HELENA, Mont. (AP) A district judge in Helena will take up a case today that looks at whether utility companies should pay the state rent, for using the riverbeds on which their hydroelectric dams are located.

Attorney General Mike McGrath has argued that ground beneath riverbeds is state land, held in trust to benefit Montana school children. He says entities that occupy riverbeds should pay the state for it, just like ranchers who rent state school trust land for pasture.

PPL Montana, and Avista Corporation, have argued the dams have existed rent-free for many years, on the understanding that utilities had the right to build their dams and use the water to generate electricity.

The companies also argue the dams are governed by federal licenses, not the state.

A third utility, PacifiCorp based in Portland, Oregon, has agreed to pay the state $50,000 a year to rent the land occupied by its Bigfork Dam on the Swan River.

(Copyright 2007 by The Associated Press. All Rights Reserved.) APNP 10-22-07 0741CDT | save this article / add to your favorites list