Evaluate a will-serve or capacity letter by its actual site, MW, dates, conditions, and obligations. The title alone does not establish reserved capacity or a guaranteed energization date; obtain written clarification of what the issuer is committing to before relying on it at land closing.
By Volterra Advisors · Last updated
Data center infrastructure illustration.
Read the letter as a set of testable statements
Site and issuer. Match the legal customer, parcel, service territory, utility contact, and proposed connection. Resolve a letter issued for a neighboring property or a different project.
MW and service basis. Identify initial and ultimate utility demand, voltage, reliability, load ramp, and any curtailment conditions. Reconcile the figures with the customer load letter; do not substitute IT MW for facility demand.
Dates. Record the issue date, assumed in-service date, initial and full-load milestones, and the evidence supporting each. Ask what is an estimate and what is a contractual obligation.
Conditions and upgrades. List unfinished studies, utility approvals, agreements, deposits, equipment, easements, permits, and network upgrades. Assign an owner and a cost allowance to each dependency.
Expiry and change rules. Confirm any expiration, reservation period, renewal steps, assignment restrictions, and the effect of changes to ownership, load, ramp, or site plan.
Financial and contractual exposure. Review construction contributions, security, minimum-demand obligations, termination terms, and the documents that actually govern service. Ask the issuer and transaction counsel to resolve unclear commitments.
Use it before land closing
First, send a marked-up checklist to the issuer and obtain written answers. Next, have the electrical adviser reconcile the letter with the development load and power plan. Finally, align the purchase agreement’s diligence and closing conditions with the evidence still outstanding; preserve the dated letter, response, and underlying documents in the decision record.
A preliminary feasibility response may be useful without being the final service agreement. Dominion’s published process offers preliminary site evaluation and a will-serve letter while also describing later infrastructure work. Avoid treating those distinct stages as interchangeable.
Red flags and related evidence
Pause reliance on a letter with no defined MW, no identifiable site, an unexplained date, missing attachments, undisclosed upgrade costs, or expired conditions. A seller’s summary should not replace the issuer’s document.
No universal commitment follows from the title. Confirm the particular document’s scope, whether capacity is reserved, and which conditions or later agreements control service.
What should the MW statement distinguish?
Distinguish utility demand from IT demand, initial from ultimate capacity, and any phased, conditional, or restricted service from the intended operating requirement.
What if the letter has no expiry date?
Ask the issuer how long its assumptions and any reservation remain valid, what can change the response, and when written reconfirmation is required.
Can the letter transfer with the land?
Do not assume so. Obtain the issuer’s written position on assignment, customer-entity changes, and whether a new request, approval, or agreement is required.
Should the letter be reviewed before closing?
Yes. Reconcile it with engineering and the land transaction’s conditions while there is still an opportunity to resolve missing evidence or reconsider the commitment.
