Montana Utility Customers May Bear Costs as Data Centers Drive Up Infrastructure Demand
Why It Matters
More than 400,000 Montana households and businesses served by NorthWestern Energy could face higher utility bills as the state’s largest electric utility pursues major agreements with data center operators. Consumer advocates warn that existing ratepayers may end up subsidizing the massive infrastructure required to power these energy-hungry facilities.
What Happened
Over the past year and a half, NorthWestern Energy has signed agreements with at least three data centers looking to establish operations in Montana. As of February 2026, at least 11 companies had expressed interest in drawing on electricity generated or transmitted by NorthWestern to power data center operations — facilities that support artificial intelligence systems, cloud storage platforms, and cryptocurrency networks.
The deals have attracted scrutiny from utility watchdogs and consumer groups, who argue that the costs of building new power plants, substations, and transmission lines to serve these large commercial customers could be passed along to ordinary Montana ratepayers — many of whom are still absorbing the impact of recent rate increases.
The controversy has reached the Public Service Commission’s hearing room in Helena and drawn large crowds at community meetings across the state, from Broadview to Great Falls. A coalition of consumer advocates and environmental groups has pressed the all-Republican utility board for greater transparency, arguing in a November 2025 PSC filing that NorthWestern has bypassed the public’s right to scrutinize these arrangements.
The Expert View
Ari Peskoe, director of the Electricity Law Initiative at Harvard University, has studied how utilities across the country are managing the surge in data center demand. His March 2025 co-authored paper, Extracting Profits from the Public: How Utility Ratepayers Are Paying for Big Tech’s Power, outlines the central concern.
Peskoe explains that the utility business model — built more than a century ago to expand electrical service — allows companies to recover infrastructure costs and earn a profit by spreading expenses across the entire customer base. That system was designed with broad public benefit in mind, but it creates a problem when the new infrastructure primarily serves a small number of massive commercial clients.
“Utilities are expanding their system to serve a handful of big companies — Google or Meta, for example — but the traditional model is to charge everyone for the new infrastructure,” Peskoe noted in remarks attributed to recent public analysis of the issue.
A single large data center can consume as much electricity as a mid-sized city, meaning that landing just one or two such customers can justify billions of dollars in new utility spending — and generate substantial profit for the utility’s shareholders in the process.
By the Numbers
- 413,000 — Montana customers currently served by NorthWestern Energy
- 3 — data center agreements NorthWestern has signed in the past 18 months
- 11+ — companies that had expressed interest in NorthWestern electricity for data center use as of February 2026
- 1 — November 2025 PSC filing submitted by a consumer-environmental coalition challenging the secrecy of these deals
Zoom Out
Montana is not alone in grappling with these tensions. States across the country where data center buildout is already well underway are wrestling with the same fundamental question: who pays when utilities expand their grids to serve tech giants? The concern is that a regulatory model built to democratize access to electricity is now being used to funnel public subsidies toward corporate infrastructure.
NorthWestern’s shareholders, for their part, view the data center partnerships as a rare growth opportunity. But the regulatory framework that enables those profits was designed to protect consumers — a tension that utility commissions in Montana and elsewhere are being forced to confront. The situation also intersects with broader energy questions in the region; NorthWestern recently secured additional capacity at the coal-fired Colstrip plant, raising questions about long-term fuel mix as demand surges. Meanwhile, other natural resource industries face their own regulatory pressures, as seen in ongoing efforts to stabilize Montana’s timber sector.
What’s Next
The Montana Public Service Commission is expected to continue examining NorthWestern’s data center agreements following pressure from the consumer-environmental coalition. Advocates are pushing for formal proceedings that would require greater public disclosure before additional deals are finalized. The outcome could set a precedent for how Montana regulates utility contracts with large commercial energy users going forward.
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