Montana committee hears wide debate on bill to limit PSC authority over large electric customers

Representative John Fitzpatrick opened the House Energy, Technology and Federal Relations Committee hearing on HB 877 by saying the bill “simply says no” to the Public Service Commission (PSC) having authority to prevent a regulated utility from serving a new large customer.

The bill, presented as the Montana Data Center and Industrial Development Act, would clarify that the PSC cannot prohibit a public utility from providing service to large customers and would reaffirm the PSC’s role in setting rates and tariffs for those customers. The sponsor said the measure is meant to promote economic development while leaving rate-setting authority with the PSC.

Why it matters: committee members heard that the proposal affects who can take large industrial loads and how the costs of integrating those loads would be allocated. Supporters said the measure would let Montana utilities pursue industrial and data‑center investment; opponents said it risks shifting significant costs and reliability risk to residential and small commercial customers.

Opponents included Sarah Clerget, representing Talon Energy and a large‑customer coalition, who described the group as “soft opponents” and urged amendments. Clerget said current law recognizes customers who chose “choice” status in 2007 and warned the bill as drafted would force those choice customers and their successors into fully bundled regulation, harming existing supply contracts and raising costs for large customers.

Brad Molnar, president of the Montana Public Service Commission, warned that removing PSC discretion to block service could leave residential customers bearing new costs if utilities take on very large industrial loads. Molnar cited the January 2024 winter event when Montana faced severe shortfalls and said adding very large, baseload industrial loads could require multibillion‑dollar generation or transmission investments that ultimately fall on ratepayers.

Anne Hedges of the Montana Environmental Information Center said the PSC already has a crucial ability under existing law to ensure new large customers won’t adversely affect other customers, and she cited a Harvard study and regional examples showing data centers can shift costs onto existing utility customers if protections are not written tightly.

Proponents included Alan Olson, director of government affairs for Northwestern Energy, who said the measure is about economic development and that utilities need certainty to pursue generation and service arrangements. Todd O’Hare of the Montana Chamber of Commerce said energy availability is “the single issue” businesses raise across the state and argued Montana should enable new investment.

Committee discussion focused on the 5‑megawatt threshold for “choice” customers, the PSC’s remaining authority to set tariffs and rate‑making consequences, whether new industrial loads would be interruptible, and how to prevent stranded costs for existing customers. PSC staffer Trevor Graf said the bill “clearly states” the commission would be prohibited from examining some contracts in the same way as before, which raises concerns about where ancillary costs would be reviewed.

The committee later took executive action and voted to table HB 877. The tabling motion passed on a roll call (tally recorded in committee: 8 ayes, 6 noes), sending the bill out of active consideration at this meeting.

Votes at a glance: HB 877 was tabled in committee (motion to table passed 8–6).