Judge Rules State Can Charge Dam Owners for Occupation of State-Owned Riverbeds

Just as we were going to publication with this issue, state District Judge Thomas Honzel issued a summary judgment in favor of the state's position that utilities that own dams can be charged compensation for their use of state-owned riverbeds.

MCVEF reported on the case in this publication when it was first filed in 2003. At that time, the lawsuit was filed by parents of school-age children who contended the utilities must compensate the state for their occupation of state-owned lands, just like all other users. The state joined the lawsuit as a plaintiff.

Attorney General Mike McGrath, who is a member of the Land Board, called Honzel's ruling "great news" and said the next step is for the state to open discussions with the utilities about "what they're going to pay for occupying our property" and then negotiate leases based on "reasonable rents that the state charges for occupations of state lands."

The utilities had contended that the state was pre-empted from regulating hydroelectric facilities by the Federal Power Act, but in his decision Judge Honzel wrote: "The court cannot accept this position. Although the state cannot regulate a hydroelectric project, nothing prevents the state from obtaining rental compensation."

This is a precedent-setting case, so stay tuned for the latest updates.