STORY BY RYAN HALL | RURAL MONTANA EDITOR
Data centers and their potential impact on the Montana economy was the topic of this year’s Economic Outlook Seminar held annually by the Bureau of Business and Economic Research (BBER), which is housed at the University of Montana.
The statewide tour focuses on one topic each year, and its impact on the economy. Last year, energy was the focus.
BBER Director Jeff Michael showed slides discussing what impact a data center would have on Montana’s economy, with four phasing scenarios of 500 megawatts each, up to a total of 2,000 MW. The hypothetical model was set in rural Yellowstone County, “based on a true story,” Michael added.
“The biggest issue is risk,” he said in an interview. “What if it’s a bubble situation?”
He said that the data center would have no impact on electricity rates. While data centers increase demand, driving rates up, they also lower prices through economies of scale and by spreading out fixed costs by adding additional use during times that typically are low use.
Michael said the model showed a $20 billion capital investment, not counting any on-site power generation, and took two years to build. He added two years of construction for each additional 500 MW phase, up to eight years for a 2,000 MW data center.
Michael said the model showed that about $2 billion of the investment would be for materials or labor from Montana.
As for employment impact, Michael said a 500 MW data center would create about 168 permanent jobs, while a 2,000 MW data center would create about 373 permanent jobs. Accounting for indirect jobs, a 500 MW data center would create 390 long-term jobs, and about 2,000 total jobs.
Michael also described other economic impacts, including $40 million in income during operations of a 500 MW facility, or $60 million during the operation of a 1,000 MW facility.
Finally, he looked at property tax impacts, noting that a 500 MW data center, at Montana’s favorable tax rate for those facilities, would pay $33.2 million annually, of which $13.8 million would fund property tax reductions for others, and $19.4 million would represent new revenue to state and local governments.
Michael also gave attendees a briefing on the state of Montana’s economy as of July, including:
- Jobs are flat
- Wages are rising
- Big investments are coming into the state (Quantica in Broadview, Janicki in Great Falls)
Michael said there are also limiting factors for Montana, such as consumers in the state spend 27 percent more on gasoline than the national average, so the high prices this year have impacted the state more than other places. He noted there are some positives from that trend as well, such as oil-drilling permits in the state being at their highest level since 2014.
He said the rest of 2026 hinges on a few things, with oil prices at the top of the list as Montanans and tourists drive a lot. Population growth and migration into the state are stabilizing. Additionally, home prices have flattened out and inventory is increasing, and while incomes are rising faster than home prices and property tax cuts were instituted, buyers are getting no help from mortgage rates. It is also unknown how the new second-home tax will impact the market.
The other question is with at least three large data center proposals being withdrawn in the last year, will a data center project break ground and, if so, how many and when?