Montana’s largest utility is planning how it’s going to generate power and meet rising demand in the era of data centers. The company is now soliciting public feedback on that draft plan.
Austin Amestoy: Hi Ellis.
Ellis Juhlin: Hey Austin, glad to be here.
AA: OK, Northwestern Energy has been holding these public meetings all over the state this week. And last week, Ellis, what are they for?
EJ: These meetings are a place for the public to give their feedback on the draft of Northwestern Energy's Integrated Resource Plan, or IRP for short. It's a fancy term for a 300-plus page document that's basically a roadmap. The IRP looks at how much power Northwestern Energy needs to provide to its customers, and all of the different ways that it can generate that power.
AA: Okay, projecting how much power they're going to need, and how to generate that power. Why does Northwestern Energy want public feedback on this plan?
EJ: So in the simplest of terms, this plan affects how much we're going to end up having to pay for power. As a utility, Northwestern Energy charges the cost of its power generation back to us, the customers, plus a rate of return, which is how they make their money. When they need to generate more power, they build things like the Yellowstone County Generating Station. For context, that's the methane gas-fired power plant on the banks of the Yellow Stone River. It's been at the center of multiple legal battles since its inception, and it's now up and running. So you can think about it this way. If Northwestern builds something more expensive, we, the customers, are on the hook to pay for it. And we saw that happen just this past year when that gas plant went online, and state regulators approved Northwestern Energy's request to charge customers to the tune of $246 million for the cost of building that plant. In the Missoula meeting I attended, the utility said it can currently meet its customer needs because of the Yellowstone County Generating Station. But growing demands, which are driven largely by data centers, will mean that Northwestern's not going to have enough power to supply all of its customers as soon as 2028.
AA: Tell us a little bit more about the meeting in Missoula you attended.
EJ: So there were close to 100 people there, over 30 gave public comments, and most of them centered around two main concerns. One being affordability, and then two being climate change. Burning fossil fuels for power produces planet warming emissions. And as we sat in a room looking out at the warm, snowless landscape of late January, climate change was on everyone's minds. Additionally, burning coal and gas hurts air quality and causes a slew of negative health impacts, and that came up a lot in the meeting too.
AA: Ellis, you've reported a lot on Northwestern Energy entering into these agreements to power potential data centers in Montana. Doing so, if those agreements come to fruition, would require Northwestern generating more than twice the power that they currently do. How is Northwestern proposing to source this power?
EJ: In this plan, Northwestern really is emphasizing using coal and gas-fired power to meet those needs. As it currently stands, about half of Northwestern Energy's total portfolio comes from renewables. That's predominantly hydropower. Between building the Laurel Generating Station, taking over more shares of Colstrip, and their upcoming merger with Black Hills Corporation, the percentage of their portfolio that's renewables is going to drastically decrease over the next few years. And this plan outlines more of an investment into those fossil fuel-based forms of power. So, we're really seeing a shift away from renewables. And all of this has implications for some of the goals that Northwestern set for itself. They have a goal to be net zero by 2050. But with these changes and what they're outlining in this plan, it doesn't seem like they'd be on track to meet those goals. And some of the criticism during the meeting emphasized this as well. University of Montana geoscience professor Andrew Wilcox said the plan fails to take into account modern technology that's far more affordable than these traditional forms of fossil fuel-based power. He said this IRP reads like it's from the 20th century in an energy system that we don't have any more - based entirely on fossil fuels in a world where climate change isn't a concern.
Wilcox: “We are living in a time of tremendous energy innovation, dramatic cost reductions in wind, solar, batteries, and geothermal, technological advances to shift demand in a way that curbs peaks, reduces costs, and decarbonizes”.
AA: You know, Ellis, I can't help but reflect on how different the power landscape in Montana is from the last time Northwestern updated this plan three years ago. And during this whole time, rates have kept going up. Did that come up in the meeting?
EJ: Rates were a concern that was brought up across a lot of different public comments. Like you mentioned, Austin, our rates have been steadily going up. We had another rate increase get approved just late last year. Michael Hudson, a Missoula resident, called out this lack of affordability in his comments.
Hudson: “Like the last two IRPs, this one claims that increased fossil fuel use will lead to cheaper power. Yet our prices have risen by 40% since 2022, and those increases have followed the expansion of fossil fuel and coal”.
AA: So, what comes next in this process?
EJ: So, there are two more meetings in Helena and Bozeman this week and Northwestern is accepting public comments on the IRP through March. The Public Service Commission will begin to review the IRB in late April and then issue its approval or rejection of the plan sometime after that.
AA: We know you'll keep us informed. Ellis, thanks so much for sharing.
EJ: During your reporting. Thanks Austin.
