Montana tribes take over 194-MW Kerr hydro project under FERC license terms

With a payment of $18.2 million, the Confederated Salish and Kootenai Tribes have acquired the 194-MW Kerr Dam hydroelectric project in Montana from NorthWestern Energy under 30-year-old terms of Kerr’s Federal Energy Regulatory Commission license.

FERC Chairman Norman Bay attended a ceremony Sept. 5, marking the handover of the dam and its renaming as Salish Kootenai Dam. The transfer makes Confederated Salish and Kootenai the first tribes in the nation to own a major hydroelectric project.

When the Kerr project (No. 5) was relicensed by FERC in 1985 to Montana Power, NorthWestern Energy’s predecessor, the license made the tribes a co-licensee and directed that after 30 years, the license would be fully transferred to the tribes upon payment of an agreed amount. The federal Office of Indian Energy and Economic Development last year awarded $1.2 million to the Confederated Salish and Kootenai Tribes to help them acquire critical expertise and infrastructure necessary for the final stages to acquire and operate Kerr.

“We paid the conveyance price and NorthWestern accepted,” said Chief Executive Brian Lipscomb of Energy Keepers Inc., a corporation created by the tribes to acquire and manage the project. “Under the contract that was negotiated 30 years ago, today we can rest assured that both parties have performed, in good faith, and both EKI and NorthWestern Energy have met their obligations — allowing the tribes to become owners of Kerr Dam.”

Over tribal objections, the dam was built in the 1930s on the Flathead River near Polson on waterfalls that were culturally important to the Salish, Pend d’Oreille and Kootenai people. Energy Keepers noted 14 tribal members died in construction-related accidents at the dam.

“EKI staff alone operates the facility — the last NorthWestern operator recently retired,” Lipscomb said. “… We haven’t left any rocks unturned regarding safety, security, operations and business administration. We are ready for this.”

FERC seeks settlement on Kerr power sales to irrigators

FERC issued an order Sept. 17 setting a hearing and appointing a settlement judge to determine whether Kerr Dam’s new owners will continue to make part of the project power available to the United States on behalf of the Flathead, Mission and Jocko Valley Irrigation districts.

The 1985 FERC license provided that Montana Power, and its successor NorthWestern Energy, would provide low-cost power to the irrigators but declined to require that of the tribal owners. Instead the license provides that FERC would set a hearing on the matter if requested by the parties. The irrigation districts made such a request in May.

FERC set the matter for trial-type hearing but directed that a settlement judge be appointed and encouraged the parties to reach an agreement before hearing procedures commence.

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