Straight Answers on Data Centers
Jason Merkel, NorthWestern Energy Vice President Distribution, explains what the arrival of data centers could mean for our energy system.
Data centers and Montana’s energy future
NorthWestern Energy is enabling investment in Montana while ensuring new growth doesn’t increase rates for existing customers.
Growing Montana’s economy. Protecting Montana customers.
NorthWestern Energy is protecting what matters most to families and businesses: affordable, reliable energy. Our Large New Load Tariff ensures data centers pay their own way, with no cost-shifting to existing customers.
Forty years ago, industries including renewable energy, biotechnology and e-commerce logistics were either in their infancy or virtually nonexistent. Today companies such as NextEra Energy Resources, Invenergy and GlaxoSmithKline are established — employing Montanans, generating tax revenue, and supporting critical infrastructure and services across the state. Data centers are following a similar trajectory.
Opportunities for Montana
Economic Growth for Communities
Data centers bring new jobs, tax revenue and long-term investment to towns and cities.
Modern Infrastructure
These facilities are essential for the digital economy, much like high-speed, high-quality, seamless internet access and the evolution of telecommunications were for previous generations.
Montana’s Advantage
Montana offers reliable, affordable power — strengthened by NorthWestern Energy’s expanded ownership of the Colstrip Power Plant and a clean energy portfolio anchored by hydroelectricity. This competitive advantage allows us to attract data centers while keeping rates affordable for existing Montana customers. When data centers pay their own way, economic growth strengthens our entire energy system, benefiting all Montanans.
NorthWestern Energy submits large new load tariff proposal to Montana Public Service Commission
NorthWestern Energy submitted an application to the Montana Public Service Commission on March 31, 2026 requesting approval of a Large New Load Tariff. The tariff is designed to protect existing Montana customers by ensuring that data centers and other large new load customers pay their own way. The contract terms proposed in the tariff will prevent cost-shifting to existing customers.
The tariff proposal is designed to support Montana’s long‑term energy future and economic growth while ensuring strong protections for service reliability and affordability for existing customers. It creates a clear, consistent framework for serving large new electric loads that is fair, responsible and aligned with Montana values.
A commitment to Montana’s energy future
NorthWestern Energy’s Large New Load Tariff puts Montana customers first. By ensuring data centers pay their own way, we can pursue economic growth while protecting affordable, reliable energy for all Montanans. This approach strengthens our energy system, attracts responsible investment, and ensures Montana’s long-term prosperity benefits everyone – not just new industries.
Given the strong interest from both the Montana Public Service Commission and the public, we believe it is important to bring this issue forward now, instead of waiting until a contract with a large new load customer is in place. Filing this tariff now supports constructive dialogue as we all work together toward a solution that serves Montana best.
Large new load tariffs: your questions answered
Learn how NorthWestern Energy's proposed large new load tariff helps support Montana's growth while protecting existing customers, maintaining reliable service and keeping costs assigned fairly.
Understanding the large new load tariff
Learn what a large new load tariff is, why NorthWestern Energy is proposing it and which customers it applies to. This section covers the purpose, scope and benefits of the proposed framework.
What is a large new load tariff rule?
A large new load tariff rule sets out the requirements new customers that use large amounts of electricity, such as data centers, advanced manufacturing facilities and other large industrial operations.
Under NorthWestern Energy's proposed framework, the tariff rule applies to new loads of five megawatts (MW) or greater, with additional requirements for projects larger than 50 MW. These customers take service under existing tariffed rates and may also be subject to project-specific requirements designed to help protect existing customers.
Simply put, the tariff rule helps ensure that customers creating the need for new energy infrastructure investments are responsible for the costs associated with serving those projects.
Why is NorthWestern Energy proposing a large new load tariff rule?
Montana is attracting interest from businesses that can bring jobs, investment and long-term economic opportunities to the state.
A large new load tariff rule provides a transparent framework for serving these customers, planning for future energy needs and helping ensure costs are assigned appropriately. The framework is designed to support growth while protecting existing customers and maintaining system reliability.
What size customer qualifies under the large new load tariff?
Under the proposed framework, the tariff rule applies to new customers with loads of 5 megawatts or greater.
Additional requirements apply to customers larger than 50 megawatts, including an electric service agreement that must be reviewed and approved before service begins.
What are the benefits of a large new load tariff?
A large new load tariff can help:
- Support responsible economic growth and investment in Montana.
- Create a transparent process for evaluating and serving new large-load customers.
- Help ensure costs are assigned to the customers driving new infrastructure investments.
- Maintain regulatory oversight and accountability.
- Support long-term affordability by spreading fixed system costs across additional energy use.
- Strengthen the grid through planned and structured growth.
How the proposal protects existing customers
Protecting existing customers is the foundation of the proposed large new load tariff. Learn how the framework is designed to prevent cost shifting, protect customer rates and ensure large-load customers pay for the infrastructure needed to serve their projects.
How does the large new load tariff protect existing customers?
Protecting existing customers is the primary goal of the large new load tariff rule. Montana customers will never subsidize data center energy costs. Those costs will not be shifted to Montana households, small businesses, farms or ranches.
Under the Large New Load Tariff, data centers will pay their fair share of infrastructure costs. Your rates only reflect the energy you use — new growth will not increase what you pay.
The proposed framework is built around a simple principle: existing customers should not pay for infrastructure needed to serve new large-load growth. Instead, the large-load customers are responsible for the grid and other energy infrastructure investments needed to serve their projects.
Regulatory oversight ensures no cost-shifting occurs for other customers.
Requirements may include:
- Direct assignment of project-specific costs to the large-load customer.
- Surcharges and reservation fees to cover system upgrades and help prevent cost shifting.
- Minimum billing requirements help ensure customers pay for infrastructure built to serve their project.
- Long-term commitments and exit provisions designed to reduce the risk of stranded costs.
- Financial assurances, such as collateral requirements, based on the customer's financial standing.
- Regulatory oversight and commission review of certain large-load agreements.
These protections help ensure residential and small-business customers are not left paying for infrastructure built specifically for a new large-load project.
Will a large new load tariff rule increase my electric bill?
The purpose of the tariff rule is to help prevent costs from being shifted to existing customers. The proposed framework is specifically designed so large-load customers pay for the investments required to serve them.
Growth structured the right way strengthens the grid and can help keep costs lower for everyone long-term, driving affordability for all customers.
Are large-load customers getting special rates?
No.
Under the proposed framework, large-load customers are not receiving special electric rates. They take service under existing tariffed rates and pay any applicable surcharges or project-specific charges designed to prevent cost shifting to other customers.
The focus of the tariff rule is not on providing discounts. It is on creating a transparent process that supports growth while protecting existing customers.
What happens if a large-load customer stops operating or leaves early?
The tariff rule includes protections designed to reduce that risk.
Requirements such as minimum billing provisions, minimum contract terms, exit-related provisions and financial commitments help ensure NorthWestern Energy and our customers are not left paying for customer-specific infrastructure if a project shuts down earlier than expected.
In simple terms, the framework is designed to help ensure existing customers are not left holding the bill for investments built to serve a specific large-load customer.
Supporting reliable service as demand grows
As Montana's energy needs grow, reliability remains the priority. This section explains how large-load customers are served and how the proposed framework supports reliable electric service for all customers.
How does the tariff rule support reliable electric service?
Reliability comes first.
Before a large-load customer is connected, NorthWestern Energy evaluates system impacts, infrastructure needs and operational requirements. The proposed framework also notes that certain large-load customers can improve system efficiency through high-load factors and, in some cases, provide operational flexibility that supports reliable service.
The goal is to ensure growth occurs in a way that maintains reliable service for all customers.
Do large-load customers get their own dedicated energy resource?
No.
Under the proposed framework, large-load customers are not assigned a dedicated resource. They receive service from NorthWestern Energy's overall energy portfolio, just like other bundled customers.
How large-load projects are evaluated
Before a large-load customer can receive service, projects must complete planning, engineering and review processes. Learn about the requirements, studies and agreements that help ensure projects are appropriately planned and connected.
Is there a review process before a large-load customer can connect to the system?
Yes. Large-load projects go through a structured review process before service begins. Depending on the project, that process may include:
- A development agreement.
- A large new load customer-funded development deposit for engineering and planning studies.
- Study queue requirements that help ensure projects are reviewed in an orderly manner.
- Commission review of electric service agreements for loads greater than 50 MW.
This process helps ensure projects are appropriately planned before they are connected to the electric system.
Who reviews and approves these large new load agreements?
The proposed framework is subject to regulatory oversight.
In addition, projects larger than 50 MW require regulatory approval of an electric service agreement that must be approved before service begins. This oversight helps ensure transparency and customer protections are maintained.
Regulatory review and next steps
The proposed large new load tariff is subject to regulatory review and oversight. This section explains the approval process, key considerations and what happens next as the proposal moves through review.
What challenges are associated with serving large-load customers?
Large-load projects require careful planning and oversight.
Serving large customers may require system studies, infrastructure upgrades, customer commitments and regulatory review. The key challenge is making sure growth occurs in a way that supports reliability, affordability and customer protection.
That is why NorthWestern Energy’s proposed framework includes new large load customer-funded studies, development agreements, standardized review processes and additional requirements for the largest projects.
What are the next procedural steps for NorthWestern Energy’s large new load tariff rule proposal to the Montana Public Service Commission?
The Montana Public Service Commission is the authority for reviewing and approving electric tariffs in Montana. NorthWestern Energy’s March 31, 2026 application initiates a public regulatory proceeding that will include opportunities for review and public comment consistent with Montana Public Service Commission procedures. NorthWestern Energy’s priority throughout the process is to provide safe, reliable energy service to customers at affordable rates.
Public review and Montana Public Service Commission regulatory process
The Montana Public Service Commission is the authority for reviewing and approving electric tariffs in the state. NorthWestern Energy’s filing initiates a public regulatory proceeding that will follow established Montana Public Service Commission procedures.
NorthWestern Energy’s priority throughout the process is to provide safe, reliable energy service to customers at affordable rates.
NorthWestern Energy will always put Montana customers first. We are committed to protecting your rates and reliability while responsibly supporting new opportunities — like data centers — that can help Montana thrive for generations to come.
Facts Matter
Rick Edwards, Director of Community Connections, provides the facts Montanans need about decisions that affect their energy future.
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Learn more about the data centers proposed in Montana
Sabey Montana
Sabey Data Centers would transform the industrial property within the Montana Connections Business Development Park near Butte into one of the most advanced, energy-efficient data center campuses in the country.
Big Sky Digital Infrastructure
Big Sky Digital Infrastructure (BSDI) is a Quantica platform dedicated to developing the Big Sky Campus, a 5,000-acre energy and technology hub in Yellowstone County north of Billings.
Emerging industries become foundational
Our commitment is to ensure that new power generation assets and infrastructure developments are aligned with long-term Montana customer needs. We do not make investments for speculation — we invest for a future that includes data centers as reliable, long-term partners in Montana.
Infrastructure & investment that benefit all:
- Data centers require significant upfront investment and long-term planning, such as improved roads, electric grids and new schools.
- These facilities are essential infrastructure for the digital economy.
- Data center developers will cover their fair share of costs to connect to Montana’s power grid and other necessary services.
- Rising energy demand creates an opportunity to make Montana’s energy system more efficient.
- Using infrastructure more effectively could help lower costs per unit of energy.
Addressing common concerns
Are data centers a good investment for Montana?
Yes. Data centers are a proven source of jobs, tax revenue, and long-term economic strength — helping diversify and grow Montana’s economy.
Will data centers raise my energy costs?
No. NorthWestern Energy’s Large New Load Tariff ensures that data centers pay their own way, with no cost-shifting to existing customers. Your rates reflect only the cost of serving your home or business. Data center infrastructure costs are fully paid by the data centers themselves.
Can Montana’s energy system handle data centers?
Yes. With careful planning, transmission studies, and a balanced mix of renewable and on-demand generation, we can support new industries while maintaining reliable service for all.