Avista, Montana reach deal

Avista reached a multimillion-dollar court settlement with Montana over the state’s effort to collect rent payments for land underneath hydroelectric dams.

The deal announced Tuesday would require Avista to make annual payments of $4 million from 2007 through 2016. After that the rent payment would be negotiated.

Avista’s 350,000 ratepayers in Eastern Washington and North Idaho, who buy electricity generated by two large dams on the Clark Fork River, would be asked to cover the cost through a rate increase of less than 1 percent, said Avista spokesman Hugh Imhof. Any increase, however, would require approval by state regulators.

Montana Attorney General Mike McGrath called the settlement a “very fair” agreement.

“Both sides worked very hard to get to this point,” he said. The money will be used to fund public schools in Montana.

Imhof said Avista faced a claim in excess of $200 million and decided to settle rather than follow through with the damages trial in Helena.

Avista’s hydroelectric projects on Montana’s Clark Fork River include the Noxon Rapids dam and reservoir, and the Cabinet Gorge Dam, which actually sits in North Idaho near the state line but stores miles of river water in Montana.

PPL Montana is still fighting the state over damages, arguing the dams are governed by the federal licenses it hold for the projects and are not subject to state claims. It also says it was unfairly targeted and has warned other river users that Montana could come after them next.

PPL owns more dams and could be hit with a much larger bill.

Avista’s settlement could be reduced if PPL collects a better deal through ongoing litigation.

The state earlier reached an agreement with PacifiCorp, which will pay about $50,000 a year for a relatively small dam on the Swan River near Bigfork.