Groups Seek Intervention in NorthWestern Energy Data Center Tariff Proceeding

Community, conservation, and Indigenous-led organizations today filed a petition with the Montana Public Service Commission seeking intervention in the NorthWestern Energy tariff proceeding for data centers. A tariff proceeding establishes the rates, terms, and conditions for NorthWestern’s electricity supply service to data centers. NorthWestern’s proposal would continue to shield the specific terms of its data center agreements from the commission and public scrutiny through “secret contracts” with data center developers. Without more transparency, NorthWestern’s proposed large load tariff is inadequate to protect residential customers from the cost increases associated with data center development and electricity demand.

Read quotes from the petitioners.

The intervening groups support tariff terms that protect residential customers and mitigate the financial risks of data center development. Tariff terms beyond NorthWestern’s proposal that would protect other ratepayers from the adverse impacts associated with large loads connecting to the grid include: defining the total amount of capacity or energy that the data center is obligated to purchase from the utility and penalizing data centers for exceeding or reducing that capacity; collateral requirements if a data center terminates or reduces service; requiring data centers to pay a minimum percentage of their forecasted maximum demand to help assess capacity needs and minimize resource adequacy risks; supporting energy efficiency programs; providing direct support to low-income customers; and incentivizing a clean energy resource mix.

The groups warn, however, that a tariff alone — in the absence of a separate customer class (a tool to distinguish different types of electricity customers) for data centers — is insufficient to protect residential customers from data center development. Before electricity service is provided to any data centers, Montana law requires NorthWestern to seek review from the PSC to ensure new large load data centers will not adversely impact existing ratepayers. In September, NorthWestern informed the PSC that it does not intend to disclose information on impacts to existing customers before it begins providing service to data centers. In November, groups filed a complaint against NorthWestern, which remains pending before the PSC.

Earlier this year, many of the same groups challenged the PSC’s protective order for NorthWestern’s letters of intent with three data center companies, ensuring the plans will remain secret.

Earthjustice represents Big Sky 55+, Butte Watchdogs for Social and Environmental Justice, Climate Smart Missoula, Helena Interfaith Climate Advocates, Honor the Earth, Montana Environmental Information Center, Montana Public Interest Research Group, and NW Energy Coalition in the intervention.