What state do you live in? Can't you just switch providers? It doesn't make sense, if they allowed 400A connection to your house, you're allowed to use all of it. Otherwise they will reject the connection to the transformer. Most residential transformer doesn't even allow connecting 400AMP from 1 house as typically you will need 500MCM cable which is too big for their connector Bus Bar. The work around is 6 smaller parallel cables. That was the issue at my house. Fortunately that transformer was overloaded and overdue to be upgraded so I got lucky and was able to hook up the 500MCM which is a FAT heavy Copper cable to the new transformer. I had no issues driving most of the 400AMP at 80% which is 320AMP. DMwardjr have similar configuration and was actually trying to go to 800AMP to 1000AMP for his house. Just tell them you're running a lot of servers at your house. Sounds like they're just trying to make more money from you.
I am in Indiana, and no, we do not have our pick of power companies like other areas do.
400A service minus 20% safety means 320A useable. I was just under at 300A.
The meter is rated as 320 amp continuous load.
With the supply cables, I was running safely at 300 amp.
I actually had a 2nd similar meter installed on my property that I wanted to expand into. It by my driveway. It is live but not being used.
They put in a new transformer on my property that has plenty of capacity.
They put in newer smart meters but I don't think they are communicating because I am out in the country.