Price tag set for CSKT Kerr Project acquisition
Energy Keepers Incorporated CEO Brian Lipscomb addresses the press and Tribal Council last week to reveal the price of the Kerr Dam acquisition. The Confederated Salish and Kootenai Tribes are set to assume control and operation of Kerr Dam in 2015. (Sam Sandoval, photo)
POLSON — The American Arbitration Association’s (AAA) panel has made a final ruling regarding the estimated conveyance price that Energy Keepers, Incorporated (EKI) will pay on behalf of the Confederated Salish and Kootenai Tribes (CSKT) to PPL Montana in order for CSKT to acquire the Kerr Hydroelectric Project.
EKI is a federally chartered corporation that is wholly owned by the CSKT, created for the purpose (among other things) of serving as CSKT’s acquisition agent during the Kerr Project conveyance process.
In the Final Award, issued by a panel majority on March 3, the total price tag for the Tribe’s acquisition of the Kerr Project stands at $18,289,798.
“Today we enjoy historic success in our diligent effort to acquire the Kerr Project,” said Brian Lipscomb, CEO of EKI. “We had our day in court, and the deal we made in 1985 was honored in the binding decision made by the majority of the arbitration panel. This ruling sets the Tribes on a sure path to acquiring Kerr in 2015. It has taken a lot of work, many sacrifices, and a serious determination to get to this historic day.”
During extensive hearings held in January, the Tribes and PPL Montana each presented their respective cases to the three-person arbitration panel.
At the heart of the hearings was a dispute over the price that PPL Montana was de- manding the Tribes pay for acquiring the Kerr Project. PPL Montana asserted that the acquisition cost should be $49.4 million, and the Tribes asserting a much lower price of $14.7 million leaving an amount in dispute of $34.7 million.
After hearing and evaluating the cases brought forth by both the Tribes and PPL Mon- tana, the arbitration panel ruled in favor of the Tribes by establishing an estimated conveyance price consisting of the following components:
A. Communications Equipment - $15,250: Both CSKT and PPL Montana agree this item should be included in the conveyance price.
B. Tangible Plant - $16,562,540: Although, CSKT asserts that the method PPL Montana used to calculate depreciation on the facilities resulted in a higher amount, with a difference between the two at approximately $1.9 million, the panel agreed with PPL Montana’s cost for this item.
C. Flooding Rights - $0: For this PPL Montana tried to include $987,300 in the price tag, as part of their legal defense costs in a long-standing lawsuit over flooding rights at Flathead Lake. The panel disagreed with PPL Montana, telling the com- pany that these costs will not be included in the Tribes acquisition price for the Kerr Project.
D. Severance Compensation - $0: Proposed by PPL Montana at $102,700 for employee severance costs, the panel determined that this amount should have never been included, and is now rejected.
E. Environmental Mitigation Costs - $1,712,008: For this component, the arbitration panel included items associated with the Kerr Wildlife program and Kerr licensing costs.
TOTAL ESTIMATED CONVEYANCE PRICE: $18,289,798
Head of Tribal Health and Human Services Kevin Howlett remarks that the Kerr Dam acquisition has been a long process, one that's been ongoing since he sat on the tribal Council. (Sam Sandoval, photo)
Now the Tribes will provide formal notice to the Federal Energy Regulatory Commission (FERC) regarding their intent to acquire the Kerr Project, at the earliest possible date, on September 5, 2015.
With less than 19 months until the acquisition date, EKI continues to prepare for the management and operation of the hydroelectric facility.
“This day represents an unwavering and long-standing commitment by the Salish, Pend d’Oreille and Kootenai Tribes to restore Tribal stewardship over resources affected by the Kerr Project,” said CSKT Tribal Chairman Ronald Trahan. “This is a big day in our Tribal history that is especially meaningful to our communities because it represents self-sufficiency, resilience and vision by the Tribes. Today we take a big step forward in acquiring the Kerr Project.”
For more information about EKI, please visit the website at www.EnergyKeepersInc.com For more complete details about the arbitration process, and the full text of the Final Award, please: click here.