3 takeaways from the Gazette's reporting on the planned data center for Yellowstone County

On July 1, NorthWestern Energy sent an email that has since set off several filled community meetings and bipartisan outcries over what might be soon to come in a data center in Yellowstone County. The email was NorthWestern's non-binding letter of intent to provide power up to 1,000 megawatts to Quantica Infrastructure for a planned data center. Such an amount is roughly two-thirds of power NorthWestern currently owns.

The letter of intent with the nascent developer would then be announced by NorthWestern at the end of July. Prior to that, the two entities privately entered into a non-disclosure agreement several months before on Nov. 12, 2024.

With NorthWestern’s announcement, Quantica and related Big Sky Digital Infrastructure then began a soft launch of its public relations campaign by providing climbing walls, buying concessions and burger flipping for the residents in and near Broadview.

Then in January, environmental groups and other advocacy groups began organizing community meetings on what to expect with data centers, speaking to residents’ fomenting concerns about future data centers that have faced growing opposition. Around that time, Quantica began holding weekly office hours. Quantica’s associates sat in the back rows of the events, listening.

Beyond the NorthWestern letter, speakers at the events could only guess about what sort of impact the data center planned for Yellowstone County might have, but if other projects nationally had any indication, it was less than positive.

For the most part, the public can still only guess.

Quantica hasn’t secured a customer for their data center, and how is it going to share plans before they even know what is wanted for the project. Much of those water questions or power questions can’t be answered beyond their website and that public version of the letter of intent.

That can be terribly unsatisfying for an information-hungry public and for my work as a breaking news reporter.

What’s left then to report is history. History of a past cryptomining effort, history of projects unfinished, and, of course, history of leadership’s own statements.

Here’s some takeaways and remaining notes from my recent reporting on Quantica’s proposed data center.

Developers have always viewed the Broadview substation as a powerful asset

Before there were plans for Quantica’s data center next to NorthWestern’s Broadview substation, a cryptomine wanted to get power from it.

Before there were plans for a cryptomine, there was Buffalo Trail Solar and Wind, which looked to distribute its energy using the substation, one of the largest in the state.

Before there were plans for the solar and wind project, there were originally plans for a solar project, which submitted plans to connect to the project in 2015.

It answers the most basic question of why Broadview? Because at first glance, the water that the data center will inevitably need isn’t readily available. While planned data centers in Butte have a lake they could access for industrial purposes, Quantica’s leadership has thrown out the idea of piping water from the Madison aquifer, thousands of feet deep and likely needing to be cooled and treated once it reaches the surface. If past projects like with the Central Montana Regional Water Authority provide any indication, such a development would cost more than a hundred million dollars. Such a cost would likely be transferred onto their customer whomever it may be.

Another reason for Broadview is what those past unfinished projects accumulated over years. More than 5,000 acres of land isn’t cheap to acquire for a project still in need of a customer. Quantica got most of the land for free.

The wind and solar project assets were owned by Quantica’s parent company EnCap Investments and laid dormant for years, before Quantica’s CEO pitched the idea of using the renewable assets to power a data center. Quantica’s press release would tout the idea at the end of July, with the potential of providing any potential customers with a quicker way of connecting to the grid.

There’s money to be made in data centers

If there’s one takeaway from our reporting on the FX Solutions’ lawsuit against Quantica and others, let it be that developers know there’s money to be made with data centers, even if it might require building a wind and solar farm in the process.

The lawsuit filed by previously infamous Rick Tabish and his associated Missoula-based cryptomining outfit FX Solutions alleges that Quantica and EnCap Investments cost him likely more than a billion dollars, after they tried to scramble his plan. Furthermore, they took his idea of connecting to the planned Buffalo Trail Wind and Solar to power his cryptomine. He had an informal agreement to purchase power from former EnCap-founded developer Broad Reach Power after struggling to connect to NorthWestern. Broad Reach paid $5.5 million for land

And now, the developers are “filling their pockets with data center money.” The lawsuit alleges that he lost potentially more than a billion dollars.

Somewhat related, but a takeaway throughout this is repeating that Quantica doesn’t have a customer yet. That purported data center money has yet to arrive.

Tabish’s attorneys are from a powerful law firm with Edwards & Culver, a Billings firm that has historically reached multi-million dollar verdicts and settlements.

Cracks in the argument are already beginning to show in recent court filings. One of the defendants in the lawsuit stated they dissolved before the complaint was even filed, meaning they can’t be sued.

And Quantica stated in a recent filing that there was only an agreement to agree, with the agreement not being enforceable, as Tabish likely knew. The lawsuit noted that even if there was a power purchase agreement, there’s still nothing to provide power to. The most evidence that Tabish had a data center eyed there is some excavation work done in the roughly six years he’s owned the property.

Developer’s Montana roots run deep

Five of the twelve people leading Quantica have Talen Energy and or Pennsylvania Power and Light, both of which have had led Colstrip’s power plant over the years. Big Sky Digital Infrastructure is partnered with Western Skies Strategies, a communications and consulting firm led by Jess Peterson. Peterson is a Montana native from Roberts in Carbon County and is now the president of the board of the Billings Chamber of Commerce.

Chief Financial Officer Charlie Baker lived in Chinook, before being the Chief Executive Officer of Pennsylvania Power and Light, among other leadership roles in the state.

Beyond the rhetorical device of describing yourself as a lifelong Montanan, I mention these things because it shows the influence and the institutional knowledge behind the data center’s team, even if a massive data center like this is new for Montana.

Whether people want the data center or not, the team behind it likely isn’t ignorant of the opposition they face locally.

Past employees at Talen Energy have likely seen challenges before with the Colstrip plant (one of the dirtiest in the nation, according to the Environmental Protection Agency) from some of the same environmental groups that are rallying opposition to the data center now.

Though how much of a boon their ties will be with getting the data center done, remains to be seen. For the final time now: first, they have to get a customer.