For decades, the formula for commercial real estate development in Ohio was relatively straightforward: secure the land, navigate local zoning, map out the infrastructure, and submit a standard utility hookup request. In today’s market, particularly across Central Ohio, that traditional playbook is increasingly insufficient.
Driven by the rapid growth of hyperscale data centers, high-tech manufacturing, and AI infrastructure, the regional electrical grid is facing a significant capacity crunch. For developers, this means a standard utility request is no longer guarantees timely service. Instead, it can lead to multi-year delays that stall a project before the foundation is even poured.
To ensure day-one operational power, developers are re-examining how they source energy. At the center of this shift is a complex legal frontier: Behind-the-Meter (BTM) power solutions.
The New Reality: Navigating BTM and Private Infrastructure
When the traditional grid cannot deliver the necessary capacity on a project’s timeline, one solution is to bring the infrastructure to the site. Developers are increasingly integrating on-site substations, private microgrids and localized generation directly into their project designs.
This shift from utility consumer to energy infrastructure coordinator introduces a range of legal considerations:
- Multi-Party Utility Agreements: Standard, one-size-fits-all utility contracts cannot handle the nuances of heavy on-site infrastructure. Highly customized, multi-party agreements are increasingly needed to define where the utility’s responsibility ends and the developer’s begins.
- Complex Power Purchase Agreements (PPAs): Projects that rely on localized or co-located generation typically require a well-structured PPA. These agreements must balance pricing predictability, minimum delivery guarantees, and default remedies over multi-decade horizons.
- Easement and Land Use Structures: On-site substations and private transmission lines require carefully drafted easement frameworks that protect the long-term operational integrity of the energy assets without clouding title or restricting the future flexibility of the broader real estate asset.
Managing Regulatory Risk in a Grid-Constrained Market
Building a private energy framework means navigating a range of regulatory considerations. Every BTM strategy should be evaluated against local and state energy authority requirements to help ensure the project does not inadvertently qualify as an unregulated public utility, a misstep that can trigger severe compliance penalties and project delays.
These energy arrangements also need to be integrated with a project’s broader real estate legal strategy, so that corporate structuring, joint venture agreements, purchase and sale agreements, and tenant leases all align with the realities of the on-site power framework.
The Bottom Line
As Ohio’s commercial development landscape continues to evolve, securing a site’s energy future is becoming as much a legal risk management consideration as an engineering one. Developers underwriting speculative industrial parks, planning mixed-use campuses, or positioning assets for high-demand tech tenants are increasingly factoring BTM frameworks into early-stage project planning.
To discuss further, contact KJK Real Estate attorney Chris Macke (CMM@kjk.com).