TRANSMISSION:

Conservation concerns, landowner opposition stifle Mont. project

First in a two-part series.

GREAT FALLS, Mont. -- With arms outstretched, Larry Salois walks in slow circles on his mother's homesteaded property in blustery northern Montana.

His eyes are fixed on the ground as his feet follow a cobble of rocks that form a faint, yet undeniable, circle about 10 feet wide amid tall prairie grasses.

"This is a good one," said Salois, a retired UPS driver who grew up helping his family grow wheat, barley and cattle a couple of miles east of Cut Bank, which borders the Blackfeet Indian reservation. "You can see how the stones form a ring here ... and here ... and here."

Salois was likely tracing the remains of an ancient teepee ring built hundreds, if not thousands, of years ago by the Blackfeet to anchor their teepees against winds that have battered this landscape for millennia.

Salois, who is part Cree Indian and related by marriage to the Blackfeet, said the stones in the teepee rings also served a spiritual role of warding off evil spirits.

The rings -- some three dozen of them are on Salois' property -- have become a flashpoint in a battle waged by dozens of landowners to stop or reroute a $209 million power line that would ship Montana wind power to Canada and possibly the West Coast.

The 215-mile Montana-Alberta Tie Line, a project by Toronto-based Tonbridge Power Inc., is slated to run directly above the rings. An amended route has been proposed and conditionally approved, but Salois is yet to agree to an easement to cross his mother's property.

Salois, who wore a Montana Wilderness Association cap over a red bandana, said he supports wind power, and transmission, but not if it comes at the expense of cultural sites that offer insight into the past. He also is currently fighting to protect the nearby Rocky Mountain Front from oil and gas drilling.

"That's the irony of this thing," Salois said of his opposition to the project, which would pave the way for at least three new wind farms in Montana.

"Wind, solar and bio are part of the answer to the predicament we've gotten ourselves into," he said. "In my way of thinking, the production and consumption of hydrocarbon materials of any kind is at some point going to have to stop."

Condemnations

While not all landowners in northern Montana share his views, Salois and dozens of others now find themselves in court after rejecting proposals from the company to run poles and electric wire across their property.

The company, backed by a new state law passed in spring that allows private power line developers to condemn property, is asking state judges to grant easement rights across more than 30 miles of land so it can continue construction of the high-voltage line, which would run from Great Falls to Lethbridge, Alberta.

The company has already acquired easements from more than 130 landowners whose property covers about 85 percent of the project route.

In exchange, the company agreed to pay the full cost for any disturbed land and three years of any lost crop production, in addition to making annual pole payments of about $200 a pole, said Darryl James, the regulatory manager for MATL LLP, the Helena, Mont.-based Tonbridge subsidiary that is overseeing the power line project.

"The compensation package, as a whole, certainly in our minds is far more generous than the industry average," James said.

But landowners who oppose the project, many of them represented by Hertha Lund, a property rights attorney from Bozeman, Mont., are fighting the condemnations and have started a campaign to overturn the state's new eminent domain law.

They say the company has yet to offer a fair deal and has refused minor adjustments to the line to avoid scenic, agricultural and cultural impacts.

But James said the company has made numerous offers to change the route and that resistant landowners appear more concerned about compensation than aesthetic concerns.

Their opposition illustrates a major challenge transmission projects face across the West in finding suitable pathways for new lines that can connect remote renewable energy resources to burgeoning populations in the Southwest and West Coast.

A separate proposal known as the Mountain States Transmission Intertie, which would run from central Montana to southeastern Idaho, has been delayed more than a year due in part to a lawsuit by Jefferson County, Mont., that claims the state failed to adequately consult with local elected officials before selecting the line's preferred route.

The MSTI line by NorthWestern Energy has also spawned a handful of landowner groups in the states that argue the line should run on federal lands, not private lands, if it is shipping Montana power out of state.

The impasse over transmission threatens to derail several wind developments in Montana, which contains the second highest capacity for wind power in the continental United States, according to a recent Harvard University study (Land Letter, Dec. 23, 2010).

"The unseemly delays caused by the uncertainty in Montana's legal and regulatory environment have cost not only MATL and our shareholders an inordinate amount of time and money, but this sends a disheartening signal to other potential investors who would develop a variety of other projects in Montana," James said.

The "intentional roadblocks" put up by some have jeopardized the immediate investment of an additional $700 million in associated wind farm development, James said. Three wind farms representing more than 500 megawatts have agreed to supply the MATL line.

"All of this has a dampening effect on the development of the entire wind industry in Montana and has the immediate effect of postponing the creation of jobs and local injection of monies associated with these development projects," he said, "not to mention the substantial tax revenues in the affected counties."

Clarifying eminent domain

The battle over transmission in Montana took a new turn last December when a state district judge in Glacier County ruled that a private company has no legal right to take the property of a nonconsenting landowner.

The ruling, for the time being, has thwarted MATL's efforts to condemn the property of Shirley Salois, Larry's mother, even as construction continued both north and south of her land.

It also spurred state lawmakers to pass a Republican-backed law this spring giving developers including MATL the explicit authority to use eminent domain if they have obtained a site permit from the Montana Department of Environmental Quality.

The law enraged landowners and troubled some in the conservation community who warned it may unintentionally fast-track environmentally damaging energy projects.

Montana Gov. Brian Schweitzer (D) said that while the bill was far from perfect, he was forced to let it become law in order to jump-start long-stalled transmission developments in the state that could spur jobs, clean energy and new tax revenues.

Schweitzer said lawmakers did not give him an opportunity to offer amendments to the bill that could have allowed landowners to collect royalties from power produced or set a sunset date for the law to expire.

"They sent me the bill and said 'Take it or leave it.' I didn't want to leave it and I didn't exactly like taking it, so I let it become law without my signature," he said in an interview with Greenwire.

Schweitzer, a third-generation rancher, said he has transmission and pipelines running across his own property and understands the impacts such developments bring. "But the few cannot shut down the progress and commerce of the many," he said.

Within a month of the bill's passage, Montana's Supreme Court asked the Glacier County court to reconsider MATL's eminent domain case in light of the new law, a ruling seen as a victory by power line proponents.

Last month, citing the state law, MATL filed condemnation complaints against 33 additional property owners in three counties to secure about 20 miles of right of way. That brings the number of property owners facing condemnation along the project's 130 miles in Montana to about 35, James said.

"It has only been after countless attempts to negotiate with each and every one of these landowners that MATL had no choice but to file legal proceedings to keep the project moving forward," James said.

Each landowner had been contacted at least three times since 2008 to iron out an acceptable plan. They were also offered a resolution process overseen by a third-party mediator, but most refused, James said.

"The actions of a few landowners are affecting their friends, neighbors, fellow county residents and Montanans, as well as those who have chosen to invest their money in a state that has expressed a strong desire to develop wind resources," he said.

Fighting back

Landowners facing condemnation are challenging the eminent domain law itself in the state's 9th Judicial District Court (Land Letter, June 23).

The lawsuit filed in late May asks the court to rule that the law "is void," claiming it denies them the "right to due process" under the constitutions of the United States and Montana.

A hearing before district court Judge Nels Swandal is scheduled for Sept. 2. Swandal is expected to decide the case before the end of the year.

At the same time, a new group last month began a campaign to allow Montana voters to overturn the law in November 2012. The campaign, paid for by Real Montanans for Fair Land Use, must collect at least 24,000 signatures by the end of next month to get the referendum on the ballot.

The group's campaign coordinator, Butte resident Rachel Roberts, lobbied against the law for Concerned Citizens Montana, an organization that has garnered the support of actor and local rancher Bill Pullman.

"Property rights are a big thing here in Montana," said John Vincent, a Democrat who serves on the state's five-member Public Service Commission and is a member of the petition drive's steering committee.

Vincent said he fears the new law, which was strongly backed by MATL, could make it more difficult to develop wind resources in Montana because it will rile landowners who would otherwise support transmission and wind projects.

"[MATL is] broadcasting the idea that you need to use eminent domain to get transmission sited in Montana," he said. "That's time and money and gives the appearance of obstructionism. If you want to do transmission in Montana, you'd better get ready for a long, ugly legal battle."

Bruce Maurer, a wheat and barley farmer near Power, Mont., is among the landowners who are being asked to make space for the MATL line. He pointed to a shallow alkaline mud flat about 1,500 feet from his front door where the line would run diagonally across a portion of his 4,700-acre farm.

"They want to put a pole in that area," he said. "It's a really poor engineering decision. ... It'd be a hell of a job."

The farm, acquired by his great grandparents who emigrated from Germany before World War I, grows wheat used to bake high-gluten, high-protein bread, Maurer said.

Maurer said he reached an agreement with a MATL representatives in 2005 over where the line would go, but was surprised in 2009 when he received a letter in the mail indicating that line would come closer to his home.

He said he feels MATL has done little to accommodate his concerns.

"They're too good to deal with the common guy," Maurer said, referring to the company as "big-shot honchos."

Chris Stephens, a farmer who owns land near Maurer's, said the company in a June mediation session rejected their proposed payment package and easement language.

"They didn't even respond. They just said, 'No, you're unreasonable,'" Stephens said. "They filed the condemnation the next day."

But Stephens, at least, appears supportive of wind power. While he opposes the proposed line, Stephens has installed a wind measuring tower on his property to gauge the potential for a commercial scale wind farm. Farmers in the area receive upward of $3,500 annually for each wind turbine sited on their land, he said.

"That's kind of the irony," he said.

Like many landowners in Montana, Stephens and Maurer said it would make a big difference if the MATL line was designed to deliver power to Montanans instead of being shipped elsewhere.

"It would make a hell of a difference," Maurer said. "The local people wouldn't treat you this way."

Regulatory hurdles

But making late changes to the transmission route and compensation packages is easier said than done, according to MATL.

James, the regulatory manager, said the project's preferred route is the product of an exhaustive permitting process by Montana regulators that began in 2005 and included more than a dozen public meetings, hearings and opportunities to comment.

The final pathway was ultimately selected by the state and allows the company 500 feet of wiggle room for route adjustments.

Any change beyond that would require a lengthy amendment process by the state and the Department of Energy, which oversaw the issuance of $161 million in federal stimulus loans to support the project. Lawmakers in the state have since passed a bill to allow DEQ to approve much wider transmission corridors, but it won't apply to the MATL project, James said.

"If we do this for one person, what kind of vulnerability do we have for 20 other people to come in and say, 'I want a minor tweak,'" James said. "You almost undermine the entire integrity of the [environmental impact statement] process."

The company recently asked Montana regulators to approve three route amendments outside its approved corridor, including the one on Salois' property. Those amendments still need DOE approval.

James said he understands Maurer's frustration. MATL earlier had hired a land contractor that signed an option with Maurer that was not adopted in Montana DEQ's final route.

"He's probably the most unfortunate consequence of that type of coordination," James said. "It's part of Montana's broken process that results in mixed signals and false expectations on the part of landowners."

Similarly, the state disclosed in its environmental review before the project was approved in 2008 that the proposed route would cross the teepee rings on Salois' property, he said. That fact was apparently overlooked by Salois until MATL asked him to sign an easement, he said.

The state this month announced a new alignment shifting the line away from the rings onto cultivated land in a corridor wide enough to avoid a nearby injection well. The change also better avoids a mapped wetland, it said.

Salois said he is "guardedly optimistic" that the amendment will lead to an agreement. If so, it would render his condemnation case moot.

"Hopefully we might get some resolve on this thing," he said. "It took me two years to stop them, but I'm hoping that at least we've saved those teepee rings."

MATL estimates that continued delays over eminent domain have cost the company nearly $20 million and that share value has been harmed.

In June, the company announced it needs to raise an additional $25 million to finish the project, which is about 40 percent built. It attributed the added costs to the Salois case, contractor disputes, regulatory delays and material cost increases.