Steve Bullock (D)

HELENA, Mont. (Legal Newsline)- PPL Montana owes the state $41 million for the utility's past use of public riverbeds to generate power, the state Supreme Court ruled Tuesday, drawing praise from Attorney General Steve Bullock.

The high court also ruled in its 5-2 decision that the state can charge PPL Montana ongoing rent for the company's 10 hydroelectric dams it bought from Montana Power Co. in 1999.

The $41 million owed by PPL Montana will go into the state's public land trust, officials said.

"Today's decision is a victory for generations of Montanans and confirms what we've known all along: Our rivers belong to the people of Montana, not out-of-state corporations," Bullock said. "In the future, power companies that want to use our streambeds to make hundreds of millions of dollars will have to pay full market value."

With Tuesday's decision, the state Land Board has the authority to decide the rent PPL would pay from 2008.

The company is also on the hook for millions of dollars in interest from the time when a district court judge in 2008 ruled that the company owed $41 million in back rent. That is because Montana law says 10 percent annual interest is charged on any judgment that isn't paid.

Bullock noted that farmers and ranchers who use Montana riverbeds for irrigation are not under the same rental obligations as the power companies.

The high court's decision put to rest the issue of whether the state owned the riverbeds where PPL Montana's dams are erected. At issue was whether the Missouri, Madison and Clark Fork rivers were navigable at the time Montana became a state in 1889, giving ownership to the state.

At trial, District Judge Thomas Honzel of Helena ruled in the state's favor, a decision the justices upheld this week.

"The concept of navigability for title purposes is very liberally construed by the U.S. Supreme Court," Justice Pat Cotter wrote for the high court's majority. "A river does not have to experience 'actual use' at or before the time of statehood, so long as it was 'susceptible' of providing a channel for commerce."

In a dissent, Justice Jim Rice wrote that PPL provided evidence showing that portions of riverways near the dams were not navigable at the time of Montana's statehood.

The majority's decision "makes one wonder just what evidence the court would have considered sufficient for PPL to defeat summary judgment in this case," he wrote. "This court has steadfastly guarded against depriving a party of the right to trial by the improper entry of summary judgment."

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