Montana tribes will be the first to own a hydroelectric dam

by Sarah Jane Keller

Most of the people who run Kerr Dam on northwest Montana's Flathead Reservation sit hundreds of miles away, and some are even across the country, in the offices of Pennsylvania Power and Light.

But that's likely to change in 2015, when the Confederated Salish and Kootenai Tribes have the option to buy the dam, thereby becoming the country's first tribal hydroelectric owners and operators. Rocky Mountain Power Company built the 205-foot-tall impoundment on the Flathead River, four miles downstream of Flathead Lake, against the will of many tribal members in 1938. Gaining control of Kerr Dam will have significant economic and cultural benefits for the Salish, Kootenai and Pend d'Oreille – the three tribes of the Flathead Reservation.

It's also given tribal member Daniel Howlett the chance to come home. When he left the Flathead Valley to study business and renewable energy management in Denver, he never expected to have a career on the reservation. Now, he's a power-marketing coordinator for his tribe's new energy company, which plans to offer 1.1 million megawatt hours of electricity from the dam annually, enough to power roughly 79,000 homes each year.

The Confederated Tribes already run the reservation's utility company, have a top-notch natural resources department, and oversee the first tribally administered wilderness in the United States. Obtaining the dam will be another major step in self-determination, probably with impacts far beyond Montana.

Other tribes, such as the Confederated Tribes of Warm Springs in Oregon and the Seneca Nation in New York, are vying for full or majority ownership of hydroelectric dams on their land. They are keeping track of the Kerr Dam purchase, which will shape outside perceptions of tribal energy development. "I think a lot of eyes across the nation, and certainly Indian Country, will appreciate the milestone significance of this achievement," says Pat Smith, a former attorney for the Salish and Kootenai.

The 1904 Flathead Allotment Act paved the way for Kerr Dam by allowing white homesteaders to take over more than half of the Flathead Reservation. Rocky Mountain Power Company then built Kerr Dam to supply electricity to the state's booming copper industry and homesteaders' farms. Traditional elders opposed the dam, which destroyed a productive fishery and drowned the sacred falls of the Flathead River. But the newly formed tribal government, lacking legal capacity and coping with poverty, was focused on securing construction jobs and a rental fee.

Nearly 40 years after Kerr Dam began producing power, the Salish and Kootenai began competing to take over its federal operating license. Their bid wasn't successful, but the tribes settled for exclusive rights to purchase the facility in 2015, and a larger rent payment, which is currently around $19 million a year.

Controlling a major resource at the center of the Flathead Reservation is more than symbolic: It has real implications for the dam's operations and revenues. In 2010, the Salish and Kootenai formed a tribal Department of Energy and created a power company to acquire and operate Kerr Dam. Every tribal member is a shareholder of Energy Keepers Inc.

Environmental stewardship is a big part of the company's mission, and the Salish and Kootenai have already made major gains in that area. In 1997, the tribes argued for restoring a more natural flow to the river. That ended the dam's profitable role in meeting peak electricity demands, which caused wild swings in river levels, harming riparian areas and wildlife.

Over the last decade, the dam's revenues have ranged from around $25 million to $60 million annually. Owning it will give the tribal government money to bolster education, cultural programs and health care, as well as to start new businesses and buy back lands lost during allotment. "You can never outweigh the damage caused over time," says tribal chairman Joe Durglo. "But we're going to move to the future, to make a positive impact on the tribe."

At the moment, there are more pressing concerns than spending unrealized revenues, including resolving a dispute over the dam's price. The Salish and Kootenai think it is worth $13.6 million, but its current owner, Pennsylvania Power and Light Montana, values it at $49.4 million, a total that includes past environmental damages paid to the tribes. NorthWestern Energy may buy PPL-Montana's 11 hydroelectric dams next year, but that won't change the tribes' plans.

Meanwhile, the Salish and Kootenai are assembling an energy company from scratch. Energy Keepers is operating under U.S. law, in part to ease potential customers' concerns about tribal exemptions from lawsuits. The company is also navigating a maze of federal regulations while building engineering, business, and dam operations expertise. So far, Energy Keepers has hired 12 out of 21 new employees, mostly tribal members.

Howlett is one of them. Last summer, Energy Keepers sent him to Portland for nearly two years of training with the Bonneville Power Administration. But Howlett's immersion in the details of hydrological modeling and power marketing has not kept him from reflecting on the larger importance of Kerr Dam. "This can set us up to be an extremely successful and progressive tribe, like we've strived to be," he says.

This story was made possible with support from the Institutes for Journalism and Natural Resources.

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