Here We Go Again

What is it about top executives in monopoly utilities that makes them want to play cowboy capitalists? 

Case in point is NorthWestern Energy's plan to provide power to gigantic data centers. With great ballyhoo across the state, NorthWestern Energy announced it signed a "letter of intent" to provide as much as 1,000 megawatts of electricity to Quantica Infrastructure for its proposed data center. 

That's more than their current total electric load of 760 megawatts. That amount of power would use all of NorthWestern's existing generation capacity.

You would think that this monopoly business and its top brass would be satisfied with its current situation. In exchange for providing power to its current customer base (that's us), they receive a virtual guarantee they will not lose their investment for any reason. They also get a guaranteed rate of return on their investments that hovers around 10%. That is for the entire life of the facility regardless of economic conditions or competition.

In exchange for running this sleepy little monopoly, which is headquartered in Sioux Falls, South Dakota, their current CEO, Brian Bird, received $4.8 million in 2024. The 2023 corporate proxy statement lists Board Chair Linda Sullivan receiving an annual retainer of $150,000 plus 3,750 shares of stock. Current price per share is around $55. For comparison, the manager of Flathead Electric Cooperative, the largest public power provider in Montana, receives just under $550,000 per year.

But now NorthWestern wants to take on a lot of risk building new facilities and making investments betting on the latest fashion trend to come down the pike: data centers. And if they miss their bet, we all suffer the consequences. Maybe the business booster crowd needs a history lesson.

In 1971, the Bureau of Reclamation released the North Central Power Study. The plan called for massive coal development on the northern plains. In Montana alone, they envisioned 17 coal plants roughly the size of the Colstrip plants. 

Of course, the Montana Power Company (NorthWestern Energy's predecessor) and other corporate interests in Montana were all for it. For them, the environmental degradation and negative impact on existing ag producers and others were worth the cost.

But ranchers, Native tribes, and many others were not convinced. They organized to oppose the massive development being proposed by the coal and utility industries. In the end, only four plants were built and owned by a consortium of utilities. 

It also spawned two of the most powerful citizen groups in the state: The Montana Environmental Information Center and Northern Plains Resource Council. To this day, they remain actively engaged in protecting Montana's people and environment from corporate interests seeking a quick dollar.

Fast forward to 1997 and the electric deregulation fiasco. Management of the Montana Power Company became bored with the stodgy old regulated utility business. So they decided to sell off the power plants and power lines they owned. They took all of that money and dumped it into Touch America, a fledgling telecommunications company. 

In short order, Touch America went bankrupt and all of that money evaporated. Montana suffered through years of economic chaos. We went from some of the lowest customer rates in the northwest to some of the highest rates in the country. NorthWestern is now proposing significant rate increases on a regular basis, while still trying to acquire worn out, expensive coal plants in the Colstrip complex.

In the emerging world of huge data centers serving everything from artificial intelligence to cryptocurrency ponzi schemes, NorthWestern sees a new shiny object on the horizon: huge electric loads required by data centers.

Unfortunately, this confronts us when the national government is run by delusional ideologues. Here in Montana, billionaire tech moguls and far-right legislators are running state government. The Public Service Commission, which should be protecting us from the greed of corporate CEOs, looks more like the clown show in a three-ring circus.

Strap in and hold onto your wallets, folks. It's gonna be a wild ride.

Ken Toole served on the Public Service Commission from 2007 to 2011. He was a member of the Senate Energy and Telecommunications Committee, serving as its chairman in 2005. He served as the vice chair of the Senate Taxation Committee in 2005. He was also the President of The Policy Institute, a private group which conducted research on economic issues including energy and taxation.