by Ben Catton
NorthWestern Energy wants to provide electricity to energy-guzzling data centers while it evades its legal obligations to existing customers. The law is clear: a public utility in Montana can only provide electricity to a new energy intensive customer – including data centers – if it can demonstrate to the Public Service Commission (PSC) that providing that electricity won’t harm existing customers. Yet, NorthWestern has largely ignored the PSC’s requests to comply with the law. NorthWestern has signed three letters of intent to serve large data centers. Unfortunately, NorthWestern wants to keep those signed letters secret from the public who could be forced to subsidize the electricity and transmission bills of some of the richest companies in the country as a consequence of these deals.
As a result, MEIC and our partners,* represented by Earthjustice, filed a complaint with the Montana PSC in November requesting it protect existing customers from subsidizing the electricity and transmission costs of data centers. The complaint asks the PSC to exert its control over NorthWestern, enforce existing law, and use the tools at its disposal to protect Montanans from big-tech’s high-risk investments.
Prior to filing the complaint, Earthjustice sent two letters to the PSC in October on behalf of MEIC, Honor the Earth, and the NW Energy Coalition. One letter requested the PSC deny NorthWestern’s unjustified protective order attempting to keep the contracts from public scrutiny.
NorthWestern’s attempt to hide the contents of its agreements with data centers from the public is concerning. While there may be valid reasons to keep portions of those contracts secret, it is unusual in Montana for an entire contract to be off-limits to the public. These backdoor deals are a common tool used by utilities across the country to avoid disclosing that they are using revenues from existing residential and small business customers to subsidize electricity for data centers. In one recent instance, litigation revealed that an east coast utility was planning for existing customers to pick up an extra $325 million for discounted energy costs to the data center over the life of the contract. Existing customers deserve to know if their hard-earned money will be used to subsidize power and transmission for data centers.
The second letter detailed why NorthWestern’s contorted legal theory about not needing PSC approval was erroneous. We requested the PSC address NorthWestern’s legal obligation to prove that it will not harm existing customers, outlining the risks of shifting costs from large load data center customers to existing residential and small business customers. This letter details how creating a separate rate class for large energy users such as data centers can protect existing ratepayers, as can various “tariffs” that provide specific sideboards for that electricity service. It asserts that the PSC’s approval must occur prior to the utility providing for electricity supply service, as the law dictates.
The PSC has repeatedly issued letters to NorthWestern saying that NorthWestern needs its approval to serve data centers. In its November reply, NorthWestern finally acknowledged that the plain language of the law requires “approval,” a word it painstakingly avoided for nine months. To date, NorthWestern has only agreed to come before the PSC with a proposed tariff by the end of the year. While tariffs can be useful tools to avoid current customers subsidizing data centers, they are insufficient on their own to guarantee data centers pay their fair share.
NorthWestern’s reluctance, omissions, and incomplete solutions led MEIC and our partners to file this complaint with the PSC. Sustainable data center policies that ensure that big-tech’s data center proposals don’t raise electricity bills for existing customers, drain water resources, or damage public and environmental health is the only rational path forward in this frothy bubble of AI and data center hype.
*Partners in the litigation include: Big Sky 55+, Butte Watchdogs for Social and Environmental Justice, Climate Smart Missoula, Golden Triangle Resource Council, Helena Interfaith Climate Advocates, Honor the Earth, MontPIRG, and NW Energy Coalition.
This article was published in the December 2025 issue of Down To Earth.
