Data Centers: Threats to Water and Energy Bills
While data center projects may appear promising at first glance — touting the potential for economic growth and infrastructure investment — the processes that safeguard our environment, electricity bills, public health, and infrastructure are being trampled by the overeager juggernauts of “opportunity.”
Many communities in the U.S. have already pushed back on data center development or suffered harm following their development, and Montanans are joining the fray.
MEIC is dedicated to ensuring that folks are educated about what data centers are, what they could mean for Montana communities, and what sideboards are needed to keep them from using inordinate amounts of water and energy, raising electricity prices, and running roughshod over Montana governance agencies.
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What is a data center?
A data center is a broad term generally used to describe warehouses of computing equipment dedicated to a particular service. While data centers have been around for decades, the rise of cryptocurrency mining and artificial intelligence (AI) have increased the demand for single-purpose data centers.
To put it bluntly, if you use the internet, you’re using data centers. If you have cloud storage or email, that data is stored in data centers. These “traditional” or “retail” data centers have existed in Montana for decades, typically needing about 1 MW of electricity. Even with website retrieval, data storage, etc. the bulk of energy use is typically on the end-user side. This even holds true for more energy-intensive activities like streaming video and audio. To be clear, if you are streaming a TV show online, the device you’re streaming on is using more energy than the data center in that relationship.
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Why are data centers a problem now?
The rise of mining cryptocurrency and “generative AI” or “gen-AI” have increased demand for data centers. Around a decade ago, cryptocurrency mining data centers started to come to Montana, significantly raising the demand for energy. The AI projects currently proposed for Montana dwarf the crypto mining projects. Quantica, an AI data center proposed for Broadview, MT, wants up to 1000 MW of power for its data center. All of NorthWestern customers currently need about 75 average MW of electricity.
These energy demands threaten to become a climate, water, and energy disaster.
- Cryptocurrency is a virtual currency that only exists as computer code. Proponents of crypto tout its decentralized nature and “secure” transactions through a public ledger called “the blockchain” that construct a financial system apart from the world’s traditional banking systems. Through a computational process called “mining,” users can sometimes earn cryptocurrency without having to buy it outright. Huge facilities are dedicated to this mining, and the process is incredibly energy intensive.
- Gen-AI platforms are able to generate images, imitate human speech, read and write emails, or even have chat conversations with humans on the other end. The intensive computing demand of generative AI means that data centers are no longer just warehouses that store data for many users; rather, they use huge amounts of energy to create images, videos, and sounds from compiled art and content (often harvested without permission or compensation). With AI, the tool uses an incredible amount of energy before the consumer even interacts with it, and then huge amounts again when prompted by a consumer.
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Data centers in Montana
In December 2024, Montana’s monopoly utility NorthWestern Energy announced plans to supply 400 megawatts of electricity to two data centers beginning in 2026 and 2027. NorthWestern’s current annual load is about 750 average megawatts, making this proposal a more than 50% increase in annual demand for energy.
The announcement rightfully raised concerns across the state, including from the Montana Public Service Commission (PSC) and organizations like MEIC. Since that time, MEIC and a number of nonprofit organizations and citizen groups have pushed back against the unreasonable, unregulated plans that NorthWestern Energy is making to cater to data centers.
Butte residents became extremely concerned about a data center proposal in the city when it came out that Sabey Data Centers had been in conversation with Butte-Silver Bow County Commissioners for more than a year. This video documents a community conversation to discuss the proposal from Sabey Data Centers.
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Environmental Impact
Data centers can be a nightmare for water resources and the climate.
- Just one data center can consume as much as five million gallons of water in a day between on-site use for cooling and off-site use for energy generation.
- The majority of water consumed on-site at data centers is drinking water grade — and one big tech company’s scope-1 water consumption in 2023 was roughly equivalent to a major beverage company.
- Data centers are warehouses of electronics running at high temperatures and are prone to fires. In Ohio, two Amazon data centers called out the fire department 84 times in one year (2021) and those two data centers pay zero in property taxes. In Montana, data centers have incredibly low property tax rates which are unlikely to cover the true costs to the community.
- The Great Oak subdivision lies approximately 600 feet from an Amazon Web Services (AWS) data center cluster in western Prince William County, Virginia. Since 2022, residents have complained of constant, low-frequency industrial noise disrupting their sleep and shaking their homes.
- One cryptocurrency operation reinvigorated the Hardin Generating Station, a 115-megawatt coal-fired power plant that was on the brink of closing after NorthWestern Energy declined to acquire the plant in 2018. Shortly thereafter, the plant was purchased by a cryptocurrency company and now it appears to exist solely to provide electricity to mine cryptocurrency.
Open this fact sheet for more environmental, energy, and economic impacts.
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Energy Concerns
Data centers are energy hogs. They can impact neighboring communities and consume large quantities of electricity resulting in higher electric bills for everyone else.
- In 2025, energy grids around the U.S. blew past annual peak output projections months before the hottest days even arrived, and home air conditioners were competing with data centers for that power.
- In early 2025, a fluke caused 1,500 MW of data center demand to switch to onsite generation and vanish from the east coast grid, causing a huge surge in excess electricity. Rapid massive changes in energy consumption such as this one can cause grid failures and blackouts.
- In February 2021, Winter Storm Uri brought several days of freezing temperatures that broke Texas’ energy grid. Millions of residential customers lost power while industrial loads, like data centers, chugged along.
- Some data centers are scoring below-market electricity rates with public utilities through secret special contracts and terms that are not publicly available, severely disadvantaging existing ratepayers. In Montana, the PSC has ruled that these contracts do not have to be shared with ratepayers and the general public.
- In some cases, data centers and special contract power plants bid on colocation deals that would place them behind the grid interconnection and then argue that they shouldn’t bear any costs of transmission, even though they are connected to the transmission system and could result in higher bills for existing customers.
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What are state governments doing about it?
Montana currently does not have any state regulations limiting energy or water use of data centers. A study resolution on data centers (HJ 46: Sponsor Rep. Millet, R-Marion) did not pass out of committee during the 2025 Montana Legislative Session. However, HB 424 (Rep. Katie Zolnikov, R-Billings) did pass and extended the low property tax rate that data centers enjoy (0.9%) to new generating facilities connected to a data center.
In April, the Texas Senate unanimously passed legislation that would regulate data center and utility relationships. The legislation addresses concerns around transmission cost recovery, grid load forecasting, and outage protections for residential consumers. If a state with hundreds of data centers is trying to add protections retroactively, Montanans should learn from their experience and protect existing customers before they are harmed.
Oregon and Virginia have created unique rate classes for data centers to help protect residential customers and other medium and industrial customers from subsidizing the costs associated with the data centers. (Although, it appears that utilities are already trying to find loopholes in Oregon.)
Wyoming, North Dakota, and South Dakota have large load tariffs in place, which are extra fees for large energy customers like data centers that are intended to protect ratepayers from bearing the financial burden of data centers. While these are important steps forward in protecting existing utility customers, they are insufficient on their own to guarantee data centers pay their fair share.
Idaho State legislators introduced a bill in 2025 to protect utility customers from cost-shifting. “How are you going to tell Grandma it’s OK for her — on a fixed, limited income — that she’s going to subsidize the next major AI plant somewhere?” asked Rep. Stephanie Mickelsen, R-Idaho Falls. The bill did not pass.
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More resources and reading:
https://datacentremagazine.com/articles/us-president-donald-trump-building-a-data-centre-empire
https://www.theguardian.com/environment/2025/apr/03/trump-fossil-fuel-donors-data-centers
https://www.politico.com/news/2024/05/09/trump-asks-oil-executives-campaign-finance-00157131
https://www.bbc.com/news/articles/ce8g2kpzx0go
https://www.cbsnews.com/news/trump-coin-dinner-with-president-meme-coin-price/
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