Montana lays out riverbed case to US Supreme Court

HELENA — Montana is asking the U.S. Supreme Court to stick with a lower court ruling that the state owns the riverbeds where hydroelectric dams sit and can charge power companies rent for their usage.

PPL Montana has gone to the nation's high court, asking it to reverse a 2010 ruling by the Montana Supreme Court that declared the riverbeds were state property. The U.S. Supreme Court is scheduled to hear the case in December.

Montana Attorney General Steve Bullock argued in a Thursday filing that state title to the riverbeds stretches back to the 1800s. The argument relies upon historical records that even include notes from the expedition of Meriwether Lewis and William Clark more than 200 years ago.

The state is expecting PPL to pay $40 million in current rent, plus damages for not paying rent for land its dams sit on from 2000 through 2007, and even more in future rent.

The court decision declared that the land under the dams is like other public land that is rented out by the state, such as to those who graze cattle or drill for oil.

PPL Montana, however, argues that the state overstepped its authority in a decision that reverses more than a century of precedent treating the riverbed under the dams either as private property or federal land. The company argues federal permits grant it the right of usage.

PPL has said that the court needs to enforce its right to use the land or see other states make belated claims for past rent in similar situations.

Much of the legal arguments hinge on whether the river was navigable at statehood, part of a test to determined state ownership.

PPL Montana argues that the portions of the rivers where its dams are located were not navigable at time of statehood in 1889, saying early expeditions took weeks to portage around sections of the river.

The state says that portions of three rivers that are in dispute have a history of navigation dating back to Lewis' description of rivers that run through "such a mountainous country and at the same time are so navigable as they are."

Bullock argues in its latest court filing that adoption of PPL's ownership definition would have far-reaching consequences that would hinder river and wildlife management, and lead to more legal fights.

PPL Montana says the rent charged on its dams is a "hidden tax" that will be passed onto ratepayers. The attorney general's office has pointed out the argument is flawed, since after deregulation the company can only sell the electricity for what the market will bear.