It’s a Tale of Two Mergers. It’s the best of times for Wall Streeters who invest in the new merged company going whole hog to lure to Montana some of the estimated $7 trillion data center market. It’s the worst of times for Montana families watching budgets shrink and their utility, once again, reward executives with millions and speculate in an unproven market.
For the past 10 months, 350 Montana has been an “intervener” in the Montana Public Service Commission’s (PSC) “merger docket,” the largest utility restructuring in a generation. We’ve brought to the table an assertive, home-grown energy policy lawyer, Monica Tranel. We’ve brought in expert witnesses to scour the utility’s documents and testify at public hearings. And we’ve protested the PSC’s genuflecting to NorthWestern, hiding the company’s plans to sacrifice Montana towns and our climate to fossil fuel dependent data centers.
- To read Monica Tranels’ 217 findings of fact from the PSC’s merger docket, CLICK HERE:
- To read Monica Tranels’ recommended 10 conditions before the PSC approves the merger, CLICK HERE:
The information NorthWestern tells investors in quarterly earnings calls and insider events is quite different from what it tells the press and its ratepayers. The PSC has stamped the most important parts of the proceedings CONFIDENTIAL. Commissioners have bullied and berated our lawyer. They’ve suspended one of their own, Brad Molnar, after he confronted the utility. And, with a last-minute substitute commissioner appointed by the Governor, who had heard none of the evidence over 10 months, the PSC is now poised to approve the merger.
NorthWestern is a regulated monopoly. It’s a public-private hybrid, where 400,000 Montanans allow one company to supply electricity and natural gas and generate a profit regulated by an elected body, the PSC. The company agrees to public oversight, and the PSC works – in theory – to make sure the company provides adequate power at just and reasonable rates.
Utilities and their stockholders are often unhappy in this regulated environment. Recall that in the late 1990s Montana Power convinced Governor Marc Racicot and the Legislature to allow it to sell all Montana’s hydroelectric dams and transform into a fiber-optic communications firm. Touch America quickly went bankrupt. Montanans had to buy the dams a second time after NorthWestern came to town. Many people who owned stock in Montana Power lost their life’s savings, while Montana Power’s executives jumped ship with millions of dollars.
NorthWestern has come up with a similar scheme. Executives have told investors the new, merged company wants “organic, A-I-driven growth opportunities.” The company hopes, according to one executive, “. . . to capture more than our fair share of growth in the large service territory.” NorthWestern’s CEO, Brian Bird, says the merger frees him up to pursue “balance sheet capacity” and “incremental capex opportunities.” He imagines 5 to 7 percent growth. The new company will supply power to eight states. Bird testified, “In every state that we operate, if you’re going to do business and need our services, you’re going to be talking to us.” Translation: Here come the data centers.
In fact, very late in the proceedings, it was revealed that NorthWestern had already reached agreement to provide electricity to Quantica, a company building a moon-crater-sized data center in Broadview, outside Billings. But guess what? The PSC refuses to allow the Quantica agreement to become part of the record in the merger docket. The details are confidential.
In response, Monica Tranel has testified that “. . . a transition of this magnitude must be held to the highest standard of review, requiring a clear, affirmative showing of net benefits to protect captive retail ratepayers.” She’s asked the PSC to slow the docket down, make the proceedings more transparent, and re-open the evidentiary hearing for the new commissioner. If they approve the merger, she asks that they at least impose conditions that protect Montana ratepayers. She thinks the data centers – and not the ratepayers – should pay for infrastructure such as transmission lines and gas pipelines.
When asked how the merger will benefit ratepayers, NorthWestern talks about efficiencies of scale. Do these efficiencies include laying off Montana workers? we asked. That’s confidential.
Company officials say ratepayers will get a one-time, $10 million discount on their rates. That sounds huge but works out to about $18 a family. And it’s peanuts compared to $60 million in bankers’ fees and $50 million in executive payouts (golden parachutes). NorthWestern CEO Brian Bird will pocket $16 million. Four other NorthWestern executives will share $13.2 million. Executives of the other company, Black Hills, will take home $20 million. It’s obscene.
There are more ugly details that involve the coal-fired plants at Colstrip, methane plants that will be built, gas pipelines, a transmission line to Wyoming, and NorthWestern’s lack of a plan for doubling the electricity in Montana. Not to mention the question of where these data centers will get water to cool their acres and acres of processors. At a time of drought, dying rivers, megafires, and extreme weather, what’s the climate cost of all these fossil fuel plants?
Tranel has asked the PSC not to approve the merger until Montanans can get a grip on these details. If our experience so far is borne out, the PSC will continue to ask, “How high?” whenever NorthWestern asks the commissioners to jump.
What can you do?
1. Email the PSC (pschelp@mt.gov). Mention Docket 2025.10.078. Tell commissioners not to approve the merger. Tell them you’re a ratepayer. List your concerns.
2. Go to our website, 350montana.org, and give a donation. Last year, we raised and spent an amazing amount for an all-volunteer organization – over $100,000 for our lawyer, expert witnesses, travel, and all the incidentals of this intervention. Next year, should the PSC approve the merger, there may be court costs . . .
3. Stay tuned.