In 2015, the Confederated Salish and Kootenai Tribes are poised to be the first tribe to operate a major hydroelectric power plant

STORY By MYERS REECE

Fifteen years before the Hungry Horse Dam and 37 years before the Libby Dam, at the tail end of the Great Depression, the Kerr Dam was completed five miles south of Flathead Lake. Today, it is one of the oldest federally licensed hydroelectric projects operating in the United States, generating enough energy to power nearly 150,000 homes. But if the facility’s electricity production has long been reliable, the question of who is in charge of that production has been less certain.

Now, more than 80 years after the dam was first licensed and in the wake of decades of legal wrangling, the Confederated Salish and Kootenai Tribes are poised to take over full ownership for the first time. In exercising their ownership option, expected to come to fruition in the fall of 2015, they will become the first tribe in the country to own and operate a major hydroelectric power plant. Northwestern Energy announced in September that it would be purchasing 11 dams from PPL Montana, including Kerr, but the tribes say the deal will have no effect on their own plans other than perhaps a change in negotiating parties.

One big question mark in the ownership transfer process should be answered in March when an arbitration panel is expected to decide the dam’s price – competing figures have been tens of millions of dollars apart, with PPL Montana estimating the price to be over $50 million and the tribes arguing it’s well under $20 million.

In the meantime, the tribes are continuing to prepare for the takeover, implementing a systematic acquisition strategy, training employees and studying the complexities of running a 194-megawatt dam. A tribal corporation called Energy Keepers, Inc. has been established to oversee the acquisition and subsequent operation of the dam, which includes the towering concrete arch structure itself and the various pieces that give the facility the power to harness energy: turbines, generators, penstocks, transmission lines and more.

It’s been a long and winding road to arrive at this point, beginning over a century ago. In the wake of the 1904 Flathead Indian Irrigation Project, crews began building the Newell Tunnel, at the site of what would later become Kerr Dam, to provide power for irrigation. After a couple of years of construction, the Newell Tunnel was abandoned and never completed. Though the tunnel may not have led directly to the Kerr Dam, it identified a location for a future hydropower site and helped lay a foundation for the squabbles that would come. The tribes considered the site sacred and many members were opposed to altering it from its natural state.

By the 1920s, Rocky Mountain Power, a subsidiary of the Montana Power Company, had begun exploring the possibility of building a power facility on the Flathead River. At the time, the Montana Power Company had strong ties to the Anaconda Copper Mining Company, which needed electricity for its mining operations in southwest Montana. In 1930, Rocky Mountain Power obtained 50-year federal license to build and operate the Kerr Dam.

Crews broke ground on May 23, 1930, though the Great Depression would stall construction for several years. At the height of construction, more than 1,000 employees worked on the dam. A number of workers – over a dozen in some accounts – died during the construction process. The dam, which originally had only one turbine-generator unit, was completed in 1938 and was named after Montana Power Company president Frank Kerr. Its final dimensions were 381 feet long and 200 feet high – taller than Niagara Falls.

An additional turbine-generator unit was installed in 1949 and then a third in 1954 to take advantage of additional water storage that had become available following the previous year’s completion of the Hungry Horse Dam. Then in 1976, in anticipation of the approaching expiration of Montana Power Company’s FERC license, the tribes filed their own licensure application, formally signaling their desire to have more control over a dam located on their reservation. In the absence of ownership, the tribes have long received annual land-use payments for the dam, providing a steady and important funding source for the tribal budget.

As it considered the two competing applications for a 50-year license after the original license expired in 1980, FERC issued a series of one-year licenses to the Montana Power Company, leading up to a 1985 settlement that would spell out the tribes’ right to eventually take over the dam. The 1985 agreement granted co-licensure to the tribes and Montana Power Company, while providing the option for the tribes to claim full ownership after 30 years. As part of the Montana Power Company’s asset sell-off after state energy deregulation, PPL Montana purchased the dam in 1999.

Tribal officials view the dam takeover as a major financial opportunity, as well as a potential model for other tribes seeking to control more of their own economic destiny and natural resources. It took a long time for the tribes to earn the right to build the model, but it won’t be that much longer before they get to find out how well it works.