High interest in data center discussion at Public Service Commission

Keila Szpaller

(Daily Montanan) Data centers want to open in Montana, but many groups worry the “large new loads” will end up costing other customers more.

In March, NorthWestern Energy filed a proposal with the Montana Public Service Commission to set a new tariff, or terms, for data centers, and this month, a host of different parties said they want to participate in the case.

Gov. Greg Gianforte, on behalf of the Department of Environmental Quality, said the state wants to intervene to be sure companies can bring “high paying jobs” to Montana, but to also ensure families won’t have to subsidize the centers.

Senior citizens are worried about people on fixed incomes having to pay more. Industrial customers want to be sure the costs are fair and don’t have hidden impacts.

Butte Watchdogs for Social and Environmental Justice are concerned about the lack of transparency in data center development — many of the documents provided about possible data centers are largely redacted.

The City of Missoula is wanting to create affordability, and city leaders want to be sure data centers don’t create an impediment.

“Montana’s average household energy burden is among the highest in the West, even before NorthWestern’s 2023 and 2025 rate increases,” the city said in its petition to participate in the case.

NorthWestern Energy has said it strives to keep energy affordable, and its plan for the new large loads addresses costs in a way that protects existing customers.

But a conservation watchdog said the initial proposal from NorthWestern gives the utility more control over data centers as opposed to regulators with oversight.

The Public Service Commission will take up the case, and a spokesperson earlier said the job of the commission is to ensure service to data centers won’t hurt other customers over the long term.

The deadline to ask to participate in the case was last week, and the following groups submitted petitions:

• Department of Environmental Quality: In a news release, Gianforte said the DEQ will request to intervene, and its participation would make sense because it would be in line with the work of the governor’s energy task force. Gianforte said the state’s interest is in balancing economic growth with fairness for existing customers — residential, commercial and industrial. The DEQ’s petition said through the Montana Major Facilities Siting Act, it has regulatory authority over certain large energy projects, including transmission infrastructure triggered by large loads. It said the DEQ supports “a clear, workable pathway to service on NorthWestern’s system.”
• Community and conservation organizations: Earthjustice filed a petition on behalf of multiple groups, Big Sky 55+, Butte Watchdogs, Honor the Earth, Montana Environmental Information Center, NW Energy Coalition, and others. For example, Helena Interfaith Climate Advocates said its group is concerned about low-income ratepayers and believes “access to affordable electricity is a basic need that needs to be protected.” But the groups said a tariff alone isn’t enough to protect residential customers; they said a separate customer class also needs to be created.
• Large Customer Group: This informal coalition of industrial energy customers includes Ash Grove Cement Company, Phillips 66, Calumet Montana Refining and others. This group said it needs reliable power. It wants to be sure the new tariff for data centers is consistent with Montana law. It also said the large loads may have impacts not identified in NorthWestern’s application, and those effects may become apparent as the case proceeds.
• Northwest and Intermountain Power Producers Coalition: This trade association includes independent power producers active in the West, and it wants to ensure a competitive electric power supply market. The group includes Grid United, Apex Clean Energy, Obsidian Renewables, Shell Energy North America, Morgan Stanley and more.
• City of Missoula and Missoula County: Missoula County said it needs to protect itself and its constituents from potential infrastructure costs of data centers. It also said it’s developing, along with the city of Missoula, Bozeman and NorthWestern Energy, a Green Power Program with tools that underwrite a clean energy facility. The county wants to know how significant load growth could affect its project and wants to explore considerations.

The Montana Consumer Counsel, which represents consumer interests in PSC proceedings, also will participate in the case.

A PSC spokesperson earlier declined to speculate on when a hearing would be held on the new tariff proposal.