No 14672 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

19 79 

- 

THE MONTANA POWER COMPANY, A Montana Corporation, 

Plaintiff and Appellant, 

-vs - 

LEO CREMER, JR., et al. , 

Defendants and Respondents. 

Appeal from: District Court of the Sixth Judicial District, 

Honorable Jack D. Shanstrom 

Counsel of Record: 

For Appellant: 

Jardine, Stephenson, Blewett and Weaver, Great Falls, 

Montana 

Lon Holden argued, Great Falls, Montana 

For Respondent: 

Graybill, Ostrem, Warner and Crotty, Great Falls, 

Montana 

Gregory Warner argued, Great Falls, Montana 

William RMorse, Absarokee, Montana 

For Amicus Curiae: 

Donald McIntyre argued, Helena, Montana 

Submitted: May 4, 1979 

Decided: JUN 2 2 1979 

Filed: JUN 2: 1379 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This is an appeal by the Montana Power Company (MPC) 

from a judgment of the District Court of the Sixth Judicial 

District, sitting in Sweet Grass County, dismissing an 

eminent domain proceeding for lack of jurisdiction. 

MPC brought a condemnation action to acquire a permanent easement across a strip of respondents' land for the 

construction of a six-inch gas transmission pipeline which 

in total would extend 38.3 miles from MPC's pipelines near 

Greycliff, Montana, to its Big Coulee field located southeast of Ryegate, Montana. 

At the "necessity" hearing held on October 18, 1978, 

respondents objected to the taking of testimony on any need 

for the proposed pipeline alleging that the pipeline is a 

"facility" under the Montana Major Facility Siting Act and 

therefore the Department of Natural Resources and Conservation must first determine environmental compatibility and 

public need for the pipeline. Testimony was taken from John 

Robertson, MPC's gas and oil department manager and John Van 

Gelder, MPC's gas production and transmission manager. 

Robertson testified that the proposed pipeline would 

connect MPC's total system of gas production, distribution 

and transportation facilities with its Big Coulee gas fields 

and that the general purpose of the connection was to replenish the depleted Big Coulee reserves for Lewistown, 

Montana, consumption. He stated that the estimated cost for 

construction of the pipeline was $1,693,000, and that it 

would be capable of transporting approximately 8,500 million 

cubic feet of gas per day. 
On December 28, 1978, the condemnation suit was dismissed for lack of jurisdiction. The court found as a 

matter of law that MPC's proposed pipeline was a "facility" 

under the Siting Act since it led "from or to" a "facility" 

as defined by the Siting Act, section 75-20-104 (7) (c) MCA, 

formerly section 70-803(3)(c), R.C.M. 1947. The court also 

found the pipeline to be an "addition to" MPC1s present 

natural gas system. The court concluded that MPC was barred 

from conducting eminent domain proceedings because it had 

not obtained a certificate from the Montana Board of Natural 

Resources and Conservation. 

MPC appeals from the District Court judgment dismissing 

the action for lack of jurisdiction and presents a question 

of statutory interpretation for review by this Court, viz.: 

Whether the MPC1s proposed gas transmission pipeline is 

a "facility" as defined by the Montana Major Facility Siting 

Act at section 75-20-104 (7) MCA, formerly section 70-803 (3), 

R.C.M. 1947? 

The District Court found as a matter of law that MPC1s 

pipeline is a facility under the Act because it led to or 

from a facility as defined by the Siting Act. The court 

designates MPC1s "gas gathering", "transmission and distribution pipeline system" as a "facility" to which the proposed line would connect and therefore the line becomes 

a facility or associated facility. We disagree. 

Both parties to this litigation have agreed that the 

intent of the legislature can be determined from the plain 

meaning of the words used in the statutes and it follows 

that the plain meaning rule controls. This leaves no necessity to examine legislative history. However, the parties 

have nonetheless been very generous in furnishing the Court 
with claimed evidence of legislative intention. NO one 

really got too close to Laws of Montana 1979, Chapter 527, 

which amended section 75-20-104 MCA, the statute under 

consideration here, and specifically excludes natural gas 

pipelines from the Siting Act. This bill was signed by the 

Governor and became effective immediately on April 10, 1979. 

This would seem to limit considerably the necessity for a 

long and involved discussion of the principles of statutory 

construction in this Opinion. 

Additionally, the Montana Department of Natural Resources and Conservation appeared by brief and argued on 

behalf of the statutory construction urged by appellant. 

The Department has not considered gas transmission lines 

connecting other gas transmission lines leading to or from 

gas wells or fields as a facility under the Act. This Court 

has previously held that in statutory construction problems 

great deference must be shown to the interpretation given to 

the statute by the agency or officers charged with its 

administration. Department of Revenue v. Puget Sound Power 

and Light Co. (1978), Mont. , 587 P.2d 1282, 1286, 

35 St.Rep. 1368, 1372. This has more than 

usual import here as the dismissal below was based on the 

gas line being a "facility." 

The development of the case law in Montana with respect 

to the rules of statutory construction may be summarized in 

the following analysis: (1) Is the interpretation consistent with the statute as a whole? (2) Does the interpretation reflect the intent of the legislature considering the 

plain language of the statute? (3) Is the interpretation 

reasonable so as to avoid absurd results? and (4) Has an 

agency charged with the administration of the statute placed 
a construction on the statute? Dunphy v. Anaconda Co., 

(19681, 151 Mont. 76, 80, 438 P.2d 660, 662; Home Building & 

Loan Association v. Fulton (1962), 141 Mont. 113, 115, 375 

P.2d 312, 313; Teamster Local #45 v. Cascade County School 

Dist. #1 (1973), 162 Mont. 277, 280, 511 P.2d 339, 341; 

State ex rel. Cashmore v. Anderson (1972), 160 Mont. 175, 

184, 500 P.2d 921, 926-27; Puget Sound Power & Light Co., 

supra. 

For the pipeline in question to fall within the parameters of the Siting Act, it must be a pipeline designed for 

or capable of transporting gas from or to a major facility. 

See section 75-20-104(7) (c) MCA, formerly section 70- 

803 (3) (c) , R.C.M. 1947, which states: 

"Each pipeline and associated facilities designed for or capable of transporting gas, 

water, or liquid hydrocarbon products from or 

to a facility located within or without this 

state of the size indicated in subsection 

(7) (a) of this section." 

The facilities indicated in the referenced subsection include facilities capable of: (1) generating 50 megawatts of 

electricity; (2) producing 25 million cubic feet of gas per 

day; (3) producing 25,000 barrels of liquid hydrocarbon 

products per day; (4) enriching uranium minerals; (5) utilizing, refining or converting 500,000 tons of coal per 

year. For the gas pipeline to be a facility under the 

Siting Act, the pipeline must come from or go to one of 

these types of facilities. 

Section 75-20-102 MCA, formerly section 70-802, R.C.M. 

1947, establishes that the Siting Act is aimed at the "location, construction and operation of power and energy 

conversion facilities." Likewise, the facilities described 

in section 75-20-104 (7) (a) MCA all clearly contemplate the 

siting and construction of artificial (man-made) facilities 

to aid in the conversion of a raw material to a commercial 

energy product. 
Section 75-20-102 (7) (a) (i) MCA concerns the generation 

of electricity. This section contemplates that the energy 

product, electricity, does not occur commercially in the 

natural state. Clearly, the Siting Act contemplates that 

artificial facilities will be constructed to convert a 

natural resource, such as coal or water, to an energy 

product such as electricity. 

In a similar vein section 75-20-104(7)(a)(iii) recognizes that the production of liquid hydrocarbon products 

requires the involvement of a siting authority. The extraction or gathering of the liquid hydrocarbon product is not 

the determinative criterion. The determinative criterion 

is the production of an energy product through a conversion 

process. Under section 75-20-104(7)(a) MCA, oil and gas 

refineries are exempted from the Siting Act. Consequently, 

the Siting Act is concerned only with those facilities that 

are needed to convert a raw material, such as coal, to a 

liquid hydrocarbon product. Facilities that are needed to 

separate naturally occurring products which may be found 

together, such as crude oil and associated natural gas, and 

facilities which perform the mechanical action of extracting 

liquid hydrocarbon products from the earth are not within 

the scope of this definition. 

Section 75-20-104 (7) (a) (iv) MCA concerns the enriching 

of uranium minerals. It involves the conversion of the 

isotopic ratio of uranium to another isotopic ratio. 

Simply stated, the process involves the conversion of 

uranium in its natural state to an energy product form which 

is not commercially available in the natural state. As in 

the cases of the other facilities described above, the 

common thread linking the defined facilities together is the 
production by artificial methods of an energy product 

through a conversion process. 

Likewise, this common thread is found in section 715-20- 

104 (7) (a) (v) which concerns the utilizing, refining or 

converting of coal. As in the above-described situations, 

a raw material, coal, is converted by artificial methods to 

an energy product in the form of heat, electricity, gas, 

hydrocarbon products or energy in any form for ultimate 

public use. It is the conversion of the raw material to a 

commercial product that is the subject of the Siting Act. 

Therefore, if section 75-20-104 (7) (a) (ii) is to be considered compatible with the remaining subsections of section 

75-20-104(7) (a), as it must be in considering the statute as 

a whole, the gas producing facility must be limited to those 

types of facilities that convert naturally occurring material to an energy product. Gas wells and fields, as described in the District Court's order dismissing for lack of 

jurisdiction, are not the type of facilities that convert 

naturally occurring gas to an energy product. Rather, the 

facilities are gathering and transportation of a naturally 

occurring energy product. Such facilities are not subject 

to the requirements of the Siting Act. 

As noted above, the Siting Act is clearly aimed at the 

"location, construction and operation of power and energy 

conversion facilities." The key phrase is "conversion 

facilities." Nowhere in the Siting Act is there express 

authorization for the State to site the mining or gathering 

activities of a potential applicant, except in those cases 

where the actual mining activity involves the conversion of 

the energy form. The extraction of natural gas and the 

ultimate transportation of the gas from its natural state to 
the ultimate consumer does not involve a conversion process 

subject to the Siting Act. Although the gas may be sweetened, 

cleaned, pressurized or otherwise processed to make it 

suitable for burning, it is not converted to some other form 

by processing through any "power or energy conversion facility." 

The judgment and order of the District Court is reversed and vacated, and this matter is remanded to the trial 

court with instructions to proceed expeditiously with the 

eminent domain proceedings. 

We concur: 

7h-&A$ f 

Chief Justice 

Justices 

Mr. Justice John C. Sheehy, deeming himself disqualified, 

did not participate. 
No. 14672 

MONTANA POWER COMPANY 

VS . 

LEO CREMER 

----------------- 

DISSENT 

ELERKOFSUPREMECOURI. 

&TATE OF MONTANA 
Mr. Justice Daniel J. Shea dissents: 

I dissent because this natural gas pipeline plainly 

and properly comes within the definition of a "facility" 

under the Montana Major Facility Siting Act. 

Section 70-803 (3) (c) , R.C.M. 1947, now section 75-20- 

104(7) (c) MCA provides: 

"'Facility' means: 

" (c) each pipeline and associated facilities 

designed for, or capable of, transporting gas, 

water, or liquid hydrocarbon products from or 

to a facility located within or without this 

state of the size indicated in subsection (3) 

(a) of this section; . . ." 

Section 70-803(3) (a) (ii) , R.C.M. 1947, now section 75-20- 

104 (7) (a) (ii) MCA provides: 

"'Facility' means: 

"(a) each plant, unit, or other facility and 

associated facilities, except for oil and gas 

refineries, 

"(ii) designed for, or capable of, producing 

twenty-five million (25,000,000) cubic feet 

of gas per day or more, or any addition thereto 

having an estimated cost in excess of two hundred 

fifty thousand dollars ($250,000), or . . ." 

The question, then, is whether the pipeline to or from which 

the pipeline would lead is designed for or capable of "producing" 

25 million cubic feet of gas per day or more. The Greycliff 

connection is tied in with MPC's total gas production system 

which is capable of producing approximately 290,000 million cubic 

feet of gas per day. Therefore, the proposed pipeline leads 

from or to a facility capable of producing in excess of 25 

million cubic feet of gas per day. 

Preliminarily, the majority opinion noted that section 

70-20-104 MCA was recently amended so as to exclude natural 

gas pipelines from the Siting Act. This fact, according to 
the opinion, "would seem to limit considerably the necessity 

for . . . statutory construction." In this case, we are 

concerned with the Act as it existed before the 1979 amendment. 

If anything, the amendment indicates that the legislature 

sought to change existing law (Tuttle v. Morrison-Knudsen 

Co. (1978), Mont. , 580 P.2d 1379, 1382, 35 St.Rep. 

864, 869; Montana Milk Control Bd. v. Community Creamery Co. 

(1961), 139 Mont. 523, 526, 366 P.2d 151, 152), and the 

change is effective only after the date of the amendment. 

Section 43-510, R.C.M. 1947, now section 1-2-203 MCA. 

The opinion regards the fact that the Department has 

not considered gas lines connecting other gas lines to be 

"facilities" as deserving of "great deference". Dept. of 

Rev. v. Puget Sound Power and Light Co., supra. The cited 

case stated, but did not apply, this notion of statutory 

construction. However, Doe v. Colburg (1976), 171 Mont. 97, 

100, 555 P.2d 753, 754 did, stating: 

"This Court has on several occasions considered 

the interpretative regulations by administrative 

agencies charged with the duty of administering 

and enforcing a legislative act, for an understanding of the provisions that must be carried 

out. (Cites omitted. ) 

"While such administrative interpretations are 

not binding on the courts, they are entitled 

to respectful consideration." (Emphasis added.) 

Here, no interpretive rulings on the Department's treatment 

of pipeline-to-pipeline facilities exist. Surely, the 

Department's inaction cannot be viewed as the legal equivalent 

to the promulgation of an interpretive ruling. 

The opinion then declares that Montana's rules of 

statutory construction may be summarized in a four-part 

analysis. This analysis neglects to mention the fundamental 

rule that legislative intent must first be determined from 

the plain meaning of the words used. Section 93-401-15, 

R.C.M. 1947, now section 1-2-101 MCA; Dunphy, supra; Teamsters 
Local #45, supra; Cashmore, supra. Instead, the opinion 

reverses the inquiry and asks, "does the interpretation 

reflect the intent of the legislature considering the plain 

language of the statute?" In short, does our opinion find 

support in the statute? 

Turning to the legislative policy statement in section 

70-802, R.C.M. 1947, now section 75-20-102 MCA, the opinion 

seizes upon the "key phrasew--"conversion facilitiesw--as a 

statement of the Act's limited coverage. Even a cursory 

reading of the provision demonstrates that the legislative 

concern was not restricted to energy conversion facilities, but 

was generally aimed at furthering this State's policy of 

maintaining and improving "a clean and healthful environment 

. . . to protect the environmental life support system from 

degradation and prevent unreasonable depletion and degradation 

of natural resources." Section 70-802, supra. It is not 

inconsistent with this policy to impose siting requirements 

regulating the location, safety, construction and maintenance 

of gas pipelines. Indeed, the need for such legislation has 

prompted enactment of similar laws both by the United States 

Congress (49 U.S.C. 51671, et seq.) and by our sister states 

(See e.g., Wash.Rev.Code 580.50.010, et seq., and 0r.Rev.Stat. 

5757.039.) 

To bolster its decision the Court attempts to trace a 

"common thread linking the defined facilities together" and 

determines that the common denominator is the conversion process 

necessary to produce the other enumerated energy forms. It 

appears the Court went too far in its search for commonality. 

For example, in discussing the definition of liquid hydrocarbon 

producing facilities, section 75-20-104 (7) (a) (iii) , it is stated 

that only such facilities that convert a raw material, such as 
coal, to a liquid hydrocarbon product are included. This 

totally unsolicited statement is not supported by the 

legislative history of section 75-20-104 (7) (a) (iii) . The 

1975 Legislature specifically deleted any reference to 

gasification or liquefaction facilities for the obvious 

purpose of broadening the scope of the definition. 

If there is a "common thread" linking the facilities 

subject to the siting requirements of the Act, it is simply 

the potential environmental impact posed by each of the 

enumerated facilities. 

The District Court ruled correctly that the proposed 

gas pipeline is a "facility" and therefore subject to the 

requirements of the Major Facility Siting Act. Under the 

Act, the utility cannot conduct eminent domain proceedings 

until it has obtained a certificate of environmental compatibility 

and public need from the Department of Natural Resources and 

Conservation. Therefore, I would affirm the District Court 

order dismissing eminent domain prosedings.