT rules before relying on a specific provision.

ERCOT Batch Zero

On June 18, 2026, the PUCT approved ERCOT’s Batch Zero process, which studies all qualified loads of 75 MW or more together rather than one by one. It adds a pathway for customers building on-site generation and one for customers who agree to be curtailed when local transmission is constrained. ERCOT notes that fully islanded facilities generally fall outside ERCOT interconnection but may still need PUCT registration.

In its September 2026 board update, ERCOT reported 204 projects (66.4 GW) conditionally classified as base load and 158 projects (127.9 GW) as studied load. The process was paused in August 2026 after a directive from the Governor, and final decisions are expected in December 2026.

Controllable and flexible loads

ERCOT has long recognized loads that can respond to grid conditions. A Controllable Load Resource is a Load Resource that can controllably reduce or increase consumption under ERCOT dispatch. ERCOT’s earlier Large Flexible Load Task Force drafted a definition built around a 75 MW threshold and two paths: loads that follow ERCOT dispatch base points and interruptible loads with fast telemetry. These categories matter because a behind-the-meter site that can curtail on request is treated differently from one that needs firm power at every hour.

Sources: Bracewell summary of SB 6, July 9, 2025; PUCT staff presentation, October 17, 2025; ERCOT, June 18, 2026; ERCOT Batch Zero update, September 11, 2026; ERCOT working-group presentation, November 18, 2025; ERCOT draft Large Flexible Load definition, 2022. Reviewed November 2, 2026.

Behind-the-meter examples in Texas

Two Texas projects show the range of arrangements that get described as behind the meter. Neither is a QIT project.

Soluna, Project Kati and Project Dorothy. Soluna describes Project Kati, a 166 MW development in Willacy County, as built behind the meter at the Las Majadas wind project. The company says the design turns stranded renewable energy into compute while bypassing transmission upgrades and interconnection queues. Kati 1 (83 MW, bitcoin hosting) was completed in September 2026, and Kati 2 (83 MW) is planned for AI and HPC. ERCOT conditionally classified the full 166 MW as base load. Soluna’s Project Dorothy operates behind the meter at a West Texas wind farm, and the company says its modular design enables rapid scaling.

Lancium, Abilene. Lancium’s Clean Campus in Abilene, where Crusoe builds, is a grid-connected site: Crusoe announced an expansion to 1.2 GW of total power capacity in March 2025. Lancium pairs the grid interconnection with large-scale behind-the-meter battery storage and solar and markets power orchestration and grid-balancing services. It is an example of behind-the-meter assets supporting a grid-connected campus rather than an off grid facility.

The contrast is the useful lesson. “Behind the meter” can describe a load that depends entirely on a nearby plant, or one that uses on-site generation and storage to manage cost and flexibility while keeping a grid connection.

Sources: Soluna, Kati 1 completion, September 8, 2026; Soluna, Project Dorothy 2; Crusoe, March 18, 2025; Lancium, July 18, 2024. Company statements; reviewed November 2, 2026.

Data center development: why modular containers fit behind-the-meter sites

Behind-the-meter sites tend to share some traits: they are remote, their usable power can grow or shrink with the generation, and their long-term regulatory position may be uncertain. Modular, containerized data centers suit those conditions in several ways.

• Phasing. Capacity can be added in blocks as power is confirmed, instead of building a large hall for power that may not materialize. QIT plans around roughly 1 MW IT blocks on phased 5–10 MW sites.
• Matching the supply. A wind or solar plant with a known curtailment profile can be matched to a block count, with storage or grid backup sized to the workload’s tolerance for interruption.
• Relocatability. Factory-built modules can, in principle, be moved if a site’s power terms change. Moving is not free: foundations, electrical connections and heat rejection stay behind, so relocation is an option to plan for, not a guarantee.
• Liquid cooling at remote sites. High-density GPU racks need liquid cooling. A liquid-cooled GPU container brings the coolant distribution into the factory-integrated module, leaving heat rejection to be designed for the site’s climate and water access.
• Construction at remote locations. Factory integration reduces the amount of skilled field work needed at a site far from a metro labor market.

Workload choice matters as much as hardware. Training jobs that can checkpoint and pause may tolerate a curtailable supply better than inference services with latency and uptime commitments. Decide which workloads the site will host before sizing the power plan.

Risks of off grid and behind-the-meter power

Moving behind the meter changes which risks the project carries. The main ones to plan for:

• Single-source power. If one plant supplies the load, its outages become your outages; there is no electric grid to fall back on. Ask for the generator’s availability history and maintenance schedule, and decide what backup covers planned and unplanned downtime.
• Islanding. A fully off grid site must balance supply and demand on its own, including large step changes when GPU jobs start or stop. Protection, controls and storage must be designed for that operating mode.
• Permits. On-site generation brings its own approvals, including air quality permits for gas fired generators. In Texas, a September 21, 2026 directive instructed TCEQ to halt permits sought by data center projects pending an ERCOT audit. See the Texas permitting context.
• Regulatory change. FERC’s co-location orders, the open large-load docket, SB 6 implementation and the paused Batch Zero process can all change the terms for a site during its life.
• Grid-wide effects. Expect regulators, the local utility and communities to ask whether a co-located load shifts costs to other customers or removes supply the grid needs at peak demand. Prepare a clear answer.
• Connectivity. Stranded power often sits far from fiber. Confirm carrier routes and bandwidth early.

A behind-the-meter site checklist

1. Document the generation: owner, type, capacity, hourly output history and planned maintenance.
2. Define the electrical arrangement: grid connected, co-located with transmission service, or islanded, and the metering point.
3. Identify which rules apply: ERCOT or another market, the SB 6 thresholds, Batch Zero status, and any FERC co-location service.
4. Set the reliability target for each workload and size backup, storage or grid supply to meet it.
5. List every permit for generation, cooling and construction, and assign an owner and date to each.
6. Confirm fiber, water and access for heavy deliveries.
7. Plan the phases: how many 1 MW blocks the confirmed power supports today, and what must happen before the next phase.

A site that answers these questions with documents, not assumptions, is ready for a serious modular design discussion.

Plan a modular project on site power

QIT develops liquid-cooled modular GPU data centers for phased 5–10 MW sites in Texas, with a preference for existing powered properties. Our factory-integrated containers install on a prepared site in 15 hours; on a behind-the-meter site, permits and power agreements set the schedule, not the build.

Continue with the Texas site selection checklist, powered land versus powered shell, how bitcoin miners are moving to AI and HPC and the modular data center guide. Then send us a site brief.