NorthWestern tells PSC to throw out data center complaint
Keila Szpaller
(Daily Montanan) NorthWestern Energy wants the Public Service Commission to throw out a complaint by a coalition of advocacy groups asking regulators to investigate the utility’s plans for data centers.
But the groups that filed the complaint said doing so would mean the PSC cuts out the public from the discussion and shirks its “obligation and authority” to ensure existing customers aren’t “adversely impacted” by the data centers — as the law requires.
In November, Earthjustice filed the complaint on behalf of a broad coalition including advocates for senior citizens, for clean and affordable energy, and for social justice.
The complaint said NorthWestern Energy, the state’s largest public utility, entered into letters of intent to provide as much as 1,400 megawatts of electricity to three data center developers in Montana, roughly double its current average.
NorthWestern Energy has since announced it is in discussion with at least 11 entities regarding data center development, including ones in Montana.
The groups said costs for needed upgrades to deliver that electricity could be passed onto existing customers “without appropriate cost allocation.” They said researchers predict deals with data centers will increase electricity bills from 8% to 25% nationwide by 2030.
But the groups said NorthWestern doesn’t plan to seek review from the Public Service Commission until after it has executed electricity supply contracts, which they allege is against the law.
In a motion to dismiss the complaint filed Feb. 24, NorthWestern said it isn’t supplying any electricity to data centers just yet, and the groups are complaining about a situation that isn’t reality.
Although NorthWestern acknowledged it has signed letters and has development agreements in place with potential data center customers, it said it doesn’t know exactly how much power will be needed.
The utility said it already has committed to filing service agreements with the PSC for its review and approval. NorthWestern said it could structure those agreements so the service date is in the future, after PSC approval, or it could have PSC approval as a condition of a contract.
“Complainants gloss over the difference between signing an agreement for electricity supply service and actually providing electricity,” NorthWestern said.
This week, the groups requesting an investigation again called on the PSC to assert its authority to protect ratepayers. They are asking the PSC to force NorthWestern to answer the allegations in the complaint.
The groups also argue the process NorthWestern wants — one they allege ignores the utility’s step-by-step plan to serve data centers — would shut out a required statutory process. In doing so, they argue it would “extinguish” the public’s ability to participate in these discussions, a right enshrined in the Montana Constitution.
The groups said its members include captive customers of the monopoly utility, and state law requires the PSC to confirm the data centers won’t have a negative impact on other customers before serving them.
It said NorthWestern’s plan to submit its own tariff proposal — to set components such as price, terms and conditions — for data centers “limits the scope of the Commission’s review” and cuts out the public. The groups also said the PSC should exercise its authority in the case.
“NorthWestern’s motion … fails to acknowledge that it is in the public interest for the Commission to act now and open the investigation requested by the Complaint — rather than later, after the utility is delivering megawatts to data centers,” the groups said.
NorthWestern Energy could not be reached for comment Tuesday about the plan to file the tariff proposal.
The groups said the PSC could impose mandatory tariff terms for data center customers, create a customer class to ensure existing ratepayers are protected, or initiate a case proceeding to evaluate the issues in the complaint.
They said resolving the issues now will allow the PSC to protect ratepayers and “set the standard by which NorthWestern will serve data centers and streamline subsequent proceedings.”
The PSC earlier found the complaint complied with its requirements and directed NorthWestern to address it, but it also said the utility could file a motion to dismiss, as it did. That motion is pending before the Commission.
PSC spokesperson Jamey Petersen said Tuesday questions about data centers have been raised in multiple dockets.
“The Commission is reviewing them deliberately to determine the best forum and tools available under statute, including existing provisions that address service to large loads and require just and reasonable rates for all customers,” Petersen said in an email.
She said legal and regulatory staff are working to bring the complaint to the Commission potentially in April, “subject to scheduling and notice requirements.”
The groups that filed the complaint are Big Sky 55+, Butte Watchdogs for Social and Environmental Justice, Climate Smart Missoula, Golden Triangle Resource Council, Helena Interfaith Climate Advocates, Honor the Earth, Montana Environmental Information Center, Montana Public Interest Research Group, and NW Energy Coalition.