Digital Infrastructure

Sheppard advises digital infrastructure sector clients on corporate transactions and strategic alliances involving data centers and broader digital platforms, where business models and risk allocation are evolving quickly. We implement innovative, market-responsive structures for joint ownership and collaboration—tailoring governance, capital contribution, transfer restrictions and equity arrangements to match hyperscale and colocation dynamics, phased development and platform expansion strategies. We also handle acquisitions and sales of projects and portfolios, supported by rigorous diligence and documentation that account for both development risk and operational considerations, enabling clients to execute transactions efficiently and build scalable digital infrastructure businesses in a changing landscape.

Our financing practice for digital infrastructure supports sponsors, developers, investors and lenders across the full capital stack. We advise on alternative financing structures tailored to evolving business models, including bespoke credit facilities, structured finance, hybrid debt arrangements and platform financings supporting build-to-suit and multi-site expansion. We also guide clients through related credit support obligations guarantees, letters of credit, performance security, parent support, reserve mechanics and other financial assurance—to allocate risk in a commercially workable, financeable way.

Sheppard’s tax lawyers are recognized industry leaders in the tax equity space. We have helped sponsors and investors navigate and monetize tax and production tax incentives for energy projects since the 1990s. We advise developers and tax equity investors on special allocations in partnership arrangements, implementing tax advantaged financing and acquisition techniques, sales tax issues, real estate tax issues and international tax planning. We represent clients on transactions of all size, geography, technology and legal/commercial structures.

Our transactional real estate team supports the full lifecycle of energy and digital infrastructure assets—from early site identification through development, operations and exit. In the power sector, we routinely structure and negotiate the site control and ownership arrangements that underpin bankable projects, including options, leases and easements, complex acquisitions and dispositions and long-term ground leases. We also advise on transaction structures that align operational control with capital strategy, including OpCo/PropCo and other platform-level arrangements used for development, portfolio aggregation and efficient capital deployment.

We guide clients through entitlements, planning and zoning processes, building and infrastructure approvals and the local agreements and conditions that often determine whether a site can be delivered on schedule and expanded over time. We help align permitting strategy with a project’s technical needs—such as campus phasing, resilience requirements and infrastructure corridors—while keeping stakeholders focused on practical outcomes and predictable timelines.

We offer integrated environmental support tailored to the siting, permitting, construction and operation of digital infrastructure assets. Our team advises on key environmental compliance and risk issues that commonly affect schedule and bankability—such as air and water requirements, hazardous materials, wetlands and species considerations, legacy site conditions and ongoing operational compliance—helping clients develop practical strategies for diligence, permitting, mitigation and stakeholder engagement.

Our energy lawyers are experts in offtake agreements and other revenue contracts of all types, including behind-the-meter (islanded and grid-connected) and front-of-the-meter power supply arrangements for digital infrastructure and data center projects. We routinely represent project sponsors and developers, commercial and industrial customers, investor-owned utilities, community choice aggregators, municipal utilities and cooperative utilities in the negotiation, structuring and contracting of power supply and offtake transactions with respect to a range of power generation assets, including gas-fired power generation facilities, wind and solar-powered generation facilities, battery storage systems, geothermal facilities and coal-fired generation facilities. 

We have negotiated power purchase arrangements in every independent system operator/regional transmission operator in the United States, including CAISO, ERCOT, SPP, PJM, NYISO, ISO-NE, and the bilateral WECC markets, and are deeply familiar with power purchase agreements (PPAs), virtual power purchase agreements (VPPAs), tolling agreements and other gas supply arrangements, revenue puts, heat rate call options, capacity and resource adequacy transactions, physically- and financially-settled hedging arrangements, bulk power sales, busbar sales and hub-settled power sales. 

We also negotiate the full commercial and contractual spectrum in the hydrocarbon value chain, including long term take-or-pay arrangements, index-linked pricing mechanisms, market-responsive pricing mechanisms, pipeline transportation and offtake and refinery offtake and lifting agreements. We represent clients across energy markets and understand the structures and requirements for financeability. We have experience with the full range of generating technologies and represent qualifying facilities, as well as exempt wholesale generators. In addition to our work on power sales and in hydrocarbon markets, we represent clients in transactions for the purchase and sale of renewable energy credits (RECs), renewable index numbers (RINs), voluntary carbon credits and other environmental products.

Our energy regulatory team helps clients navigate the federal and state rules across the nation that determine how power and load is interconnected to the distribution or transmission grid and how power is delivered and consumed—whether developing generation to power data centers directly such as behind the meter or indirectly such as in front of the meter and requiring transmission service for delivery. We focus on the speed-to-power pathway: load interconnection applications, load studies, deposits and other financial commitments, generation interconnection and means to pair generation with load in studies, and the contractual and tariff-based arrangements needed to secure power from the grid, aligned with development timelines and transmission expansion plans.

We also bring significant natural gas regulatory capability for data centers relying on conventional generation or hybrid solutions. We advise on infrastructure to gather, process, transport, store and export natural gas and related commodities and represent clients on pipeline matters before FERC, the Department of Energy, and other federal and state agencies, courts and tribunals. With decades of experience across pipelines, storage, LNG and natural gas transportation, we provide practical, strategic guidance in a rapidly evolving regulatory environment. We leverage our natural gas experience to shape commercial strategies and contracting with data centers and to deliver natural gas to fuel generation which can include separate pipeline services.

We provide a one-stop shop from project inception through commissioning and closeout. We help clients convert stringent delivery and uptime requirements into clear contracting, scope definition and risk controls from preconstruction through turnover.

We draft and negotiate the agreements that drive delivery—build-to-suit agreements, design-build/ EPC, architect and engineer, trade packages and major equipment procurement (including long-lead items)—and we address the remedies and performance frameworks that matter most to owners, operators and capital providers.

Our work is informed by the technical realities that make these projects different: redundancy planning, physical and cyber security requirements, and the integration of mechanical/cooling infrastructure and electrical infrastructure (including substations, switchgear, generators, UPS systems and commissioning protocols). We help ensure that construction documents, procurement strategies, and change management processes align with the intended resiliency tier, phasing plan and future expansion needs—while maintaining commercial clarity around interface risk, testing and acceptance, delays and liquidated damages.

In digital infrastructure, cybersecurity and digital security are operational requirements—not just compliance checklists—with a focus on practical controls that work in mission-critical environments. We advise on cybersecurity governance, third-party and supply-chain risk, incident preparedness, and embedding cyber requirements into technology, procurement and services agreements—helping align operational realities with evolving regulatory and counterparty expectations.

We help owners, operators, developers and customers address security as a core commercial and operational feature. We negotiate security terms in colocation and hyperscale arrangements, including security standards and controls, audit rights, physical access and monitoring, incident notification and cooperation, data handling and retention, and clear responsibility matrices across landlords, operators, managed service providers and tenants.

We also manage and advise on the legal issues and requirements arising from cybersecurity and data privacy incidents, including breach response planning, incident investigations, regulatory notifications, contractual and customer communications, and defense and strategy in connection with government investigations and enforcement and related disputes. We focus on solutions that are operationally feasible and contractually enforceable—supporting resilience, business continuity and customer and counterparty confidence where reliability and trust are foundational.

We have a substantial derivatives and structured products practice. We represent swap dealers, asset managers, financial intermediaries, hedge funds and end-users in deals ranging from highly structured transactions to more traditional trading or hedging transactions. We have a long track record representing sponsors, developers, lenders and project companies in both physical and financially settled transactions, often using the ISDA, EEI or NAESB documentation platforms. Many transactions hedge the long-term cost of power, project revenue flows and basis risk. Others monetize RECs and other environmental attributes. Sheppard is involved in transactions entered at each stage of the development process, which cut across every major market and involve a range of collateral packages, both on and off-balance sheet. We also advise project managers on ways to enhance value through the management and trading of generated electrons. The breadth of our experience and insights into the hedging markets provide a competitive advantage.

Expanding markets for energy storage are creating new opportunities in digital infrastructure. Our lawyers understand the interplay of demand response programs with storage technology and renewable energy with storage. We represent sponsors, financiers and utilities in distributed generation projects and are at the forefront of innovative financing strategies involving tax credit monetization for both solar and wind. We leverage this experience whenever energy storage solutions are involved, guiding our clients on storage scalability and cost reduction and counseling at each project phase. We know the concerns facing our clients, and we provide business-minded, practical advice to navigate financing, purchasing, tax, regulatory, technology, power agreement, construction, operation and maintenance and hedging issues. Our work in storage matters ranges from utility scale stand-alone storage, community-solar applications and dedicated, behind-the-meter storage applications.

Our team has more than 20 years of experience working on all types of Build Transfer Agreements (BTAs) across the U.S. We have worked on BTAs in the Northwest, California, the Southwest, the Rockies, the Midwest, Southeast and Northeast, including in the following markets: WECC, CAISO, MISO, ERCOT, SPP and PJM. These range from large solicitations as part of RFPs and integrated resource planning (IRPs), bespoke bilateral arrangements and as part of larger partnering initiatives such as portfolio joint development/joint venture arrangements. We work on all types of BTA structures, including construction-financed BTAs, progress or milestone payment BTAs (i.e., buyer-financed), NTP sales, completion sales, APA or PSA plus EPC structures and stand-alone BTAs. We are well versed in the unique regulatory requirements and approvals for BTAs, and how to structure these transactions in consideration of those regulatory hurdles.

Our capital markets team supports issuers and investors raising capital for digital infrastructure platforms and portfolios. We advise on public and private offerings, structured financings and compliance matters, helping clients access capital efficiently while managing disclosure, governance and regulatory requirements. Our approach is practical and execution-focused, aligning capital markets strategy with broader development and investment objectives.

Without reliable, scalable connectivity, even the best-powered site falls short. We advise on the telecommunications infrastructure that underpins data center operations, including fiber access, carrier agreements and network integration. Our team negotiates commercial arrangements with providers and helps structure connectivity solutions that meet latency, redundancy and expansion requirements. We focus on confirming connectivity is not an afterthought, but a fully integrated component of project design.

Even well-structured projects can encounter disputes, particularly when multiple stakeholders, tight timelines and complex technical requirements coincide. We represent clients across construction, commercial and operational disputes, as well as in pre-litigation risk management. Our approach is pragmatic and outcome-focused: we resolve issues quickly where possible. Whether through negotiation, mediation, arbitration or litigation, we work to minimize disruption and keep projects moving forward.

Global supply chains and shifting trade policies increasingly influence data center development. Our lawyers advise on tariffs, trade compliance and cross-border considerations that affect equipment sourcing, procurement strategies and project economics. Our team helps clients anticipate regulatory changes and maintain flexibility in sourcing critical components. The goal is to support smoother delivery in an environment where supply constraints and policy shifts can have outsized impact.

As critical infrastructure, data centers now face heightened national security scrutiny. We advise on regulatory requirements and approvals affecting ownership, financing and operations, including foreign investment review and related compliance frameworks. Our team helps clients navigate these issues early in the project lifecycle to reduce execution risk and avoid delays. We work to confirm data center projects can move forward while meeting evolving government expectations and stakeholder concerns.