Behind-the-Meter GPU Deployments and Plant Risk

A behind-the-meter GPU deployment takes its power from a generator on or next to the site instead of through the utility's meter. It skips the grid queue but puts the whole site on one plant, one fuel supply and one set of permits.

Lenders underwrite the plant as part of the GPU credit, because the offtake only pays while the plant runs.

What behind-the-meter means

Behind-the-meter power is electricity made on or beside the site and used there without passing through the public grid. The meter is the line between the utility's system and the customer's. Generation on the customer's side of it is behind the meter.

Power reaches GPUs by one of two paths:

• Grid-connected. Power plant -> transmission -> utility substation -> meter -> site transformer -> GPUs.
• Behind the meter. Generator or plant -> site switchgear -> transformer -> GPUs, with a grid tie as backup or none at all.

Why operators skip the grid

Grid power takes years, and the equipment to connect to it is back-ordered. As of 2026, the parts a new site needs carry these lead times: ^{[1]CRE Daily, "Data Center Construction Costs Jump 21% Since 2024," on the Cushman & Wakefield 2026 Data Center Development Cost Guide (August 27, 2026)https://www.credaily.com/briefs/data-center-construction-costs-jump-21-since-2024/}

• Pad-mounted transformers: 68-113 weeks
• Generators: 60-100 weeks
• Medium-voltage switchgear: 38-63 weeks

Big turbines are scarcer. GE Vernova's gas power backlog and slot reservations rose from 83 GW to 100 GW in the first quarter of 2026. ^{[2]GE Vernova, first quarter 2026 results press release, SEC Form 8-K exhibit (April 22, 2026)https://www.sec.gov/Archives/edgar/data/0001996810/000199681026000063/gevpressrelease1q26.htm} Its CEO put lead times on new heavy-duty turbine orders at about three years. ^{[3]Power Engineering, "Data centers drive record surge in GE Vernova power equipment orders as turbine slots tighten through 2030" (April 23, 2026)https://www.power-eng.com/gas/turbines/data-centers-drive-record-surge-in-ge-vernova-power-equipment-orders-as-turbine-slots-tighten-through-2030/}

So operators go where power already exists: a gas well with no pipeline, a wind farm with output the grid will not take, a plant with spare capacity. The queue itself is covered in how power reaches an AI data center.

Where behind-the-meter power comes from

Each power source trades the grid queue for a different risk, and the lender underwrites that risk.

Flared gas

Oil wells produce gas that often has no pipeline, so producers burn it off, which is called flaring. The World Bank counted 167 billion cubic meters flared worldwide in 2025, about $54 billion of wasted gas. ^{[4]World Bank, Global Gas Flaring Tracker press release on 2025 flaring (June 23, 2026)https://www.worldbank.org/en/news/press-release/2026/06/23/global-gas-flaring-rises-energy-security}

Crusoe built a business on it. When it agreed to sell its bitcoin mining arm to NYDIG on March 25, 2025, that arm had deployed more than 425 modular data centers, over 250 MW, across seven U.S. states and Argentina, powered by gas captured at oil fields. ^{[5]Crusoe, "NYDIG to acquire Crusoe's bitcoin mining operation" (March 25, 2025)https://crusoe.ai/newsroom/nydig-to-acquire-crusoes-bitcoin-mining-operation-crusoe-to-scale-vertically/} The gas volume is tied to the well, and the sites are remote.

Curtailed renewables

Curtailment is when the grid operator tells a wind or solar farm to cut output because the grid cannot take it. Soluna's Project Dorothy sits behind the meter at a 150 MW Texas wind farm and buys power the farm would otherwise curtail. ^{[6]Soluna, "ERCOT Grants Soluna Green Light to Energize Project Dorothy Data Center" (April 20, 2023)https://www.solunacomputing.com/news/ercot-grants-soluna-green-light-to-energize-project-dorothy-data-center/} The power is cheap and arrives only when the wind blows and the grid declines it, which suits workloads that can pause.

Co-location with an existing plant

Co-location puts the data center beside a running plant and takes power before it reaches the grid. Talen Energy did this for an AWS campus at its Susquehanna nuclear plant in Pennsylvania. The risk is federal and state approval of the arrangement, covered below.

New on-site turbines

The operator runs its own gas turbines, as xAI did at its Colossus site in Memphis. Fuel supply and air permits become the operator's problem, as the natural gas explainer describes.

What happens when the plant fails

A behind-the-meter site has one power plant, and when it stops, every GPU stops. On June 11, 2022, a storm in Hardin, Montana damaged the cooling towers of the power plant supplying Marathon Digital's bitcoin miners there. About 30,000 miners, over 75% of Marathon's active fleet, lost power. ^{[7]Marathon Digital Holdings, "Provides Update on Its Bitcoin Mining Operations in Montana" (June 28, 2022)https://ir.mara.com/news-events/press-releases/detail/1287/marathon-digital-holdings-provides-update-on-its-bitcoin-mining-operations-in-montana}

Initial tests showed most miners undamaged. The plant might restart at reduced capacity as early as the first week of July, and Marathon weighed moving the fleet to other hosts. ^{[7]Marathon Digital Holdings, "Provides Update on Its Bitcoin Mining Operations in Montana" (June 28, 2022)https://ir.mara.com/news-events/press-releases/detail/1287/marathon-digital-holdings-provides-update-on-its-bitcoin-mining-operations-in-montana}

The machines survived and the revenue did not. A lender holding those miners as collateral had intact hardware and no cash flow.

When the fuel stops

A gas generator is only as reliable as the gas reaching it. In the February 2021 Texas freeze, freezing equipment caused 44.2% and fuel supply problems 31.4% of unplanned generating unit outages, derates (forced cuts in output) and failures to start, according to the joint staff report of FERC, the federal power regulator, and NERC, the North American grid reliability body. ^{[8]T&D World, "Final Report on February 2021 Freeze Underscores Winterization Recommendations," on the FERC-NERC joint staff report (November 17, 2021)https://www.tdworld.com/disaster-response/article/21181510/final-report-on-february-2021-freeze-underscores-winterization-recommendations}

Gas from the same basin, piped or flared, is exposed to the same storm. A site with gas generation and no grid tie has no second source to fall back on.

Regulators can change the deal

Behind-the-meter arrangements depend on approvals that can be denied, narrowed or rewritten after the site is built.

FERC and the Talen co-location fight

In November 2024, FERC voted 2-1 to reject an amended agreement that would have raised the co-located load at Susquehanna from 300 MW to 480 MW. ^{[9]Renewable Energy World / Power Engineering, "FERC rejects amended interconnection agreement for Amazon data center at Susquehanna nuclear plant" (November 4, 2024)https://www.renewableenergyworld.com/news/ferc-rejects-amended-interconnection-agreement-for-amazon-data-center-at-susquehanna-nuclear-plant/} It rejected it again in April 2025. ^{[10]ANS Nuclear Newswire, "FERC denies Talen-Amazon agreement, again" (April 16, 2025)https://www.ans.org/news/2025-04-16/article-6937/ferc-denies-talen-amazon-agreementagain/}

Utilities argue that co-located load avoids paying for a transmission system it still relies on. A declaration filed with a protest by Exelon and AEP, two utility owners, said the AWS campus could avoid up to $140 million a year in transmission costs that other customers would pick up. ^{[9]Renewable Energy World / Power Engineering, "FERC rejects amended interconnection agreement for Amazon data center at Susquehanna nuclear plant" (November 4, 2024)https://www.renewableenergyworld.com/news/ferc-rejects-amended-interconnection-agreement-for-amazon-data-center-at-susquehanna-nuclear-plant/}

The existing 300 MW arrangement continued. ^{[9]Renewable Energy World / Power Engineering, "FERC rejects amended interconnection agreement for Amazon data center at Susquehanna nuclear plant" (November 4, 2024)https://www.renewableenergyworld.com/news/ferc-rejects-amended-interconnection-agreement-for-amazon-data-center-at-susquehanna-nuclear-plant/} In June 2025, Talen switched to a 1,920 MW sale to AWS through the grid, in front of the meter, running to 2042. ^{[11]Utility Dive, "Talen to sell Amazon 1.9 GW from Susquehanna nuclear plant" (June 11, 2025)https://www.utilitydive.com/news/talen-amazon-aws-susquehanna-nuclear-data-centert/750440/} For a lender, the approved load is the ceiling. Revenue that depends on load still awaiting approval is speculative.

What Texas SB 6 requires

Texas wrote its large-load rules into law with Senate Bill 6 (SB 6), signed June 20, 2025, for loads of 75 MW and up. ERCOT, the Texas grid operator, and the PUCT, the state utility commission, apply them. ^{[12]Bracewell, "Texas Senate Bill 6 ushers in major overhaul of large load interconnection and grid access rules" (July 9, 2025)https://www.bracewell.com/resources/texas-senate-bill-6-ushers-in-major-overhaul-of-large-load-interconnection-and-grid-access-rules/}

• Large loads interconnected after December 31, 2025 must install equipment that lets ERCOT curtail them during firm load shed, the rolling blackouts ERCOT orders in an emergency.
• From September 1, 2025, a new net-metering deal between an existing plant and a co-located large load, where the load nets its use against the plant's output, needs an ERCOT study, up to 120 days, and a PUCT decision within 60 days of the study.
• Customers disclose on-site backup generation equal to at least half their load.
• An initial interconnection screening study costs at least $100,000.

A single GPU cluster rarely crosses the threshold. 128 DGX B300 servers, 1,024 GPUs, draw about 1.9 MW at NVIDIA's 14.5 kW spec. ^{[13]NVIDIA, "Introduction to NVIDIA DGX B300 Systems," DGX B300 user guide (2025)https://docs.nvidia.com/dgx/dgxb300-user-guide/introduction-to-dgxb300.html} The rules land on the host site, so a lender checks whether the host is a large load and what it has agreed to curtail.

How plant risk reaches the loan

The GPU loan is repaid from the offtake, and the offtake pays for uptime. The chain runs: plant trips -> GPUs go dark -> the SLA (service level agreement) is breached -> the customer takes service credits -> a long outage lets the customer terminate -> debt service stops.

The termination step is written into real contracts. A GPU services contract between HPE and a Soluna subsidiary, filed with the SEC in 2024, lets the customer terminate after six consecutive months of SLA breach. ^{[14]HPE / Soluna AL CloudCo, GPU Infrastructure-as-a-Service and HPC & AI Cloud Services Agreement, SEC Exhibit 10.105 (2024)https://www.sec.gov/Archives/edgar/data/64463/000149315224032123/ex10-105.htm}

Who owns the generators

The generators on a behind-the-meter site may not belong to the borrower. Ownership decides whether a GPU lender can keep the site running after a default.

In the last two rows, the borrower can be current on its loan and still lose power because the plant owner defaulted on someone else's. The site lease and waiver terms are in how to finance a modular data center.

The insurance gap

Property insurance on the GPUs pays nothing when the plant fails and the servers are intact. Business interruption cover responds to an off-site power failure only with an endorsement, and a fuel cutoff with no physical damage usually leaves nothing to claim. Insuring modular data centers covers which policy responds to what.

References

1. CRE Daily, "Data Center Construction Costs Jump 21% Since 2024," on the Cushman & Wakefield 2026 Data Center Development Cost Guide (August 27, 2026)
2. GE Vernova, first quarter 2026 results press release, SEC Form 8-K exhibit (April 22, 2026)
3. Power Engineering, "Data centers drive record surge in GE Vernova power equipment orders as turbine slots tighten through 2030" (April 23, 2026)
4. World Bank, Global Gas Flaring Tracker press release on 2025 flaring (June 23, 2026)
5. Crusoe, "NYDIG to acquire Crusoe's bitcoin mining operation" (March 25, 2025)
6. Soluna, "ERCOT Grants Soluna Green Light to Energize Project Dorothy Data Center" (April 20, 2023)
7. Marathon Digital Holdings, "Provides Update on Its Bitcoin Mining Operations in Montana" (June 28, 2022)
8. T&D World, "Final Report on February 2021 Freeze Underscores Winterization Recommendations," on the FERC-NERC joint staff report (November 17, 2021)
9. Renewable Energy World / Power Engineering, "FERC rejects amended interconnection agreement for Amazon data center at Susquehanna nuclear plant" (November 4, 2024)
10. ANS Nuclear Newswire, "FERC denies Talen-Amazon agreement, again" (April 16, 2025)
11. Utility Dive, "Talen to sell Amazon 1.9 GW from Susquehanna nuclear plant" (June 11, 2025)
12. Bracewell, "Texas Senate Bill 6 ushers in major overhaul of large load interconnection and grid access rules" (July 9, 2025)
13. NVIDIA, "Introduction to NVIDIA DGX B300 Systems," DGX B300 user guide (2025)
14. HPE / Soluna AL CloudCo, GPU Infrastructure-as-a-Service and HPC & AI Cloud Services Agreement, SEC Exhibit 10.105 (2024)