PPL banks on solicitor general

The U.S. Supreme Court is taking a closer look at a recent appeal from PPL Montana, calling on Solicitor General Neal Katyal to investigate a spring ruling by the Montana Supreme Court that slammed the energy company with more than $40 million in back rent for hydroelectric dams on three Montana rivers. PPL Montana now hopes the investigation will serve as an overture to a hearing before the nation's highest court.

"We view it as a positive development from our position," says PPL Montana spokesman David Hoffman. "I think it illustrates that the court has determined that there's a significant federal issue involved here."

PPL Montana, a subsidiary of the PPL Corporation, currently owns and operates 11 hydroelectric dams in the state, which generate a total of 602 megawatts of power for Montana customers. But on March 30, the Montana Supreme Court declared state ownership of all Clark Fork, Madison and Missouri river streambeds and demanded PPL Montana pay rent for dams located on those waterways between 2000 and 2007.

PPL Montana has since gained widespread support for a U.S. Supreme Court appeal from farmers, ranchers, irrigation districts and other hydroelectric operators who see the demands for rent as a potential precedent. The Montana Supreme Court's blanket declaration of all three rivers as navigable challenges ownership of miles of tributaries, says the Montana Farm Bureau Association, and threatens to stick others with similar rent payments in the future. That could include federal agencies, hence the solicitor general's involvement.

"I think a lot of people see potential impacts that may be beyond the attorney general's control," Hoffman says. "Once these determinations are affirmed by a court, schools and others who would benefit from the money have to look at other users and say, 'Gosh, there's a whole lot of other people out there using these state lands that aren't paying.'"

Hoffman says Katyal is expected to begin the investigation as soon as next week—if he hasn't already. But Montana Attorney General Steve Bullock has dampened PPL Montana's excitement over the solicitor general's involvement, publicly stating that such action is routine in the eyes of the U.S. Supreme Court. There's no indication yet how long it will take Katyal to complete his investigation.

"About the best I've heard is months," Hoffman says.

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