DOJ: News Release

McGrath Joins Suit Seeking Payment from Power-Generation Companies

HELENA – Attorney General Mike McGrath Monday filed an action to join a lawsuit that seeks to force out-of-state power generation companies to reimburse Montana for years of unpaid “rent” on state lands. The companies own and operate dams that are located in Montana and are situated on state lands and waterways.

In its petition, the state joined a suit filed by two Bozeman parents of school-aged children – Richard Dolan and Denise Hayman – and the Great Falls Elementary and High School District against PPL Montana, PPL Services Corp., Avista Corporation and PacifiCorp.

The complaint has its origins in 1889, when Montana was admitted to the Union. McGrath asserts that once Montana became the 41st state, the beds of navigable waters within its boundaries became state lands.

Federal and state laws authorize the leasing of state lands for the development of “power sites” like the 12 dams owned by PPL, Avista and PacifiCorp. Montana law also requires rental payments on leases on such state lands at fair market value.

The complaint says that the state has never been reimbursed for the value of the state land or school trust lands on which the dams and power sites are located. Meantime, the defendants have received “substantial financial benefits” by using the land as power sites and generating hydroelectric power.

“We think this case raises significant issues of public policy regarding the use of state lands,” McGrath said. “Other users of state lands are required to reimburse the people of Montana. The users of these lands should be held to the same standard.”

The suit, originally filed in federal district court in October 2003, says the plaintiffs – Dolan, Hayman, the school districts and the state – have been injured by the companies’ failure to make rental payments. It asks the court to require PPL, Avista and PacifiCorp to compensate the state “for full market value of the interest in the trust lands used and occupied by them.” It also seeks compensatory damages and attorneys’ fees. It does not specify a dollar amount.

Noxon Rapids Dam

Clark Fork River

Avista Corp.

Thompson Falls Dam

Clark Fork River

PPL Montana

Ryan Dam

Missouri River

PPL Montana

Cochrane Dam

Missouri River

PPL Montana

Holter Dam

Missouri River

PPL Montana

Morony Dam

Missouri River

PPL Montana

Rainbow Dam

Missouri River

PPL Montana

Black Eagle Dam

Missouri River

PPL Montana

Hauser Dam

Missouri River

PPL Montana

Mystic Lake Dam

Rosebud Creek

PPL Montana

Madison Dam

Madison River

PPL Montana

Bigfork Dam

Swan River

PacifiCorp

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