House committee advances study of data centers’ energy and water impacts

The House Energy, Technology, and Federal Relations committee advanced House Joint Resolution 46, a study resolution that would task an interim committee with examining the energy, transmission and water impacts of data centers in Montana.

Sponsor Tom Millett opened the hearing and urged the committee to study how data centers, particularly newer AI-focused and cryptocurrency-mining operations, could increase statewide electricity demand. Millett said national forecasts show wide variation in projected data-center electricity demand growth and cited a report from the Electric Power Research Institute estimating an increase between roughly 29% and 166% from 2023 to 2030; he also told the committee that two proposed data centers could each draw as much as 400 megawatts by 2030, a figure he used to show the scale of potential new loads.

Why it matters: supporters said the study would give Montana time to assess whether its generation, transmission and distribution systems — including distribution co-ops — can handle large new loads without shifting costs to residential customers or overbuilding generation. Industry and utilities urged the committee to include co-ops and other local providers in interim work. "We want data centers to be good community partners and to continue to support electric system reliability, affordable costs for everyone," said Derek Goldman of the Northwest Energy Coalition.

Proponents and utility representatives highlighted several recurring concerns: whether data centers will require new generation or transmission; how they might affect rates for residential customers; water use for evaporative cooling in drier climates; and land-use impacts from large campuses. Mark Lambrecht of the Montana Electric Cooperatives Association asked that electric cooperatives have a seat at the interim table, saying co-ops frequently receive data-center inquiries but often lack available megawatts and transmission capacity to serve very large loads.

Environmental and renewable-energy groups also supported the study. Anne Hedges of the Montana Environmental Information Center said the issue is new and evolving and that the interim committee should examine options such as a special rate class or other protections to prevent cost-shifting onto households. McKenna Sellers of the Montana Renewable Energy Association suggested the study consider on-site generation and battery or renewable-hydrogen options as ways data centers might reduce grid impacts.

Committee members asked whether consumer-protection advocates would be included in interim work and whether the study would search for particular conclusions. Millett and others said that an interim study is intended to gather information and that existing committee membership includes a consumer-council representative; Millett closed by urging a due pass.

Outcome and next steps: the committee took executive action later in the session and concurred in HJ46, sending the study resolution to the floor for further consideration.

The measure proceeds as a study referral; next steps include the interim committee’s schedule and membership decisions and any reports or policy recommendations that result from the study.