by Ben Catton
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 these overeager juggernauts of “opportunity.” For instance, Butte-Silver Bow County Commissioners voted in mid-April to approve the sale of 606 acres of land to Horizons Montana, an LLC owned by Sabey Data Centers with only a few days’ notice. One commissioner, Bill Anderson, pressed for more time to allow public input, but his concerns were ultimately ignored.
In December, NorthWestern Energy cheerily announced plans to supply 400 megawatts of electricity to two data centers beginning in 2026 and 2027. NorthWestern’s current annual load is 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).
The PSC sent a letter to NorthWestern regarding this proposal, reminding the utility that the PSC is legally obligated to oversee such significant changes to Montana’s utility services. They wanted to know if NorthWestern intended to comply with its legal obligations and request permission from the PSC. NorthWestern effectively brushed them off. Instead, NorthWestern had two bills introduced — HB 877 and HB 911, both sponsored by Rep. John Fitzpatrick (R-Anaconda) — that attempted to bypass PSC oversight of public utilities entering into contracts with data centers and other industrial operations. HB 877 would have eliminated the PSC’s ability to protect existing utility customers when NorthWestern makes deals to provide power to data centers, and HB 911 would have allowed NorthWestern to create an unregulated shell company that would serve power to large customers,with little PSC oversight to protect existing customers. Fortunately, both bills failed.
Data centers are not traditional commercial enterprises. Their energy and water demands are far beyond what most of our current infrastructure is designed to handle, and they often return far less to the local economy than expected. 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. HJ 46 (Rep. Millet, R-Marion) was a study resolution that would have examined similar issues. Unfortunately the Republicans on the Senate Energy Committee torpedoed the study.
Data centers receive one of the lowest property tax rates in Montana (0.9%), and HB 424 (Rep. Katie Zolnikov, R-Billings), which cleared the Legislature, will extend that low tax rate to any new power-generating facility connected to a data center. Unfortunately, this means that data centers won’t provide much tax benefit to the communities they occupy. Data centers also can extend the life of fossil fuel plants to power their computers and cool their buildings, use enormous volumes of water resources, and result in existing ratepayers subsidizing their energy generation and transmission system costs. Utilities and data center owners (think Meta, Amazon and Google) have immense political sway, and across the country, they are successfully lobbying for less regulation and less oversight of artificial intelligence (AI) and cryptocurrency operations, with tax breaks for both. These data center proposals should be scrutinized closely. Communities shouldn’t hand over so much power — be it electrical or political — to projects that can result in higher electricity bills for existing utility customers and little tax revenue for local and state governments.
This article was published in the June 2025 issue of Down To Earth.
