Montana Challenges Tech Giants Over False Green Marketing as Energy Costs, Grid Concerns Mount

HELENA, Mont. — Montana Attorney General Austin Knudsen is leading a 16-state investigation into major tech companies’ renewable energy claims, alleging Microsoft, Amazon, Google and Meta are misleading consumers about their environmental impact while contributing to electric grid reliability problems.

In a 15-page letter sent Wednesday to executives at the four companies, Knudsen and his counterparts from 15 other states allege the tech giants use “environmental accounting gimmicks” to claim they operate on 100% renewable energy while actually relying heavily on fossil fuels.

“As a result of big tech’s misleading energy use claims, coal and natural gas plants are being shut down, putting communities across the country at an increased risk of blackouts over the next few years,” Knudsen said. “In Montana, reliable energy – like fossil fuels – are a vital part of our economy and keep us warm during harsh winters.”

The investigation comes as Montana faces rising energy costs and concerns about big tech’s growing energy demands from data centers.

Renewable Energy Certificate Claims

According to the letter, the companies purchase “unbundled renewable energy certificates” — credits showing renewable energy was produced somewhere — then use those credits to claim their operations run on clean energy despite drawing power from fossil fuel-dependent electrical grids.

The attorneys general cite specific contradictions in company statements. Microsoft claimed it had been “100% powered by renewable energy since 2014” but later set a goal to reach “100% renewable energy by 2025,” according to the letter.

Amazon announced it “achieved its 100% renewable energy goal” in 2023, seven years early, while still using fossil fuel grid power, the letter states. Meta claims 100% renewable energy use but acknowledges a “considerable portion” of its data center emissions come from diesel generators, according to the document.

The letter alleges Amazon used these certificates to account for 8.5 million tons of emissions in 2022, Microsoft for 3.3 million tons, and Meta for 740,000 tons.

“These companies engage in a shell game whereby they purchase unbundled ‘renewable energy certificates’ and then claim the ‘renewable’ attribute of energy that is used by someone else as their own energy usage,” the attorneys general wrote.

Grid Reliability Concerns

The Department of Energy estimates blackouts could increase 100-fold by 2030 if current trends continue, and half the country faces “elevated risk” or “high risk” of electricity shortages in the next few years, according to federal reliability assessments cited in the letter.

The attorneys general argue tech companies contribute to this problem in two ways: their data centers consume massive electricity amounts, and their renewable energy claims pressure utilities to retire reliable fossil fuel plants to attract tech business.

“When big tech companies claim to use 100% renewable energy, they pressure utilities to move away from fossil-fuel-generated baseload power to attract or retain big tech data center development,” Knudsen wrote.

Google’s data center electricity consumption grew 27% in the past year, according to the company’s own environmental report cited in the letter.

Meanwhile, tech companies are seeking to secure nuclear power for their operations, according to the Institute for Energy Research. The letter states companies “are committing to buy most, or all, of the electricity directly produced at existing nuclear plants in some areas of the country.”

Montana Consumer Protection Questions

Knudsen said the companies’ claims could violate Montana’s Unfair Trade Practices and Consumer Protection Act if they are “providing misleading and deceptive information to Montanans.”

Montana’s consumer protection law prohibits false or misleading business statements and allows penalties up to $10,000 per violation.

The investigation’s timing coincides with Montana ratepayers facing higher energy costs. NorthWestern Energy implemented a 4.2% rate increase in July, raising typical monthly bills from about $101 to $118.

A proposed $7.8 billion merger between NorthWestern Energy and Black Hills Energy has raised additional rate concerns, particularly since Black Hills customers in Colorado pay significantly more than NorthWestern customers in Montana.

In Virginia, where about 200 data centers operate, Dominion Energy proposed rate increases in April that would cost residential customers an average of $10 more monthly.

Demands for Information

The attorneys general demand responses by Oct. 27 to 21 specific questions, including complete records of renewable energy certificate purchases, actual electricity sources used over five years, and explanations for contradictory public statements.

The letter asks each company to “identify the actual breakdown of electricity by source that your company has operated on each year for the past five years, including any electricity from backup generators, and not including any consideration of unbundled RECs or similar certificates.”

Companies must also provide analyses of whether their certificate purchases resulted in additional renewable energy generation or actual emission reductions.

The coalition includes attorneys general from Alabama, Alaska, Arkansas, Florida, Indiana, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma, Pennsylvania, South Carolina, West Virginia and Wyoming.

Technical Explanation

Energy experts say unbundled renewable energy certificates can be purchased from existing renewable energy projects, meaning the purchases may not result in additional clean energy generation.

The Federal Trade Commission’s Green Guides suggest renewable energy claims can be made if marketers match non-renewable energy use with renewable energy certificates, but the guides are non-binding and don’t preempt state consumer protection laws.

A recent academic paper noted “there is no reason for purchasing energy attributes unless doing so increases the amount of renewable energy generation and ultimately reduces emissions,” according to the letter.

The investigation represents one of the most comprehensive state-level challenges to tech companies’ environmental marketing practices as artificial intelligence drives increased data center construction nationwide.