NorthWestern Energy has announced agreements to supply significant amounts of electricity to two proposed data centers in Montana, with combined power demands set to exceed the capacity of the state’s newest gas-fired power plant. The development raises questions about Montana’s energy infrastructure and its ability to meet growing demand while maintaining reliable service.
The larger of the two projects involves a yet-to-be-identified company, with NorthWestern Energy agreeing to provide a minimum of 50 megawatts of power starting in 2027, scaling up to 250 megawatts or more by 2029. For perspective, the Yellowstone County Generating Station in Laurel, which began operations in 2024, produces 175 megawatts.
In a separate deal, NorthWestern plans to supply the Atlas Power Group data center in Butte with 75 megawatts starting in 2026, with a potential increase to 150 megawatts by 2030. Combined, the power needs of these two projects would surpass the total capacity of the Yellowstone plant.
At a recent roundtable with energy suppliers and data center developers, Governor Gianforte emphasized the need for affordable and predictable energy to attract investment. Industry representatives highlighted the importance of long-term energy agreements and regulatory flexibility to support capital investments in Montana.
NorthWestern Energy faces mounting pressure to expand its generation capacity. The company noted that data centers qualify as “large energy users” and pay additional demand charges, which may help offset costs for residential customers. However, experts warn that the surge in demand could strain Montana’s grid, especially during peak usage periods.
Earlier this year, NorthWestern Energy announced plans to acquire a larger share of the coal-fired power plant in Colstrip, further diversifying its energy portfolio. Still, company representatives suggested that regulatory processes may need to evolve to accommodate the rapid growth in energy needs.
By: DNU staff