Flyovers provide a birds-eye view of the Seliš Ksanka Qĺispe Dam in Montana. (Photo Courtesy Energy Keepers, Inc.)
Energy Keepers Inc., is selling hydroelectric power to Washington state utility Puget Sound Energy.
The corporation owned by the Confederated Salish and Kootenai Tribes entered into a 15-year agreement with Puget Sound Energy in February, and began sending hydroelectric power to the utility in March. The new contract permits Puget Sound Energy to draw 40 megawatts of power from the plant that includes the Seliš Ksanka Qĺispe Dam (formerly known as Kerr Dam).
The contract is partly motivated by a statewide mandate set by the state’s Clean Energy Transformation Act (CETA) that Washington utilities stop billing customers for costs associated with coal power come 2025. So the power supplied by Energy Keepers, Inc., will help offset Puget Sound Energy’s coal-fired electricity currently coming from the Colstrip Power Plant.
By 2045, CETA commits Washington to an electricity supply that’s completely free of greenhouse gas emissions to achieve the state’s long-term climate goals. Meanwhile, Puget Sound Energy is in the process of releasing its coal-fired energy sources, and plans to sell its 25% share of Colstrip Unit to NorthWestern Energy, pending regulatory approval, the Associated Press reported.
Energy Keepers is reaping the benefits of CETA and Washington State’s transition, while also acquiring more large Montana clients who previously purchased electricity from Colstrip.
Native Business originally reported on Energy Keepers’ 2015 purchase of the major hydroelectric power plant for $18 million in our January 2019 “Energy” print edition. We specifically honed in on Confederated Salish and Kootenai Tribal leadership’s very intentional, multi-decade approach to ownership of the hydroelectric dam. We share that story again below.
Decades of Planning Went Into Tribal Acquisition of Hydroelectric Plant
By Mark Fogarty
A lot of careful planning went into the takeover of the Kerr Dam by the Confederated Salish and Kootenai Tribes of Montana. In fact, it took 40 years for the Salish and Kootenai Tribes to realize their vision of owning a hydroelectric plant as part of a slow reacquisition of ancestral lands.
According to Brian Lipscomb, president and chief executive of Tribal affiliate Energy Keepers, Inc., the Tribes, based on the Flathead Reservation, made their first move to acquire Kerr Dam, now renamed Seliš Ksanka Qĺispe Dam after the three Tribes on the reservation (the Salish, Kootenai, and Upper Pend d’Oreille), in 1976.
“There’s quite a long story to this that paints a picture of who the Tribal people are and what their visions are for restoration of our reservation,” he said.
The development of the damsite by non-Tribal parties began during an assimilation period and the Tribe lost control of the site, he said.
“This is part of a longer story of reacquiring the reservation,” Lipscomb said, that began with the Indian Reorganization Act of 1934. That strategy has taken Tribal ownership from 20 percent of the reservation to nearly 70 percent, he said.
The Tribes gave up their original land bases in the 1855 Hells Gate Treaty and were relocated to the present reservation. The Tribes have maintained a vigorous economic development pace over the years, with such companies as S&K Technologies, S&K Electronics, a Tribal college, an internal mortgage loan department, Eagle Bank, and the KwaTakNuk Casino and Resort on the shores of Flathead Lake.
In 1976, the Tribes put in a competing licensing application with Montana Power Company for a 50 year lease on the dam and the associated hydroelectric plant that was coming up in 1980. MPC and its affiliates had controlled the plant for the previous 50 years, since 1930.
After a nine-year battle, Lipscomb said, the Tribe and MPC in 1985 became co-licensees for the second 50 year lease. Under the terms of the deal, MPC retained control for the first 30 years, or until 2015, at which time the Tribes would acquire the license solely for the next 20 years, with the power company relinquishing ownership. That transfer of ownership occurred on Sept. 5, 2015 at a price of $18.3 million. The acquisition was the first of a major hydropower plant by a Tribe.
The next relicensing will take place in 2035, Lipscomb said, and Energy Keepers will start planning for that about ten years in advance. “The Tribes are right now, through us, making significant investments to make sure it is in good working order for several decades into the future.”
The plant is a major resource for the Tribes, whose reservation is located in northwestern Montana to the north of Missoula. It has a 208 megawatt capacity and generates one million megawatt hours of electricity annually.
As an example of how much power that is, “It’s enough to provide electricity for Missoula for a year,” he said. “About 120,000 homes.”
About 10 percent of that output goes to the federally owned but Tribally operated utility, Mission Valley Power, with the rest being sold on the wholesale market to customers all across Montana.
Some of those are very big customers, like the city of Great Falls, large industrials like mining companies and cement plants, and even a Bitcoin technology development facility.
But Energy Keepers isn’t just a producer of energy. It also acts as a broker, buying and selling electricity on the open market as a commodity.
“We’ve had some pretty good growth in that area,” said Lipscomb.
And some financial success. In the three years Energy Keepers has controlled the dam and the plant, it has returned about $65 million in payments to the Tribes, he said. While he would not reveal annual revenues, he said in general a megawatt hour brings in about $30 to $35, meaning that at one million megawatt hours the math isn’t hard to do.
Lipscomb, who is of both Kootenai and Salish ancestry, has been involved with the project off and on since 1992 when he was hired by the Tribes as a fish and wildlife manager. He remembered being handed a file on the dam project in his first week of employment. A major pre-acquisition project he was involved in around 2003 was to buy about 30,000 acres of “mitigation” habitat for $30 million.
He was named Tribal director of energy in 2010 and again was immediately handed a file on the dam project.
“We started at zero,” he remembered, with himself and three board members.
Then about 30 people were hired to get the company off the ground and take over the facility.
The project kicked into high gear with the establishment of Energy Keepers in 2012. Just three years later, it acquired the dam and site. Currently, the company has 27 employees, half of them Tribal members.
“It keeps me hopping,” he said.
The dam is located five miles southwest of Polson, MT, a town on the shores of Flathead Lake. It dams the Flathead River, which emerges from the lake, and is as high as Niagara Falls.
Energy Keepers has some operating restraints on the lake and the river it uses to maintain the water supply and environment. “We take a long term look at balancing the resource so we’ve built some pretty advanced models inside of our company to help manage and balance that water,” said Lipscomb.
A November operations report by Mariah Friedlander, power analyst, concluded “It is business as normal here at EKI.”
Among his observations were “Forecasted water supply volumes are below average for the early part of winter. Current inflows are around 4,300 cubic feet per second, close to the physical minimum given upstream constraints. Current outflows are holding steady at 6,100 cubic feet per second. Lake elevations are on a slow and steady decline to reach 2,888 feet for the end of December.”
In an EKI report made just prior to the 2015 acquisition, the firm described the project as “a 381 foot main arch dam with gravity and earthen dam extensions, three water intakes, each leading to three 23.3 feet diameter penstocks and a concrete surface powerhouse with three generating units interconnected to the NorthWestern Energy Transmission System.”
It said the project was built in three phases: 1934-39 (dam and Unit 1), 1949 (Unit 2), and 1954 (Unit 3) Unit 3 was upgraded in 2006.
Looking forward, Lipscomb sees some “build or buy” opportunities for Energy Keepers, including from the ongoing transition to renewable sources.
Though Energy Keepers derives most of its revenue from brokering, Lipscomb still keeps a close eye on precipitation in the area and noted with satisfaction that it had just snowed prior to his interview with Native Business Magazine. “The amount of water we receive on an annual basis determines our output. Everything north of us we consider inventory,” he said.