Montana Bd. of Natural Resources and Conservation v. Montana Power Co.

• Decision Date: 31 March 1975
• Docket Number: No. 12889,12889
• Citation: 536 P.2d 758,166 Mont. 522
• Parties: MONTANA BOARD OF NATURAL RESOURCES AND CONSERVATION et al., Plaintiffs and Appellants, v. The MONTANA POWER COMPANT, a corporation, Defendant and Respondent.
• Court: Montana Supreme Court

Page 758

536 P.2d 758

166 Mont. 522

MONTANA BOARD OF NATURAL RESOURCES AND CONSERVATION et al., Plaintiffs and Appellants, v. The MONTANA POWER COMPANT, a corporation, Defendant and Respondent.

No. 12889.

Supreme Court of Montana.

Submitted Dec, 4, 1974.

Decided March 31, 1975.

Ted J. Doney, Donald D. MacIntyre & Allen B. Chronister, Helena, Donald D. MacIntyre (argued), Robert T. Cummins (argued), Helena, for plaintiffs and appellants.

Thomas N. Kelly (argued), Billings, William Coldiron and William John Carl, Butte, for defendant and respondent.

JOHN C. HARRISON, Justice.

This is an appeal by the Montana Board of Natural Resources and Conservation from a judgment of the district court, Lewis and Clark County. The presiding judge Honorable Peter G. Meloy held the Montana Power Company exempt from section 70-811(3), R.C.M.1947.

This matter was first before this Court in an original proceeding, Montana Board of Natural Resources v. The Montana Power Co., 31 St.Rep. 930.

The Board of Natural Resources and Conservation (hereinafter referred to as the Board) found that the Montana Power Company (hereinafter referred to as the Power Company) must obtain a certificate under the provisions of the Montana Uitility Siting Act of 1973, sections 70-801 through 70-823, R.C.M.1947, to construct a transmission line from Billings to Great Falls, Montana. The Board first went to the district court and obtained a temporary restraining order enjoining the Power Company from constructing the line. The trial court found the Power Company had commenced construction before January 1, 1973, and entered judgment for the Power Company declaring it exempt from the provisions of section 70-811(3), R.C.M.1947, and no certificate was required.

That ruling was appealed to this Court asking that the temporary restraining order be reinstated. After hearing, this Court denied that request. The Board now appeals from the judgment of the district court declaring the Power Company exempt from section 70-811(3) and seeks a declaration by this Court that a certificate of environmental compatibility and public need is required.

The sole issue on appeal is whether the Billings-Great Falls 230 KV utility facility was under construction on January 1, 1973.

The Power Company is engaged in the production and distribution of electrical energy in Montana. At a hearing beofre the trial court it was established by uncontradicted evidence that for much of the period of its existence it has relied entirely upon water power for the generation of its electricity and only in recent years has the Power Company turned to other forms of power generation. Because of the rapid increase in demand for electricity in its service area in recent years and the problems caused by low water and severe winter freezing that have arisen because of its dependence upon water power, the Power Company was faced with brown-out conditions unless improvements were made. For example: In the Billings service area there was a 69% increase in demand from 1969 to 1972; in the Great Falls service area a 43% increase; and in the Butte-Helena service area a 19% increase. It was obvious in the late 1960s that the demands of the Power Company's customers were straining the capacity of its existing transmission lines and that the future demands would be greater than the Company could handle on its existing lines.

To meet this increasing demand, the Power Company began building a 230 KV transmission line loop, which when finished would encircle Butte, Anaconda, Helena, Great Falls and Billings and towns serviced within that loop. In addition, the Power Company built a steam production plant in Billings and is in the process of completing two energy production plants in Colstrip, Montana, which are due to go into production in the years 1975 and 1976. One of the principal reasons for the construction of the loop is to be able to rapidly transfer energy to where it is needed and thus have a constant available source regardless of weather or other factors.

As a final part of the completion of the loop, the Power Company in 1968-69 constructed 18 steel towers (about three miles), running north from the Corette Generating Plant in Billings to the vicinity of Alkali Creek. Tower No. 18 was to serve as a junction to the line going north to Great Falls and the line going west to Butte-Anaconda. From tower No. 18 to Great Falls it is approximately 180 miles and since the completion of tower No. 18 in 1969 the Power Company has acquired some 117 miles of right-of-way and is involved in, or has completed, several condemnation actions for the remainder.

In addition, a number of administrative matters have occurred concerning the line. Cost estimates have been made for budgetary purposes; some of the wooden poles, known as 'H Structures', have been ordered and many have been delivered to specified sites; insulators have been ordered and delivered; an engineering firm, referred to as MAIN-STR was hired and has made an environmental impact study of the area between Great Falls and Billings and has made a report on a preferred route; and, contracts were let in early 1974 to the Montana Line Contractors Association for the sum of $1,600,000 to finish the line.

In 1973, the 43rd legislature passed what is known as the Montana Utility Siting Act, effective March 16, 1973, to be administered by the Board. Shortly after the passage of the Act officials of the Power Company met with the Board to discuss how the Act would affect a number of its projects and to also give the Board a long range construction plan of the Power Company. At this meeting, held March 16, 1973, the Power Company gave the Board a mamorandum which purported to specify the projects that it had under construction and those that it intended to apply for certificates for, under the new Act.

The Billings-Great Falls 230 KV line was not listed as under construction but was listed as a project for which a certificate would be applied for. On May 11, 1973, the Power Company applied for such a certificate and paid an application fee of $90,250 as an estimate on the total cost of $7,025,000. The cost to build the 18 towers, a sum of $300,000, was not included. As a result of the filing for the certificate the Board began its environmental studies, but as of the time of the filing of this cause the certificate had neither been granted nor denied.

Approximately one year after filing its application for a certificate the Power Company determined the Billings-Great Falls line certificate should not have been requested due to the fact that under the Siting Act that line was under construction prior to January 1, 1973.

The Board argues the Power Company is estopped, even though the project was under construction prior to January 1, 1973, by reason of having represented to the Board that the line was not under construction as of January 1, 1973, and therefore, having applied and paid the fee for a certificate, the Board in reliance upon that representation by the Power Company acted to its detriment. The Board further argues this Court should interpret sections 70-804 and 70-811(3), R.C.M.1947, to require a certificate for the Great Falls-Billings facility.

The two sections of the Siting Act involved provide in pertinent part:

'70-804, R.C.M.1947. No person shall commence to construct a utility facility in the state without first having obtained a certificate issued with respect to such facility by the board. * * *'

'70-811(3), R.C.M.1947. * * * A...