Licencing question for custom declarative agent

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Posted on by Romain The Low-Code...

2,613 Super User 2026 Season 1

Hello everyone,

I hope this is the right distribution list : apologies if it isn’t, but my question does include a comparison with Copilot Studio licensing.

I’ve developed a custom declarative agent that primarily does the following:

-connects to APIs to retrieve data,

-interacts with Dataverse for reading and writing data,

-and connects to a custom MCP to generate live advanced rendering inside the chat windows and/or the right panel.

According to the licensing information here: https://learn.microsoft.com/en-us/microsoft-365/copilot/extensibility/cost-considerations, it states for users without copilot 365 licenses:

- No charges for agents with instructions only or those grounded solely in public data.

- Usage-based billing applies for shared tenant data usage, such as SharePoint or Copilot connectors.

Given this, I’d like to clarify whether connecting to external APIs and MCPs incurs any credit consumption, similar to Copilot Studio, which uses 5 credits for tool usage in orchestration mode. So : are API connections “free of charge,” aside from the direct consumption costs associated with their hosting?

Thank you for your help in clarifying this.

Regards,

Romain.

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Prasad-MSFT Microsoft Employee on at

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Connecting to external APIs and MCPs (Model Context Providers) in your custom agent does NOT incur usage-based Copilot credit consumption—as long as you are not accessing Microsoft 365 tenant data (like SharePoint, OneDrive, Outlook, or Dataverse) through Copilot connectors.

Credit consumption applies only when your agent accesses tenant data via Copilot connectors (e.g., SharePoint, Dataverse, Outlook, etc.), not for public APIs, external APIs, or MCPs that you own or manage.

Tool usage credits (like the 5 credits per tool call in Copilot Studio orchestration mode) are only consumed when using Copilot connectors to access tenant data, not for custom APIs or MCPs.

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Haque 2,944 on at

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Hi @Romain The Low-Code Bearded Bear,

Liked your profile name!

Can you please check if the following thread helps or not, most specifically - the post dated:

How are Copilot Credits calculated across different generative models in Copilot Studio

https://community.powerplatform.com/forums/thread/details/?threadid=bf20bd8c-4745-f111-88b5-7ced8dcd2480

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11manish 2,281 on at

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Based on current Microsoft guidance:

External API calls and custom MCP invocations in a declarative agent are generally NOT billed like Copilot Studio orchestration tool usage (for example, the 5-credit tool execution model).

The primary metered areas for declarative agents are tenant-grounded Microsoft data sources such as SharePoint, Graph, and Copilot connectors.

Your external MCP/API infrastructure still incurs its own hosting/runtime costs (Azure, API compute, Dataverse capacity, etc.), but those are separate from Copilot credit consumption.

However, Dataverse operations and premium Power Platform components still remain subject to their own licensing and API entitlement rules.

Also keep in mind that Microsoft’s MCP and agent licensing model is evolving quickly, so this area may change over time as declarative and autonomous agent capabilities converge further.

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Valantis 5,139 on at

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Hi @Romain The Low-Code Bearded Bear,

Prasad and 11manish are correct on the external API and MCP part. One thing worth flagging specifically for your setup since you mentioned Dataverse read and write:

Dataverse access from a declarative agent falls into the tenant data category. Microsoft docs confirm that usage-based billing applies when the agent accesses shared tenant data. Dataverse is considered tenant data, so read and write operations through your agent may trigger usage-based billing depending on how they're implemented.

If you're calling Dataverse directly via a custom API or Azure Function (not through a Copilot connector), that connection itself isn't billed as a Copilot credit. But if you're using a Copilot connector to reach Dataverse, that does count as tenant data access.

The external API calls and MCP connections are confirmed free of Copilot credit consumption as long as they don't route through Microsoft's tenant data connectors. Your hosting and compute costs for those are separate.

Given how fast this area is evolving, worth checking the cost considerations page you linked periodically as Microsoft is actively updating the billing model for declarative agents.

Best regards,

Valantis

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Romain The Low-Code... 2,613 Super User 2026 Season 1 on at

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@Valantis thanks for the answer, to complete : the dataverse connexion is through API from my MCP server.
And there is something i m not understanding in the microsoft documentation :
-> custom code declarative agent like this one -> can i could share it to user without copilot 365 (and consume copilot credit)
-> does the user need power apps premium licence to read the dataverse data ? (i m using connected user auth to read dataverse) ?

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Valantis 5,139 on at

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Hi @Romain The Low-Code Bearded Bear,

hope this answers your questions :)

1. Can users without M365 Copilot 365 license use your agent?
Yes, but only if your tenant has pay-as-you-go enabled. Microsoft docs confirm: declarative agents that access tenant data (which includes Dataverse) require either a M365 Copilot add-on license per user, OR the tenant has pay-as-you-go billing enabled for Copilot Chat. Without one of those two options, users without a M365 Copilot license will get a licensing error when they try to use the agent. Agents grounded only in instructions and public web are free for all M365 users, but yours accesses Dataverse so it falls into the metered consumption category.

2. Copilot credits for Dataverse via API from your MCP?
Since you're calling Dataverse through your own MCP server API (not through a Copilot connector), the Dataverse data access itself does not consume Copilot credits. The credit consumption is for the agent interaction/orchestration itself, not for how your backend fetches the data. So your architecture is the most efficient from a billing perspective.

3. Do users need Power Apps Premium to read Dataverse via connected user auth?
Since your MCP server calls Dataverse using the connected user's identity (delegated auth), the user needs to have a Dataverse environment security role granting them read access. However, this does NOT require a Power Apps Premium license. Power Apps Premium is required to build and run Power Apps on Dataverse, not to access Dataverse data through a custom API endpoint with delegated permissions.

So your end users just need to be members of the Dataverse environment with appropriate security roles.

Ref: https://learn.microsoft.com/en-us/microsoft-365/copilot/extensibility/cost-considerations

Best regards,

Valantis

✅ If this helped solve your issue, please Accept as Solution so others can find it quickly.

❤️ If it didn’t fully solve it but was still useful, please click “Yes” on “Was this reply helpful?” or leave a Like :).

🏷️ For follow-ups @Valantis.

📝 https://valantisond365.com/

💼 LinkedIn

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Romain The Low-Code... 2,613 Super User 2026 Season 1 on at

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thanks @Valantis this is awesome ! thanks a lot to all other who took time to answer too :)

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