Billings council member intervenes in NorthWestern data center rate case

The rate is meant to ensure customers, like a data center, fully pays for the cost of providing electricity to it. That’s in addition to an agreement that the customer would pay for any required system or infrastructure upgrades.

O'Donnell is planning to support that tariff proposal by filing a motion to intervene in the PSC process.

“I want to make sure that any tariff that is given to Northwestern, that all of the risk having to do with the AI data centers is taken completely by shareholders, not the ratepayers,” council member Tony O’Donnell told the Gazette. “By the very nature of the fact that they are stockholders, they understand risk, so they can absorb all the risk.”

O’Donnell, a Republican, was elected to serve for eight years on the PSC from 2017 to 2024. 

NorthWestern stated in its application that its rule is meant to ensure “existing customers are not harmed,” while the utility looks to supply power-hungry data centers. 

O’Donnell said he’s uncertain about whether a data center built now might not end up “obsolete” five years from now as tech needs change. He worries such a situation would leave the facility stranded. Then, he said the associated costs of a utility supporting such a data center could become a problem for ratepayers who would have to cover the rest of the anticipated revenues. He said the shareholders of publicly traded NorthWestern should assume those risks. 

“You never know the future technologically,” O’Donnell said. “Things change in an instant. Somebody comes up with a highly efficient process and Nvidia, the darling of the chip market, is out of business the next day. You simply never know.”

The large load tariff filing seemed to anticipate O’Donnell’s concerns, at least somewhat. 

If a data center stops using power from NorthWestern before a contract ends, that would cost the customer at least three years of what it would pay for electricity. Additionally, for larger customers that need more than 50 megawatts from NorthWestern, agreements to provide electricity would have to be approved by the currently all-Republican PSC.

In his June 19 motion to intervene, O’Donnell said he wants to participate because he “strongly believes he can help evaluate equal cost allocation and cost analysis distribution as it relates to the application by Northwestern Energy."

The PSC will have to evaluate whether he has a right to intervene as both a NorthWestern customer and a former commissioner by early July, according to the Montana Free Press.

O'Donnell's involvement with the Billings City Council was unmentioned in his filing, though a municipality, the city of Missoula, has intervened in the case.

O’Donnell said he still has research to do himself in the coming days on NorthWestern’s tariff proposal. He described himself as someone in favor of AI, seeing it as necessary as an “innocent bystander” to a potential tariff on data centers. However, he wants to guarantee some sort of involvement as data centers proliferate and he worries about the future strain the infrastructure might place on the grid. 

“We need to be involved in it,” O’Donnell said. “We need to be a key player in it. We can't be dominated by it.”