Fitch Ratings warns behind-the-meter data centers increase operational risk

The move toward behind-the-meter data centers represents a fundamental shift in how streaming infrastructure is powered and financed. By decoupling from the public grid, operators gain speed to market but lose the safety net of utility-managed reliability, making uptime entirely dependent on private power generation. For the streaming ecosystem, this could lead to a bifurcated infrastructure landscape where AI-heavy workloads are siloed in self-powered hubs while traditional delivery remains grid-dependent. As these projects proliferate, the industry must watch for new project finance structures that bundle power generation assets with digital infrastructure as a single risk entity.

Fitch Ratings is not alone in flagging the operational complexity of behind-the-meter power arrangements for data centers. In September 2026, the U.S. Energy Information Administration reported that data center electricity consumption is projected to reach 12% of total U.S. electricity sales by 2028, up from roughly 4% in 2023, creating the interconnection bottlenecks that make behind-the-meter solutions attractive in the first place. Grid operators in PJM Interconnection and ERCOT have disclosed multi-year backlogs for large-load connections, pushing hyperscalers and colocation providers to pursue on-site generation as a faster path to capacity. For streaming infrastructure operators, this means the power procurement decisions made today will determine whether CDN points of presence and encoding clusters can scale on schedule or face delays tied to utility queues.

The financial structuring around these projects is evolving rapidly. In August 2026, Moody's Ratings published guidance noting that behind-the-meter data center projects carry elevated construction and fuel-supply risks compared with grid-connected facilities, particularly when natural gas turbines serve as the primary generation source rather than a bridge to grid power. The rating agency flagged that operators assuming maintenance responsibilities previously handled by utilities face unfamiliar cost curves, especially for turbine overhauls that can run $5 million to $15 million per unit on a five-year cycle. Fitch's September report aligns with this view, emphasizing that project finance structures must now account for power-generation asset depreciation alongside traditional data center shell and IT equipment.

For streaming and CDN operators specifically, the behind-the-meter trend intersects with broader infrastructure investment patterns. Equinix announced in July 2026 that it had committed $3.5 billion to new data center capacity in North America, with several sites incorporating on-site generation to accelerate deployment timelines. Digital Realty similarly disclosed plans for behind-the-meter gas generation at two new U.S. campuses. These moves matter for streaming because CDN density and edge compute placement depend on available powered capacity in metro areas. If behind-the-meter solutions become the default path to new capacity, streaming infrastructure buyers will need to evaluate counterparty power reliability as part of their vendor selection criteria, adding a layer of due diligence that did not exist when grid interconnection was assumed.