Hyperscale build-to-suit leases dominantly use full pass-through (the tenant pays the actual utility bill). Colocation leases use capacity-based pricing ($/kW/month with a defined power allocation). The lease structure determines who bears power-price risk and how lenders model net cash flow volatility.
Three power pricing structures
Full pass-through transfers all power-price risk to the tenant in exchange for a lower base rent. Capacity-based pricing has the operator earn the spread between the contracted $/kW and the actual utility bill, which carries operating risk if utility rates spike. Metered pricing has the tenant pay actual metered consumption at a contracted rate, splitting the risk.
Lenders look at the lease pass-through structure carefully because it determines the volatility of net cash flow. A capacity-based lease in a market with rising regulated electricity rates can compress operating margins meaningfully; a full pass-through lease insulates the landlord but caps upside.
Sources
- 2024 United States Data Center Energy Usage Report · Lawrence Berkeley National Laboratory (LBNL) · 2024
- Electric Power Monthly & Annual Energy Outlook · U.S. Energy Information Administration (EIA) · 2026-Q1