Calling the ownership transfer of a Flathead River dam to the Confederated Salish and Kootenai Tribes last month hasty and politically motivated, the all-Republican Montana Public Service Commission on Thursday asked the Federal Energy Regulatory Commission to hold hearings to determine if the public process was properly vetted.
The dam, formerly known as Kerr, was transferred from NorthWestern Energy to CSKT’s Energy Keepers Inc. on Sept. 5 and renamed Salish Kootenai Dam.
In a strongly worded news release Thursday afternoon, the PSC said it had met an Oct. 1 deadline to submit “a renewed request” to FERC for public hearings to determine if the public interest standard was met when it licensed Energy Keepers to manage the dam.
The state commission said the federal agency erred by not setting a public hearing to determine if the transfer of the license is in the public interest.
FERC also erred in not scheduling a hearing “as there are issues of material fact about the lack of financial transparency of Energy Keepers Inc.,” said the Public Service Commission’s chief legal counsel, Justin Kraske, in the eight-page filing.
“FERC’s hasty actions appear to be driven more by politics than by thorough process and sound judgment,” PSC Commissioner Roger Koopman, R-Bozeman, said in the statement released late Thursday afternoon.
An open public process is “a cherished tradition in Montana, viewed by our people as both a cultural norm and a constitutional right,” Koopman said. “FERC has ignored this, and has so ‘federalized’ the matter, without listening to local concerns, that both stakeholders and Montanans in general feel utterly removed from the process. This is not good government.”
“FERC’s proceeding left far too many unanswered questions,” PSC Chairman Brad Johnson, R-East Helena, added. “Those living in the communities affected by this transfer must have ample opportunity to ask questions and provide input, and this proceeding fell short of that standard.”
Commissioner Bob Lake, R-Hamilton, said the original purpose of the dam when it was completed in 1938 was to advance the development of the Flathead Reservation “by addressing increased agrarian impact with a reliable irrigation source, and to provide reliable and affordable power.”
“It’s important that the original purpose for the construction of the dam will continue to be part of the agreement under Energy Keepers’ management,” Lake said.
In his filing, which refers only to “Kerr Dam,” Kraske noted that FERC issued its order approving partial transfer of the dam’s license to Energy Keepers on Sept. 1. The deadline to request a rehearing of that order was Oct. 1.
The PSC's filing came “out of the blue,” Brian Lipscomb, president and chief executive officer of Energy Keepers, said Thursday evening.
“We’re a little perplexed by it,” Lipscomb said. “Of course we’ll study it and look at it and the issues the Public Service Commission is raising.”
CSKT spokesman Rob McDonald said the tribes had just received the filing and were in the process of reviewing it.
“It’s kind of early for us to have any reaction,” he said.
Former state Sen. Verdell Jackson, R-Kalispell, and state Sen. Bob Keenan, R-Bigfork, filed suit to stop transfer of the dam to the tribes on Sept. 3. They maintained the move could result in the Turkish government seeking raw nuclear materials on U.S. soil to blow up the dam or other targets.
Later in the month, a U.S. District Court judge rejected the argument, ruling Jackson and Keenan "failed to raise any fact or point to any evidence in the application for transfer that would materially call into question (the tribes’) suitability to serve as licensee.”
Energy Keepers is an independent power producer, just as PPL Montana was for 15 years before it sold Kerr and other dams to NorthWestern Energy earlier this year.
As such, Energy Keepers and the tribes were provided exempt public utility status under Part 2 of the Federal Power Act, Lipscomb said. That means they aren’t required to open their books to FERC, as public utilities such as NorthWestern Energy are.
“There are many independent power producers across the country that that affects,” he said.
As for the public process, Lipscomb said “literally thousands of comments were taken” in 1985, when FERC approved an agreement that included an option for the tribes to take full control of the dam after 30 years with certain stipulations. The tribes, the Department of Interior, the Flathead Irrigation District and the Montana Consumer Counsel were all part of the agreement.
“We’ll continue to look at this and see if they’re raising legitimate concerns,” Lipscomb said. “We’re happy to talk about it.”