Data centers should be regulated separately by the PSC, coalition argues
A coalition is urging the Montana Public Service Commission (PSC) to establish a separate electricity customer class for data centers, arguing they are distinct from other large users and require specific regulation to protect existing ratepayers from increased costs. This comes as NorthWestern Energy's proposal for data center terms is pending before the PSC. Governor Gianforte has also signed a "Ratepayer Protection Pledge" with tech companies, though critics argue it lacks concrete enforcement mechanisms.
A coalition, represented by Earthjustice, is advocating before the Montana Public Service Commission (PSC) for the creation of a distinct electricity customer class for data centers. The groups contend that data centers' concentrated scale and demand necessitate unique regulatory treatment to prevent existing residential and small business customers from bearing the costs of infrastructure investments required to serve these large loads. This argument comes as NorthWestern Energy's application, which proposes terms for dealing with data centers, is currently pending with the PSC.
NorthWestern Energy aims to more than double its average daily load in a few years to accommodate data centers. However, the coalition believes NorthWestern's proposal is too narrow, potentially allowing data centers between 5 and 49 megawatts to evade public scrutiny and PSC review for adverse impacts. Maxine Sugarman of Earthjustice highlighted the risk of expensive utility investments for data centers being spread across other customer classes if not directly assigned, or existing customers being left with the bill if a data center deal collapses.
Montana Governor Greg Gianforte has signed President Donald Trump's "Ratepayer Protection Pledge," vowing to protect ratepayers from price hikes due to data center energy demands. The pledge, also signed by "leading AI companies" like Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI, commits these companies to cover the full energy and infrastructure costs for their data centers. However, Nick Fitzmaurice of the Montana Environmental Information Center, a member of the coalition, argues this pledge is meaningless without robust consumer protection legislation and guarantees from the PSC, specifically through a dedicated data center customer class and ratemaking mechanisms to track and assign all associated costs. A legislative committee is reportedly working on consumer protection legislation, and the coalition has formally requested the PSC to establish the dedicated customer class.