Courtesy Rob McDonald, CSKT
Kerr Dam with all gates flowing

Salish Kootenai Tribes Will Acquire Kerr Dam Via Arbitration

Jack McNeel
3/21/14

Montana’s Confederated Salish and Kootenai Tribes (CSKT) will become the first tribes in the nation to own a major hydroelectric facility.

CSKT recently completed arbitration meetings that will allow them to purchase Kerr Dam on the Flathead River. The price tag for this purchase was set at $18,289,798 and the purchase will officially take place in September 2015.

The dam itself is 541 feet long and 205 feet high. That’s 54 feet higher than Niagara Falls. It’s located on the Flathead River about five miles from Polson, Montana, and Flathead Lake, the largest natural lake west of the Mississippi.

Energy Keepers, Inc. is a corporation wholly owned by CSKT and was established to acquire, operate and sell power from the Kerr hydropower dam which is located within the reservation.

“Our ancestors had the vision that we’d recapture the resources surrounding the dam,” Ronald Trahan, CSKT Council Chairman said. “Moving a step closer to that vision has been good for my heart and everyone else on Council. It’s been a long time coming. A lot of hard work and sacrifices brought us here. Through it all we must honor the ancestors who held the original vision to bring us this success.”

The dam was started in 1929 but lack of money delayed completion till 1938. “It was built at a time when the reservation was in the process of being allotted to plat an Indian reservation,” Energy Keepers CEO Brian Lipscomb said. “They built an irrigation allotment on top of that allotment. In the process of constructing the irrigation project they needed power to run the pumps so they developed an electric site where Kerr dam sits now.”

Left to right: Brian Lipscomb talking with tribal council members Carole Lankford, Ron Trahan and Terry Pitts. On the wall behind: Chief Charlo ,Salish; Chief Alexander, Pend Oreille; Chief Koostatah, Kootenai (Courtesy Rob McDonald, CSKT)

Montana Power arrived, determined the site was large enough to build a dam and agreed to provide power to run the pumps, and they would keep the rest of the power.

The initial license by the Federal Energy Regulatory Commission (FERC) expired in 1980. The tribes filed a competing license application in 1976 and after nine years of negotiating reached a settlement with Montana Power Company. “We would receive $9.5 million for land rental payment and have the opportunity to acquire the facility at the original cost of construction, less depreciation for the last 20 years of the license,” Lipscomb explained. That opportunity would occur after 30 years, or 2015. “The $9.5 million was to escalate at the CPI (Consumer Price Index) over the life of the ownership of Montana Power Company.”

That began in 1985 and has escalated upwards since. In 1999 Montana Power Company sold to Pennsylvania Power and Light and that’s who the Confederated Tribes have been dealing with via mediation that resulted in the purchase price.
Lipscomb pointed out that the $9.5 million annual payment in the first year has now reached about $19 million and will approach $20 million when the tribes acquire the property.

Brian Lipscomb, CEO for Energy Keepers (Courtesy Rob McDonald, CSKT)

When arbitration meetings began PPL-Montana was asking $49.4 million for the dam. CSKT was offering $14.7 million. “It took years of discussion and even arbitration” to reach this agreed on price of $18,289,798 Chairman Trahan said.

The dam raised the level of Flathead Lake about 10 feet. Lipscomb explained, “It doesn’t fill the lake fuller than it ever did, it just holds it full longer, so there’s been quite an impact around the shoreline.”

“The land payment will continue and there will be additional revenue above that which will come back to the tribe,” Lipscomb said.

Actual projections on how much this will benefit the tribe are confidential at this point, however Lipscomb was able to say, “Kerr generates about 1.1 million megawatt hours of electricity on average per year. The current market price we project when we take over is about $32 per megawatt hour. That gives a sense of the gross revenues.” That’s enough to provide power for upwards of 145,000 homes.

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