Mike Cashell of NorthWestern Energy discusses large load data center customers
The Montana Public Service Commission has opened an inquiry process into NorthWestern Energy's plan to supply two data center companies with enormous amounts of coal-fired power in Montana and how it will affect the power system and customers.
On Tuesday, the commission voted unanimously to request information from NorthWestern Energy about "data center loads and resource adequacy."
The Missoulian has previously reported that two data center companies have announced plans and signed letters of intent to buy as much as 400 megawatts electricity, combined between the two of them, by the year 2030. That's enough power to supply nearly 320,000 homes for a year. All of the power to those two data centers will be supplied from the Colstrip coal-fired power plant in Montana starting in the year 2026.
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One of those data center companies is not allowing NorthWestern Energy to reveal its name, and NorthWestern CEO Brian Bird has said that "probably" means it's connected to the government somehow. The other company is called Atlas Power, and is based in Butte.
The five-member Montana Public Service Commission has the power to regulate NorthWestern Energy, a publicly-traded company, because it is a monopoly utility in Montana.
The PSC's letter to NorthWestern Energy requested answers on a variety of topics.
"The anticipated electricity supply service announced in NorthWestern's press releases will significantly increase NorthWestern's retail load and resource needs," the PSC wrote to NorthWestern. "As NorthWestern's December 17, 2024 press release acknowledges, the additional (power) loads will affect the allocation of costs among NorthWestern's existing customers. Depending on the characteristics of the loads, they may also impose new strain on NorthWestern's system."
In 2022, the PSC initiated a process to investigate "resource adequacy and risks to the electrical supply in the state of Montana." Tuesday's letter was part of that process.
The PSC noted that there is a provision in Montana law that retail customers that have an individual load greater than 5,000 kilowatts may not purchase electricity supply from a public utility unless the customer can demonstrate that the provision of electrical supply will not adversely impact the public utility's other customers over the long term, as determined by the PSC.
The commissioners asked NorthWestern's director of regulatory affairs, Charles Lane, if their plans to supply the power to the data centers are in line with Montana law.
"Does NorthWestern intend to ask the Commission to determine whether the provision of electricity supply service to the Data Centers will adversely impact NorthWestern's other customers over the long term?," the PSC wrote for its final question. "If so, when does NorthWestern intend to make that request?"
NorthWestern was asked to respond by March 4 of this year.
"I think that this is very timely," said PSC commissioner Brad Molnar. "When you take a look at the megawatts that we're talking about here, we will soon be over the amount of megawatts, if not already over the amount of megawatts, generated by the Yellowstone (power) plant."
In December, the Missoulian reported that the amount of power expected to eventually be used by the two data centers exceeds the entire generating output capacity of Montana's newest power plant, the Yellowstone County Generating Station in Laurel, which generates 175 megawatts.
(The power for the two data centers will not come solely from the Yellowstone power plant, the Missoulian was only using its output as a frame of reference for how much power the data centers were expected to consume.)
Molnar expressed concern about the situation at Tuesday's meeting.
In a phone call with the Missoulian, he elaborated on his concerns.
"If you bring on four or five of those data centers, and then they're starting at 50 megawatts (of consumption) and then going up to a couple hundred megawatts, we could use all the (equivalent) electricity of the Yellowstone Generating Station," he said. "Which means another generation plant (has to be built) which means large substations. My question is, do ratepayers of NorthWestern Energy have to pick up the socialized cost of that or could Google simply do it?"
It's not clear whether Google is behind one of the data centers, and Molnar was just using that company as an example.
Molnar said the PSC needs clarity on whether the data centers will be in their own classification as far as the rate they pay, much like the agriculture sector in Montana has its own rate class.
"Are they going to be a customer who pays for their own substations?" Molnar asked. "It's the Wild West. We really don't know. So it's time to find out."
NorthWestern Energy spokesperson Jo Dee Black provided the Missoulian a statement regarding the PSC's inquiry.
"NorthWestern Energy customers' electric service reliability and affordability is more secure, with additional on-demand, 24/7 generation resources located in Montana and dedicated to serving our Montana customers," Black said.
The Missoulian has previously reported that NorthWestern is acquiring a larger share of the Colstrip coal-fired power plant on Jan. 1, 2026. Black referenced that in her statement.
"Acquiring additional shares of the Colstrip Plant, at no upfront cost, as well as the recently constructed Yellowstone County Generating Station, secures on-demand generation for reliable, cost-effective energy service for our Montana customers and provides opportunities to NorthWestern Energy to be a partner in economic development for the state's future," Black wrote. "NorthWestern Energy has worked for two decades, since deregulation was repealed, to better protect our Montana customers from the risks of relying on the energy market to meet demand -- risks of volatile prices and limited supply."
Black concluded by saying that NorthWestern will cooperate with the PSC.
"This is an important discussion with impacts on Montana's economy and the state's economic growth," Black said. "NorthWestern Energy welcomes this opportunity and will provide a response to the Montana Public Service Commission's questions, as yesterday's letter states, within the next three weeks."
David Erickson is the business reporter for the Missoulian.
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