Power Pass-Through

Power pass-through is a billing model in which a data center operator charges the tenant for metered electricity at the utility cost plus a defined fee, instead of bundling power into the rent. The tenant pays the actual kilowatt-hours consumed by its IT load, and usually the cooling overhead as well, which the operator typically allocates through the facility PUE. A PUE of 1.3, for example, means each IT kilowatt-hour is billed as roughly 1.3 kilowatt-hours. Pass-through is standard in wholesale and hyperscale leases and is increasingly offered in retail colocation, because it shields the operator from tariff swings and rewards efficient tenants. It makes the price per kW comparable only when the contract also states the tariff basis and any administrative markup.