by Anne Hedges

Data centers have been around for decades but modern “hyperscale” data centers, made possible by powerful new microchip technology, are a completely new beast when it comes to energy and water demands. In Montana, NorthWestern Energy’s announcements that it wants to provide enormous amounts of electricity to just a few artificial intelligence (AI) and perhaps cryptocurrency data centers has drawn a lot of attention in the last year. Despite NorthWestern’s dismissal of any concerns regarding the impacts that data centers could pose to the cost of electricity for Montana families and small businesses, it provides little more than bluster or misrepresentation of recent studies to prop up its argument that more data centers would be good for utility customers. Montanans are rightfully concerned.

Recently, MEIC has worked with partners to hold educational events across the state on the impacts of data centers. Montanans across the political spectrum are showing up to these events in droves to learn and ask questions. (You can find recordings of these on our YouTube channel).

Data Centers Have It Too Easy

Data centers have enjoyed a remarkably low property tax rate of 0.9% since 2017, and in 2025, the legislature extended that low property tax rate to all infrastructure related to the facility, communication equipment such as fiber optic cables, transmission and distribution systems, and power plants. Until 2025, homeowners paid a higher property tax rate than data centers thanks to powerful data center lobbyists.

When the boom busts or developers decide to move to another state (as has happened at the Hardin Generating Station), someone will still need to pay for the new power plants, transmission and distribution lines, water systems, roads, etc, that developers said they needed. Those infrastructure investments could become stranded assets that Montanans could be forced to pay for if our government agencies don’t take action to protect us.

Northwestern Energy and Data Centers

What we keep hearing in these events is that Montanans are concerned that data centers could further increase their skyrocketing utility bills, diminish water quantity and quality, and harm their communities. Across the country, data centers have done just that. Time and again, developers make promises but neighbors’ wells run dry, air and noise pollution increase, electricity bills skyrocket, and tax revenue and jobs fail to materialize.

More than 200 people attended the data center panel in Billings in January. Photo by Anne Hedges.

Montana is not immune from this AI-induced frenzy. Slick AI data center developers, NorthWestern Energy, and the Montana Chamber of Commerce are making promises to communities, legislators, and regulators, but unfortunately, there is no way to hold them accountable to these promises without regulations that require financial protections for Montanans and enforcement of their promises. Other states that didn’t have adequate protections for consumers, communities, and water users have suffered the consequences.

NorthWestern’s strong resistance to regulations to protect existing utility customers raises alarm bells. A year ago, the Public Service Commission (PSC) informed NorthWestern that it needs PSC approval to serve electricity to data centers. NorthWestern repeatedly denied the PSC had such authority until late fall. It told the PSC it would submit a large load tariff for PSC review by the end of 2025. NorthWestern failed to do so and as of this writing, still hasn’t updated the PSC on when it intends to submit such a tariff.

However, NorthWestern is far more forthcoming with investors. On its February 2026 investor call, NorthWestern said that it is working with 14 data center developers, three of whom are already half way through its five-step process to receive electricity from NorthWestern. It also told its investors it would submit a proposed tariff to the PSC when it had signed agreements with data center developers, sometime in the middle of 2026. Nevermind that PSC rules should be established before any agreements are struck, but NorthWestern apparently hopes it can leverage these signed agreements to force the PSC to adopt whatever rules it requests — rules that will certainly be favorable to NorthWestern and data center developers.

MEIC and our partners, troubled by NorthWestern’s flippant attitude toward PSC oversight, filed a complaint in late 2025 asking the PSC to meaningfully regulate the electricity that NorthWestern serves to data centers by creating a separate rate class and a large load tariff. A separate rate class would better guarantee that data center developers are charged for the costs they impose on the electricity system. The PSC acted on that complaint in early February and gave NorthWestern 20 days to respond. As of this writing, NorthWestern has not responded.

Protections for existing utility customers are urgently needed. NorthWestern’s electricity customers have already seen as much as a 39% increase in electricity rates since 2022. They need specific protections from data centers so rates don’t continue to skyrocket, as they have elsewhere, and Montanans aren’t left holding the bag when this data center boom goes bust.

Hundreds Attend Educational Panels Around the State

In October, MEIC staff held an educational event in Butte on data centers. With local organizations like Butte Watchdogs for Social and Environmental Justice, we talked to a packed room about the potential impacts from proposed data centers and the experiences of other communities across the country.

In January, the Butte-Silverbow Council of Commissioners voted 10-0 to ask the PSC to regulate NorthWestern’s electricity sales to data centers and protect families and businesses from subsidizing the electricity bills of Big Tech.

Photo by Ben Catton.

Community education works. MEIC is taking our data center panel on the road, and in 2026, we have partnered with community organizations like Citizens for Clean Energy, Upper Missouri
Waterkeeper, Helena Interfaith Climate Advocates, Central Montana Resource Council Montana Conservation Voters, and Honor the Earth to hold events in Great Falls, Billings, Broadview, Helena, Lewistown, and more. Look for an event near you.

This article was published in the (March 2026) issue of Down To Earth.

Read full issues of Down to Earth here.