CEO building for future with Kerr Dam operation

Brian Lipscomb is glad to be home again.

Lipscomb, a 1983 graduate of St. Ignatius, is the CEO of Energy Keepers, the wholly owned corporation of the Confederated Salish and Kootenai Tribes. His experience includes engineering for the U.S. Forest Service, Fish and Wildlife and Land Management for the CSKT, and Executive Management for a nonprofit fish and wildlife organization in Portland, Ore. In 2010, as the tribes were working to purchase Kerr Dam, Lipscomb was hired to lead the CSKT’s energy development efforts. Acquiring Kerr Dam has the been the priority in these efforts  “They said, ‘Brian, we need to get the dam purchased,’” he said as the Tribal Council handed him the first estimated conveyance price for Kerr Dam on his first day back.

The tribes first negotiated the purchase of Kerr Dam in 1985. This September, the tribes assume ownership, becoming the first tribe in the nation to own a hydroelectric facility.

The first license expired on Kerr Dam in 1976, and the Tribes and Montana Power Company filed competing license applications at that time. “The Tribes thought if they’re going to license it, it should be licensed to the Tribes, not a corporation,” Lipscomb said. In 1985, the Tribes, MPC, the US Department of the Interior, the Montana Consumer Council, and the Mission, Jocko, and Flathead Irrigation Districts all reached an agreement ultimately approved by the Federal Energy Regulatory Commission for the tribes to buy the dam.

At that time, the tribes were advised that they should increase their rental payment of the dam that they received from the operators. In 1980, the tribes received an annual $2.4 million rental payment from the dam’s operators. On the advice of economists, the tribes were told they should be charging $25 million — the value of the electricity generated from the south half of Flathead Lake, which the tribes own.

That deal set the purchase of the dam last year as confirmed by an arbitration panel at $18.3 million — far below the $53.4 million initial estimate by PPL Montana. But the reason for the lower price, Lipscomb said, was because 35 years ago the tribes worked out a deal with the sellers that said the tribes would pay book value for the dam at the time of purchase, in exchange for a lower annual rental payment of $9.5 million.

The negotiations to purchase Kerr Dam took nine years “and it was very intense,” Lipscomb said.

Now, the tribes are looking to the future.

The tribes are now looking to what Kerr Dam can do as an economic engine for the Flathead Indian Reservation.

“How do the tribes rebuild what was lost?” Lipscomb said. “We’re going to have to re-invest in ourselves restoring what has been lost over the past 100 years.”

Although there has been some public questioning the tribes’ approach to electricity pricing and other factors involving the operations of Kerr Dam, Lipscomb said, “We’re not going to do anything different.”

The name, however, will change.

The tribes will change the name from Kerr Dam to a tribal name when they assume ownership in September, according to Lipscomb.

Generating electricity from Kerr Dam will help generate money for local businesses, as well as for the tribes. Lipscomb sees the tribal operation as a model for the future, where the tribes operate diversified businesses on the Flathead Indian Reservation. “Twenty years from now, I hope we’ll have five or 10 more successful businesses,” Lipscomb said.

The tribes will have to operate the dam in accordance with its federal license.

The Federal Energy Regulatory Commission license for Kerr Dam states that Energy Keepers will have to follow the policy from 1964, which requires that the level of Flathead Lake will have a minimum pool of 2883 feet above sea level, and will have a full pool of 2,893 by June 15 of each year. The tribes will have to abide by the FERC license, just as Northwestern Energy does — with some exceptions.

Since Energy Keepers Inc. is not a public utility the Federal Energy Regulatory Commission recently ruled that EKI would not be required to provide financial reports normally used as a basis for rates in the retail market. EKI will operate Kerr Dam as an independent power producer, selling its power into the wholesale market where rates are determined by the market place rather than the public service commission. 

The money from Kerr Dam will go back to the Tribal Government to help finance efforts such as additional economic development and cultural initiatives for the tribes, such as the language immersion schools in Arlee and in Elmo. “That requires resources,” Lipscomb said. “Being able to live in today’s economies requires resources.”

Lipscomb sees it as a positive for the entire community that the money from Kerr Dam will remain in the Mission Valley and the that the project will create over 20 jobs. Under former owner PPL, “Where did that money go?” Lipscomb said. “It went to Allentown, Pennsylvania.”

There may be a negative economic impact, however, to some public entities. About $1 million will be removed from tax collections in Lake County and Flathead County. According to Lipscomb, about $250,000 goes to Polson schools; $350,000 goes to Lake County; $300,000 goes to the state, and about $35,000 to Flathead County.

The council of the Confederated Salish and Kootenai Tribes are considering offsetting the financial loss, but they have not made a decision. “It’s up in the air at the moment,” he said.

“But are we going to be good neighbors? You bet the Tribes have done many projects in the past that benefit the entire community and I’m confident they will continue to do so in the future.”

The Tribes adhered to traditional ways in naming the corporation and establishing the logo. The Salish and Kootenai phrase for Energy Keepers is “those who care for the energy.” Energy Keepers’ logo shows a fox jumping over the dam. In the Tribes Creation stories, the fox is one who restores life back to coyote. Coyote is always “going out and doing good things, but is always getting killed in the process,” Lipscomb said. “The fox is who brings coyote back to life.” 

Lipscomb, the former tribal lands director from 2003 to 2005, said he’s proud to be able, as a member of Confederated Salish and Kootenai tribes, to provide leadership moving forward. “I see a lot of positive things,” Lipscomb said.  “I’m excited and honored that I’m able to come back and help the Tribes in this important effort.”

The dam is a key component in the history of the tribes in that it was imposed, he said, upon the Tribes, along with other failed assimilation strategies of the U.S. Government including allotment, homesteading and construction of the irrigation project. Similar to other reservations these policies failed the Tribal people which lead to new U.S. policy, Self Governance, Lipscomb said. This strategy was realized in the Indian Self Governance Act, enacted in 1934 and allowing the CSKT to become the first recognized Tribal government in the United States. 

When the tribal government was formed in 1934, it allowed the tribes to negotiate directly with the federal government.

 “We said ‘we’re in,” Lipscomb said, “and we started to strategize about what to do about Kerr Dam and restoring all of our lost resources.”