PPL Montana will reportedly ask the U.S. Supreme Court to review an order from the Montana Supreme Court that requires it to pay “rent” for use of the riverbeds on which the company’s hydroelectric dams are built.

The state high court said in a March ruling that the state owned the riverbeds and that PPL Montana owed the state nearly $41 million in back rent for their use. PPL has posted a bond for the rent with the court until the case is resolved.

PPL spokesman David Hoffman told Bloomberg Businessweek that the company has until Aug. 12 to ask the Supreme Court to intervene and that it will seek to show the court that the issue is of federal significance.

According to The Great Falls Tribune, the company believes that among substantial questions at stake are whether the state can charge rent for use of riverbeds to a company with a federal license to operate dams on the river. 

PPL claims that per the decision, other river users could also ultimately be forced to pay rent, but the state has made clear that entities that use riverbeds for irrigation are not under the same rental obligation as power companies, Bloomberg reported.

The state has said rivers belong to the people of Montana, “not out-of-state corporations,” the Tribune noted.

The Montana Supreme Court’s March ruling was reached on appeal of a lower court decision. In 2004, former Attorney General and current Chief Justice Mike McGrath joined a citizen’s lawsuit arguing that utilities should have to pay rent for the land under dams. In June 2008, District Judge Thomas Honzel ruled in favor of the plaintiffs and ordered PPL to pay rent dating back to 2000.

PPL Montana owns and operates 11 dams in Montana, including seven on the Missouri River. Five of the dams are within 15 miles of Great Falls.

Sources: Bloomberg Businessweek, The Great Falls Tribune, Montana Supreme Court