United States. Federal Power Commission

Between the years 1898 and 1930, the Montana Power Company, and its predecessors, constructed a series of seven developments on the Missouri River upstream from Fort Benton, Montana. These projects, which include dams, reservoirs, and powerhouses, are the Morony, Ryan, Rainbow, Black Eagle, Holter, Hauser, and Canyon Ferry hydroelectric projects. In addition, two other developments were constructed on the Madison River, the Madison and the Hebgen projects. In December 1937, the Federal Power Commission began an investigation to determine whether the maintenance and operation of these nine unlicensed hydroelectric developments in Montana constituted a violation of the Federal Power Act. The act, passed in 1935, required licensing from the Federal Power Commission for all developments located in streams over which the U.S. Congress had jurisdiction. As a result of its investigation, the Commission requested that the Montana Power Company apply for licenses for its Missouri and Madison rivers hydroelectric developments. When this was not done, the Commission ordered a public hearing (Docket No. IT-5840) to be held before an examiner at Helena beginning November 18, 1946. The fundamental issue involved throughout the hearing was the determination of the navigability of the Missouri River. If the river was a "navigable water" of the U.S., then it was " . . . illegal for any person, state, or municipality to construct or operate a dam or reservoir for the purpose of developing electric power across, along, or in . . ." the Missouri River without a license. The Commission's case was based upon the fact that the Missouri was indeed navigable above Fort Benton and in order to prove it, diaries, articles, journals, clippings, and logs from early expeditions and steamboat travels involving the transportation of persons and property were presented. The Montana Power Company countered the Commission's case from the premise that all nine of its developments were constructed, operated, and maintained before passage of the 1935 Federal Power Act. Also, the company contended that the Great Falls prevented the Missouri River from forming a continuous interstate highway, commercial travel having never gone above Fort Benton which was below the hydroelectric development farthest downstream (Morony). However, more important in the eyes of the company was the fact that if these developments had to be licensed by the Federal Power Commission, the U.S. would then have an option to make all Montana Power Company property, including transmission lines, federal property. Joining forces with the company were the governments of the Montana counties of Lewis and Clark, Gallatin, and Cascade. These counties feared loss of considerable tax revenue from Montana Power Company for the transmission lines, dams, and other property. Also, each county had constructed bridges across the Missouri and felt the expense of licensing these bridges would be prohibitive if the river was determined to be a navigable waterway of the U.S. The examiner's decision (Opinion No. 170) came on September 30, 1947, stating that all nine of the Missouri-Madison developments occupy, "without authority a 'navigable water' or public lands, or both, and since all effect the navigable capacity of the 'navigable water,' the Commission has authority under the Act to require that they be operated and maintained only if licensed." This decision was the start of a long legal battle between the Federal Power Commission and the Montana Power Company.