No. 81-354 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

STATE EX REL. , MONTANA WILDERNESS 

ASSOCIATION, et al., 

Petitioner and Appellant, 

BOARD OF NATURAL RESOURCES AND 

CONSERVATION OF THE STATE OF MONTANA, et al., 

Respondents and Respondents. 

Appeal from: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, The 

Honorable J. M. Salansky, Judge presiding. 

Counsel of Record: 

For Appellant: 

Goetz, Madden & Dunn, Bozeman, Montana 

William L. Madden argued, Bozeman, Montana 

For Respondents: 

James F. Walsh, Pamela I<. Merrell, Butte, Montana 

Donald MacIntyre argued, Dept. of Natural Resources, 

Helena, Montana 

Richard J. Andriolo argued, Bozeman, Montana 

Corette, Smith, Pohlman & Ailen, Butte, Montana 

R. D. Corette, Jr., argued, Butte, Montana 

Amicus Curiae : 

Schulz, Davis & Warren, Dillon, Montana 

Submitted: December 2, 1981 

Decided: July 91 1982 

Filed: L7ji,jL 9 - 1982 

Clerk 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of the 

Court. 

The Board of Natural Resources & Conservation (BNRC) 

granted the Montana Power Company (MPC) permission to construct a 

161 KV electrical transmission line from Bozeman to Ennis to 

Dillon with a 161 KV spur from Ennis to Big Sky. Montana 

Wilderness Association, Inc. (MWA) and Environmental Information 

Center, Inc. (EIC) appealed BNRC1s decision to the District Court 

of Lewis & Clark County. The ~istrict Court affirmed. MWA and 

EIC now appeal the ~istrict Court decision to thiscourt. 

On June 4, 1974, MPC filed with the Board an application 

for a Certificate of Environmental Compatibility and Public Need, 

pursuant to the provisions of the Utility Siting Act of 1973, 

seeking authorization for construction and operation of 155 miles 

of 161 KV electric transmission line extending from Clyde Park to 

a substation in the Upper Yellowstone valley, then to Big Sky, and 

then to a substation outside of Dillon. Additionally, approximately 17 miles of 69 KV electric transmission- was proposed 

from the substation in the Upper Yellowstone Valley to Gardiner. 

The Utility Siting Act was amended by the legislature 

effective ~pril 21, 1975, and became known as the "Montana Major 

Facility Siting Act". On June 30, 1975, MPC filed an amended 

application requesting, in lieu of the lines previously subsubmitted, approval of 198 miles of transmission lines all 

of which were to be treated as one project or facility, consisting of the following: 

a) Clyde Park to Emigrant--161 KV line; 

b) Emigrant to Gardiner--69 KV line; 

c) Clyde Park to Bozeman--161 KV line; 

d) Bozeman to Ennis--161 KV line; and 

e) illo on to Ennis to Big Sky--161 KV line. 

Pursuant to the mandates of the Montana Environmental 

Policy Act (MEPA) and the Siting Act (Section 75-20-216, MCA) . 

the Department of Natural Resources and conservation (Department) 

studied and evaluated the proposed facility and its effects. The 

Department published a draft environmental impact statement in 

. . 

I... _ 

- ,.. : -.a: ; w..... - 
January of 1976 and, after reviewing comments from MPC, various 

1 

government agencies and interested members of the public, the 

Department published its final EIS in April of 1976. The 

Department ' s recornmenda t ion was to approve the request except 

that construction of the 161 KV transmission line to Big Sky 

was to be routed from Bozeman to Big Sky through the Gallatin 8 2 

Canyon corridor, rather than from Ennis to Big Sky through Jack 

Creek/Cedar Creek Corridor. 

On April 10, the first prehearing conference was held with 

Joe Sabol, a Bozeman attorney and Chairman of the Board, as 

hearings officer. On April 20, 1976, the Board commenced formal 

"certification proceedings" on the application, deeming the 

matter a contested case within the Montana Administrative 

Procedure Act (IYAPA) . Pretrial discovery and conferences 

followed and on May 7, 1976, MWA gave notice of its intent to 

become a party to the proceedings. 

On May 12, the date of the second preconference hearing 

(also presided over by Sabol) , MWA member Rick Applegate filed 

an affidavit of disqualification, requesting that Sabol disqualify himself from participating as a hearings officer and 

voting member of the Board. The reasons given for disqualification included charges that Sabol had previously publicly criticized the MWA (implicitly referring to an article which appeared 

on February 15, 1976, in the Bozeman newspaper) and that Sabol, 

being a paid legal representative of Ski Yellowstone, Inc. (a 

proposed resort whose future energy demands were likely to be an 

issue in the proceeding, according to the af fidavit) could not 

render an impartial judgment. Sabol voluntarily withdrew as 

hearings officer on September 1, 1976, but refused to relinquish 

his voting position on the Board and the Board voted unanimously 

to deny the request that he be disqualified. 

On September 23 and 24, public hearings were held before 

the Board where the pref iled written testimony of witnesses was 
I admitted, oral examrnation taken and exhibits supporting and 

opposing MPC'S application introduced. According to the depos ition of Donald HacIntyre (counsel for DNRC) and Applegate, Sabol 

spoke to MacIntyre in the lobby during one of the recesses and, 

according to Applegate, told MacIntyre not to examine MWA's witnesses because Madden (appellants' attorney) was building a 

record for appeal. 

After the September hearings, the parties each filed proposed Eindings of fact and conclusions of law with appropriate 

exceptions there to - --- = filed by the opposing parties. 

Sabol's term on the Board terminated on December 31, 1976, and on 

April 21, 1977, the parties presented their final oral arguments 

to the Board. On October 28, 1977, the Board rendered its 

decision and granted the certificate to MPC, authorizing 

construction along the corridor preferred by MPC. Particularly, 

the Board found the Ennis-Jack Creek-Big Sky corridor to be preferable to the Ennis-Cedar Creek-Big Sky and Gallatin Canyon 

corridors, rejecting the Department's recommendation of using the 

Gallatin Canyon route. 

On December 1, 1977, MWA and EIC filed a petition with 

the District Court of the First Judicial District, seeking review 

of that part of the Board's decision approving construction of 

the line from Bozeman to Ennis to Dillon, with a 161 KV spur from 

Ennis to Big Sky through the Jack Creek corridor. The segment of 

the line from Bozeman eastward has already been constructed and 

is not here in issue. 

After various motions and the filing of extensive briefs 

by the parties, the trial court heard final arguments and deemed 

the case submitted on December 13, 1979. On July 14, 1981, the - 

District Court entered an order disposing of all issues raised by 

MWA and EIC in favor of MPC. This appeal followed. 

On August 7, 1981, MPC obtained from the Board an order 

approving centerline location for construction of the line. 
Appellants, by motion dated August 10, 1981, applied to this 

Court for a stay of construction activities pending appeal and 

for an expedited briefing schedule. We denied the stay but 

granted an expedited briefing schedule. 

The issues on appeal can be stated in this manner: 

I. Are the environmental impact str'atements inadequate as 

a matter of law? 

2. Are the Board's findings, conclusions and Certificate 

of Environmental Compatabili ty and Public Need in conformity with 

statutory requirem'ents and supported by the evidence? 

3. Did Sabol's involvement deny MWA and EIC a hearing 

before a fair and impartial tribunal in violation of due process 

requirements? 

At the outset, we must determine the proper standard of 

review of this appeal. 

Our standard of review is governed by the Montana 

Administrative Procedure Act. Section 2-4-704, MCA, provides in 

part: 

" (2) The court may not substitute its judgment 

for that of the agency as to the weight of the 

evidence on questions of fact. The court may 

aff irm the decision of the agency or remand the 

case for further proceedings. The court may 

reverse or nodify the decision if substantial 

rights of the appellant have been prejudiced 

because the administrative findings, 

inferences, conclusions or decisions are : 

"(a) in violation of constitutional or statutory 

provisions ; 

"(b) in excess of the statutory authority of the 

agency; 

" (c) made upon unlawful procedure; 

"(d) affected by other error of law; 

"(e) clearly erroneous in view of the reliable, 

probative and substantial evidence on the whole 

record ; 

"(f) arbitrary or capricious or characterized by 

abuse of discretion or clearly unwarranted exercise of discretion; or 

"(g) because findings of fact, upon issues 

essential to the decision, were not made 

although requested." 

-4- 
Ir 

Appellants urge that the scope of review based on the 

above statute is whether the draft and final environmental impact 

statements are " in violation of the constitutional or statutory 

provisionsn or "affected by other error of lawn, citing section 

and 

2-4-704(2) (a)Rd), MCA, supra. Appellants also cite Trout 

Unlimited v. Morton (CCA 9, 1974), 509 F.2d 1276, for the asser- 1 - 

tion that appellate courts are not bound by the "clearly 

erroneous" standard that governs findings of an agency or trial 

court. In Trout Unlimited, supra, the federal appeals court said 

the following regarding the correct standard : 

"The proper standard by which to review the 

adequacy of the EIS has been the subject of 

some confusion in this court. The nature of the 

con£ usion has been whether the ~dministrative 

Procedure Act, 5 U.S.C. S 706(2)(A), the 

' arbitrary, capricious, an [dl abuse of 

discretion' standard, or S 706(2) (D) , the 

'without observance of procedure required by 

law' standard or some third sta'ndard not precisely conforming to either s 706(2)(A) or s 

706(2) (D) is the proper standard. See 

Environmental Defense Fund v. Armstrong, 487 

F.2d 814 (9th Cir. 1973); Life of the Land v. 

Brinegar, 485 F.2d 460 (9th Cir. 1973); 

Jicarilla Apache Tribe of Indians v. Morton, 471 

F.2d 1275 (9th Cir. 1973). This confusion was 

eliminated from our law by Lathan v. Brinegar, 

506 F.2d 677 (9th Cir. 1974). We held that the 

S 706(2)(D) standard was the proper one because 

NEPA is essentially a: 

" 'procedural statute. Its purpose is to assure 

that, by following the procedures that it 

prescribes, agencies will be fully aware of the 

impact of their decisions when they make them. 

The procedures required by NEPA, 42 U.S.C.A. S 

4332(2) (C), are designed to secure the 

accomplishment of the vital purpose of NEPA. 

That result can be achieved only if the 

prescribed procedures are faithfully followed ; 

grudging - pro forma compliance will not do. We 

think that the courts will better perform their 

necessarily limited role in enforcing NEPA if 

they apply S 706(2) (D) in reviewing environmental impact statements for compliance with NEPA . . . ' Lathan v. Bririegar, supra, at 692-." 509 F. 2d 

at 1282. 

We have previously discussed our scope of review of an 

agency decision under the Montana Administrative Procedure Act at 

some length in Northern Plains Resource Council v. Board of 

Natural Resources and Conservation (1979), - 181Mont. - 500, 594 
P.2d 297, 36 St-Rep. 666. We emphasized how court review of 

agency decisions is limited : 

"This Court recently set forth three basic principles underlying section 82-4216 which a 

District Court must consider in determining what 

the scope of review of an administrative decision 

should be: (I) that limited judicial review of 

administrative decisions strengthens the administrative process by encouraging the full presentation of evidence at the initialadministrative hearing ; ( 2) judicial economy 

requires court recognition of the expertise of. 

administrative agencies in the field of their 

responsibility; and (3) limited judicial review 

is necessary to determine that a fair procedure 

was used, that questions of law were properly 

decided, and that the decision of the administrative body was supported by substantial - 

evidence. Vita-Rich Dairy, - Inc. v. Department 

- of Business Regulation (1976), 170 Mont. 341, 

553 P.2d 980." 181 Mont at - 509 , 594 P.2d at 

303, 36 St.Rep. at 67. 

We also quoted from the case of Vermont Yankee Nuclear Power 

Corp. v. National Resources Defense Council, Inc. (1978), 435 

U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460: 

" ' . . . the role of a court in reviewing the 

sufficiency of an agency's consideration of 

environmental factors is a limited one, limited 

both by the time at which the decision was made 

and by- the statute mandating review. 

"'"Neither the statute nor its leaislative 

history contemplates that a court-should substi- -- 

tute its iudqment for that of the aaencv as to --- a ---- 2 * -- 

the environmental consequences -- of its actions." 

[Citation omitted.] ' Vermont I Yankee, 435 U.S. at 

555, 98 S.Ct. at 1217. (Emphasls supplied.)" 

-- 181 Mont. at 511 , 594 P.2d at 304, 36 St.Rep. 

at 672. 

We are not persuaded by appellants that we should move 

from our position taken in Northern Plains. It is an accurate 

statement of what kind of court review should be given to agency 

decisions. Furthermore, we note the mandates of the Montana 

review statute cited above (section 2-4-704 (2) , MCA) which contains a clear indication that the legislature intended that a 

court reverse or modify the lower decision where the agency 

decision is clearly erroneous, arbitrary, or capricious, 

resulting in the appellants' rights being substantially 

prejudiced . 
With regard to the first issue on appeal, appellants claim 

the draft and final EIS's are inadequate as a matter of law on 

several grounds: the failure to consider the need for and alternatives to the proposed facility in the Upper Madison/Lower Ruby 

valleys and at Big Sky; the failure to consider the "no action" 

alternative; the failure to undertake an adequate cost/benef i t ' : 

analysis; and the contention that deficient Environmental Impact 

Statements cannot be rendered adequate by reference to the record 

outside the documents. We will consider each in turn. 

Appellants first charge that the failure to consider the 

need for, and alternatives to, the facility in the Upper 

Madison/Lower Ruby valleys renders the EIS Is legally inadequate. 

Chapter Three of the draft EIS discusses the need of the proposed 

facility and outlines the needs for the areas of Big Sky, 

Bozeman, Yellowstone National Park and, the Yellowstone Valley. 

Chapter Four addresses alternative transmission methods generally 

and specific transmission a1 ternatives to the four above areas. 

.In neither chapter is there a discussion of the Upper 

Madison/Lower Ruby valleys. Appellants refer to several points 

in the record where this deficiency was noted by various 

individuals. 

The Department, in its briefs to the District Court and to 

this Court,acknowledges that the EIS's contain no adequate consideration of alternatives to a 161 KV line serving the Upper 

Madison/Lower Ruby valleys. The Department justifies this 

omission by stating that MPC failed to comply with the Siting Act 

and the rules adopted pursuant thereto in identifying in MPC's 

application the need for a facility to serve the demand in the 

Upper Madison/Lower Ruby valleys. 

It is true there is no separate section of the draft EIS 

devoted to consideration of a1 ternatives to the proposed electrical transmission line serving the Upper ~adison/Lower Ruby valley 

area. However, Chapter Three of the draft EIS contains sta- 

-7- 

.. 
tistics and data on the needs of the Upper Madison/Lower Ruby 

valley including regulation statistics, existing transmission 

sprinkling 

line data, a map showing a significant growth in/irrigation perwhich would 

mit £ilings/consti tute. additional electrical demand, a showing 

that Vigilante ~1ectricCooperati~e which uses MPC transmission 

lines in the area projects almost doubling the electrical load 

a 1. 

between 1972 and 1978, and/table showing substantial increases in 

peak electrical loads at substations in the area. 

Chapter Four of the draft EIS discusses alternatives to 

MPC's proposed 161 kilovolt transmission line as a whole 

including expansion of MPC's Madison hydroelectric plants, 

upgrading and additions to existing transmission facilities, and 

underground transmission lines. Chapter Six includes an analysis 

of environmental impacts on the Upper Ma4 ison/Lower Rcby valley. 

We note what the federal courts have said with regard to 

environmental impact statements under the ~ational Environmental 

Policy Act. In Trout Unlimited v. Morton, supra, the Ninth 

Circuit Court of Appeals stated: 

"That is, in our opinion an EIS is in 

compliance with NEPA when its form, content, and 

preparation substantially ( 1) provide decisionmakers with an environmental disclosure sufficiently detailed to aid in the substantive 

decision whether to proceed with the project in 

the light of its environmental consequences, and 

(2) make available to the public, inf~rmation of 

the proposed project s environmental impact and 

encourage public participation in the development of that information." 509 F.2d at 1283. 

In Life of the Land v. Brinegar (9th Cir. 1973), 485 F.2d 460, 

472, the court addressed what kind of consideration of alternatives is mandated by NEPA: 

"NEPA1s 'alternatives1 discussion is subject to 

a construction of reasonableness. N.R. D.C. , Inc. v. Morton, supra, 458 F.2d at 834. 

Certainly, the statute should not be employed as 

a crutch Eor chronic fault£ inding. Accordingly, 

there is no need for an EIS to consider an 

alternative whose effect cannot be reasonably 

ascertained, and whose implementation is deemed 

remote and speculative. Id. at 834. Rather, 

the EIS need only set form those alternatives 
s 'sufficient to permit a reasoned choice.' - Id. at 

836." 

Xhile it would have been preferable if the environmental 

impact statements in this case had separately considered the need 

for the facility in the Upper Madison/Lower Ruby valleys and 

alternatives thereto, the basic information to enable the Board 

to reach an informed decision was before the Board. The EIS's 

' - 

substantially complied with the mandates of MEPA and provided the 

Board "with an environmental disclosure sufficiently detailed to 

aid in the substantive decision whether to proceed with the 

project," Trout Unlimited, supra. We find no grounds for reversal or modification of the Board's decision in our limited review 

under section 2-4-704, MCA, discussed above. 

Appellants' next claim is that the EIS's fail to adequately address the need for, and alternatives to, the proposed 

facility at Big Sky contending that there was no investigation of 

the basis of MPC1s projected load which would justify additional 

electrical transmission service. Appellants reason that analysis 

of conservation alternatives is required by both the Siting Act 

and NEPA, citing section 75-20-503(1) (a) and (f) ,MCA, and two 

cases, Environmental Defense Fund v. Corps of Engineers (5th Cir. 

1974) 492 F.2d 1123 and Libby Rod and Gun Club v. Poteat (D.C. 

Mont. 1978), 457 F.Supp 1177, aff'd in part and revld in part 

(9th Cir. 1979) 594 F.2d 742. Sections 75-20-503 (l)(a) and 

( f) , MCA, provide as follows : 

"Environmental factors evaluated. In evaluating 

long-range plans, conducting 5-year site reviews, and evaluating applications for certificates, the board and department shall give 

consideration to the following list of environmental factors, where applicable, and may by 

rule add to the categories of this section: 

" ( 1) energy needs : 

a (a) growth in demand and projections of need; 

"(f) conservation activities which could reduce 

the need for more energy; 
We have reviewed the nature of the project in Corps of Engineers, 

supra, as outlined in both the Fifth Circuit Court opinion and 

the District Court opinion (348 F.Supp. 916) and fail to see how 

the case either supports or weakens appellants' position. Corps 

of Engineers involved challenges to the Tennessee-Tombigbee 

Waterway, a navigation project, extending from Demopolis, 

Alabama, to the Tennessee River. Nowhere do we find discussion 

regarding electrical transmissions facilities and projected 

loads. Although the court rejected the Corps' defense that the 

development of alternatives need only take place where a project 

involves detrimental environmental impacts, we do not find that 

statement dispositive here. 

Poteat, supra, involved the proposed construction of addtional electrical generating units ("LAURD") at Libby Dam. In 

the District Court opinion, Judge Murray addressed the Corps' 

projected load forecasts and the conservation alternative: 

"The peak-power deficit forecasts relied upon by 

the Corps reflect the years 1974-75, yet LAURD 

was not projected for completion until 1982-83. 

The current forecasts for the early 19801s, as 

projected by Bonneville Power Administration 

(BPA) and the Pacific Northwest Utilities Coordinating Council show a surplus of peaking power 

and a shortage of base-load power, even without 

LAURD . 

"The reference to the alternative of conservation 

is much too conclusory. The Corps discusses the 

importance of conservation, but dismisses it as 

a viable alternative to LAURD, saying 'there is 

not at present sufficient evidence to warrant 

delaying the on-line dates of Libby Additional 

Units.' Recent studies by the BPA and the General 

Accounting Office indicate there is evidence to 

conclude that conservation in the Pacific Northwest will have a considerable impact. This information should be explored and analyzed in 

greater depth by the Corps in preparing a new 

EIS." 457 F.Supp. at 1188-89. 

The Department justifies its failure to conduct an independent investigation of MPC's load projections by stating 

that, in 1975, the Department determined that its legal mandate 

did not extend to denying increased electrical energy to 

Montana consumers on the basis of the ultimate use of the elecelectrical 

tricity, or to setting a maximum amount of / energy that existing 
electric consumers may consume. The Department concedes, 

however, that it has, subsequent to 1975, refined its procedures 

such that the concerns raised by appellants would be addressed. 

Additionally, applicants are now required, by -Administrative Rules 

ef Montana, . section 36.7.304(l)(b)(ii) and (b)(B) to provide 

to the Department the assumptions underlying load growth projections and how conservation measures may eliminate the. need for 

the proposed facility : 

"36.7.304 CONTENT OF APPLICATIONS FOR ELECTRIC 

TRANSMISSION LINESAND --- GAS OR LIQUID 

TRANSlYISSION r LINES An a~nlication for a facility defined In subsections 75-20-104 (10) (b) and 

75-20-104 (10) (c) of the Act which is an 

electric transmission line or gas or liquid 

transmission line shall contain the following: 

" ( b) Applications for electric transmission 

lines not based solely on transient stability 

considerations shall include the following : 

" ( ii) 10-year historical and 10-year projected 

load growth data at each point of distribution 

in the area needing additional facilities. 

These data shall be provided in tabular and 

not be limited to, assumptions about: populaEnTrowth: chanqes in electrical -- use per household: -industrial. -corn~rcial. and aaricbltural - a 

-- use of electrical energy and power; economic 

conditions affecting industrial - and commercial 

activity; conservation; and renewable alternative energy use. The effect upon demand of 

chanqes in the averaqe price and rate structure 

for electric energy ;hail be assessed. 

"(B) An explanation shall be given of the 

effects of the applicant's energy conservation 

or promotion programs, if any, on past and present energy consumption rate and on future 

energy growth rates. ' - The applicant shall assess 

- the potential for conservation and a reduction in -- - romotional activities for reducing or elimina- 

---- :inq the need for 7 

the proposed f acllEy. The 

application shall lnclude a discussion of the 

consistency of the proposed facility with state, 

regional, and national energy and conservation 

policies and programs;" (~mphasis added. ) 

The alternatives, in addition to conservation, that 
appellants contend were not sufficiently treated by the EIS's 

include on-site diesel generating facilities, waste heat sources, 

wind power, solar power and the use of more insulation. Although the Department might be well advised to look behind any 

load growth projections to determine their validity and 

legitimacy because an applicant's projections may very well be 

self-serving to a certain degree (to justify the proposed 

project), failure to do so is not fatal in this case, as MPC's 

load projections did not form the basis of the Board's decision. 

We further note that, in the final EIS, the Department 

specifically states that MPC's load projections did not control 

its decision and discusses the discrepancy between the projections and actual need: 

"The - Department -- is not basing - its decision 

regarding ---- the need for an additional --- line to Big 

7.- 

Sky on the accuracy -- of the applicant's -- load projectlons --- for Big Sky. A comparison of Table 2, 

which contains the historical peak load data for 

Big Sky, with Big Sky projections shown in Table 

3-7 of the Draft EIS (page 23) demonstrates that 

growth is not occurring as projected. Table 2 

data indicate that the peak load for winter 

1975-1976 will likely be about 9048 KW, the same 

as the 1974-1975 winter peak. The projected 

values from Table 3-7 of the Draft EIS were 

10,950 KW for winter 1974-1975 and 12,455 KW for 

winter 1975-1976. With respect to comparisons 

between the actual Big Sky peak loads and the 

applicant's projections, the applicant has 

stated: 

" 'The construction schedule of Big Sky must be 

considered when analyzing load projections . The 

estimates prepared by Mr. Hildreth (of MPC) were 

based on information supplied by Big Sky which 

showed construction of over 700 condominium 

units and over 50 residences by the 1975-1976 

season. The Draft Impact Statement, Clyde 

Park-Dillon, on Page 21, indicates that 37 homes 

have been built to date and 564 condominiums 

built to date. (MPC March 15, 1976).' 

"The - precise timing of development -- at Big Sky - and 

- the final peak -- loadto which ---- it will grow are 

not certainties. However. - the maior consideration - at present -- is that additional 

transmission capacity -- to Big Sky - is already 

needed." ( ~mphasis added. ) 

In the final EIS in the instant case, we note the 

Departnent did address the need for additional power at Big Sky: 
"With respect to Big Sky, Department studies 

indicate that Big Sky peak demand has in the 

past reached the capacity of the existing 69 KV 

line. Table 3-1 on page 13 of the Draft EIS 

Lists the capacity of the Big Sky-Bozeman line 

as 9 !4W. Table 2 contains the historical Big Sky 

peak demand data supplied by the applicant. The 

Big Sky load at the Jack Rabbit substation, 

which is the total Big Sky load (MPC March 15, 

1976), was 9048 KW in December 1974, December 

1975, and January 1976. Because - the capacity of 

the existinq --- line has been reached, and because 

growthectrical demand - will continue -- at Big 

4! 

Skv - the~epartment must recognize --- the need for 

addrtional transmission capacity -- to Big Sky." 

( Emphasis added. ) 

The final EIS also reflects that other alternatives were 

examined : 

"The --- need for additional transmission capacity 

----- to Big Sky, which the Department in this case 

acknowledges, does not necessarLlyindicate a -7 

--- needfornew-transmission lines. Other alternatives exist: addition of voltage compensation 

equipxent, upgrading the existing line by 

increasing conductor size while retaininq the 

existing Goltage level, and rebuilding the 

existing line at a higher voltage level. 

Neither of the first two of these alternatives 

would provide sufficient capacity to meet the 

peak projected long-term demand at Big Sky, nor 

would a combination of the two. Their implementation would therefore mean unnecessary additional expense to all Montana Power Company 

electrical consumers. Either upgrading the 

existing line to 161 KV or building a new 161 KV 

line would result in less energy loss during 

transmission (see page 59 of the Draft EIS) , and 

provide capacity beyond the projected maximum 

peak power demand of 32 MW at Big Sky. 

Construction of a new 161 KV transmission line ----- 

--- is the most appropriate alternative, however, - to 

----- meet the need for the additional transmission 

capacity ( see Section I .C. 3. ) ." (Emphasis 

added. ) 

For the foregoing reasons we hold that the Environmental 

not 

Impact Statements in this case are/grossly insufficient as a 

matter of law in their treatment of the need for and alternatives 

to the proposed transmission line. The primary function of the 

EIS is to provide the decision-maker with environmental reports 

sufficiently detailed to allow a knowledgeable judgment and to 

allow public feedback in the development of that information. 

We cannot say that the Board's decision was arbitary, capricious 

or clearly erroneous in view of the EIS1s and documents that it 
had before it. 

Appellants next attack the EIS's on the grounds that they 

failed to address or discuss the alternative of a second 69 KV 

line going through the Gallatin Canyon in addition to the 

existing one. Appellants contend that this a1 ternative came into 

being when it developed during the hearings that the additional . 15 megawatts projected by MPC was to serve only peak demands at 

peak ti~nes of the year. Hearings of Eicer ~ndriolo suggested the 

possibility of two 69 KV lines to the Board in the September 16, 

1977, hearing. 

In the draft EIS, we find there is consideration of higher 

kilovolt lines being routed from the Bozeman-Hot Springs substation through the Gallatin Canyon to Big Sky. The Department 

found, howe*rer, that sole reliance on one substation would present reliability disadvantages (in case of an outage at that 

substation) which would not be present in a transmission line 

from Dillon to Ennis to Big Sky. Two 69 RV lines from Bozeman to 

Big Sky would suffer the same infirmities as a higher kilovolt 

line along the same route. 

The Dillon area receives its power from three different 

sources and, in an emergency, Big Sky could be served by the 

Madison hydro plant near Ennis. In case of an outage at any one 

substation, electricity from the other areas could be drawn upon 

to prevent a total pwer failure. The fact that the EIS's did 

not specifically consider the possibility of a second 69 KV line 

through alla at in Canyon does not render them insufficient as a 

matter of law. Again, it is not required that an agency perform 

an exhaustive study of every possible alternative: 

"What is required is information sufficient to 

permit a reasoned choice of alternatives so far 

as environmental aspects are concerned ." NRDC 

v. Morton (1972 D.C.Cir.), 458 F.2d 827, 836. 

Appellants further contend that the Department should have 

addressed the "no actiona alternative in considering MPCVs pro- 
\ 

posed a1 ternative, 

It is clear that agencies must consider the "no action" 

alternative, see Poteat, supra, and Life of the Land v, Brineqar, 

supra. However, this claim of appellants is similar to that 

attacking the Departmentq s purported acceptance of MPC's load 

projections and our response thereto is relevant here. It is clear .. . 

that the Departxient has correctly reversed its earlier psition 

in that it now considers ways that the need for a proposed 

facility can be eliminated, ARM, section 36.7.304(1) (b)(ii) & (b)(B), 

supra. Here the Department implicitly determined that the "no action" alternative would not be satisfactory, 

is 

as in the final EIS this/stated. 

"The - current -- need for additional electricity at 

- Big Sky -- has been established, and according to 

the Sky Master Plan, the corporation desires 

increased development, and, hence, increased 

electrical consumption ." (Emphasis added. ) 

Appellants next challenge the EIS's on the ground that 

they do not contain an adequate cost/benefit analysis, viz., the 

Department should have considered the relative costs and benefits 

of the proposed facility in comparison with available alternatives. Appellants quote House Joint Resolution No. 73 which provides in pertinent part. 

"That all agencies of State government are 

hereby directed to achieve forthwith the full 

implementation of the Montana Environmental 

Policy Act including the economic analysis 

requirements of Sections 69-6504 through 69-6514 

. . . and 

aBE IT FURTHER RESOLVED, that economic analysis 

shall accompany environmental impact statements 

as required by the foregoing Sections of the act 

and shall encompass an analysis of the costs and 

benefits to whomsoever they may accrue, including considerations of employment, income, 

investment, energy, the social costs and benefits of growth, opportunity costs and the 

distribution effects , . ." 

A joint resolution is not binding as law on this Court, 

but we give it consideration as a clear manifestation of the 

(1959) , legislative construction of MEPA. State v. Tbomey/ 135 Mont. 35, 

(19261, 335 P.2d 1051; State ex rel. Jones v. Erickson/ 75 Mont, 429, 244 
The cost-benefit analysis required by MEPA, as construed 

by the legislature, encompasses a broad consideration of several 

factors categorized in House Joint Resolution No. 73, approved 

March 16, 1974. A reasonable cost-benefit economic analysis 

undertaken pursuant to these criteria would, in effect, 

accomplish most of the purposes sought to be served by an 

environmental impact statement. 

Appellants concede, however, that the Department's draft 

EIS undertakes an analysis of the indirect costs and benefits of 

MPC's proposal although not of the type appellants suggest. 

Neither the Siting Act nor MEPA explicitly requires such 

type of analysis. It should also be noted that after the draft 

EIS appeared, the Department promulgated rules which require 

EIS's prepared by the Department to include the following: 

"(e) economic and environmental benefits and costs 

of the proposed action (if a benefit-cost analysis 

is considered for the proposed action, it shall be 

incorporated by reference or appended to the 

statement to aid in evaluating the environmental 

consequences) ; 

"(f) the relationship between local short-term 

uses of man's environment with the effects on maintenance and enhancement of the long-term productivity of the environment;" 

MPC argues that MEPA does not require a formal and mathematically expressed cost-benefit analysis, citing Cady v. Morton 

(9th Cir. 1975), 527 F.2d 786. 

On this point we hold there has been sufficient compliance 

with MEPA so that the EIS is not insufficient as a matter of law. 

Although this area could have been more fully explored by the 

Department in preparing the EIS, the ETS's, when viewed in their 

entirety, sufficiently apprised the Board members of the 

project's cost and benefits to enable the Board to render a 

knowledgeable decision. 
Appellants next charge that a deficient EIS cannot be rendered sufficient by reference to the record outside the 

documents. The trial court concluded that " . . . the entire 

Siting Act process and the Board's decision based upon the entire 

record is the functional equivalent of an Environmental Impact 

Statement." e. 

Since we have held that the environmental impact 

statements are not insufficient as a matter of law, we need not 

address nor determine the issue of functional equivalency. In 

sum, ule hold that the record before us establishes that the 

Board *s decision was not clearly erroneous, arbitrary or 

capricious; that substantial evidence supports the Board's findings and order; and that appellants rights were not substantially prejudiced! We observe that tested by hindsight, it is 

not uncommon to uncover technical shortcomings in an environmental impact statement or to point out areas therein that might 

have been investigated or analyzed in more detail. However, 

where appellant's rights are being prejudiced by substantial 

deficiencies in an EIS, it is no less an obligation of appellants 

to spell out in some detail such deficiencies to enable the 

Department to correct the same prior to the Board hearing and 

adjudication which was not done here. Otherwise the whole process of certification would be needlessly drawn out and postponed 

to the point that such certification would become economically 

prohibitive, a mockery, and illusory. 

With regard to the second issue (whether the Board's 

findings, conclusions and Certificate of Environmental 

Compatabil i ty and Need are statutorily adequate and supported by 

the evidence), we reiterate the circumscribed nature of our standard of review under MAPA. We will reverse or modify the decision below if the judgment is clearly erroneous or arbitrary or 

capricious or characterized by an abuse of discretion, Section 

2-4-704(2) (e) & (f) , MCA. In Western Bank of Billings v. Montana 
\ 

State Banking Board (1977), 174 Mont. 331, 340, 570 P.2d 1115, 

1120, we state: 

"This Court has repeatedly held that its function on appeal is to determine whether there is 

substantial evidence in the record to support 

the judgment. Strong v. Williams (1969), 154 

Mont. 65, 460 P.2d 90." 

Appellants' contend there was insufficient evidence in the 

record on the need for a 161 KV line in the Upper Madison/ Lower 

Ruby valleys and at Big Sky; that there was no evidence to support the finding and conclusion that the proposed line and 

routing cons ti tuted the minimum environmental impact; that the 

Board failed to comply with MAPA in issuing its findings of fact, 

and conclusions of law; and that the Board's Certificate of 

Environmental Compatabili ty and Public Need violates sect ion 

75-20-303(3), MCA, of the Siting Act. 

Appellants first contend that there was insufficient evidence of need for the 161 KV line in the Upper ~adison/~ower Ruby 

valleys. The Board's finding of need regarding this states as 

follows : 

"Although the need for the Bozeman to Ennis and 

Dillon segment of the transmission facilities is 

not as immediate as the Gardiner-Clyde .- - -, 

Park seaments of the link. existina - -- trans- 2 -- - 

mission facilities ---- in the ~ub~ and Madison 

Valleys - are reachins their ca~acitv limits and -- - 

with population growth - and increased electrical 

demands -- due to intensive sprinkler irrigation a 

definite need 

--- 

exists for an additional reliable 

electrical transmission facility. The completion of this leg of the project also provides 

for a fully integrated electrical transmission 

system to serve the entire area. Conversion of 

existing facilities in the Madison and Ruby 

Valley areas would provide only short-term solutions that would result in economic waste. The 

best long-term solution to the electrical needs 

of the area and projected growth patterns is 

achieved through a 161 KV system proposed by the 

applicant with the 69 KV system from migrant to 

Gardiner ." (~mphasis added. ) 

Appellants concede that there is evidence to support the 

underlined portion of the above finding but argue that there is 

no support for the contention that a 161 KV facility is required 
to meet these needs. Although there was a substantial con£ lict 

in the record concerning the amount of power actually needed in 

the Upper Madison/Lower Ruby valleys, there was substantial evidence to support the Board's decision. It was the function of 

the Board to resolve these conflicts and we may not substitute 

our judgment for that of the Board on the weight of the evidence .- - 

on questions of fact, section 2-4-704 (2), MCA. Substantial evidence supported the Board's determination that a 161 KV facility 

was needed in the Upper Madison/Lower Ruby valleys. The record 

is replete with facts indicating that the existing transmission 

lines were overloaded; that only a 161 KV line would provide 

long-term, cost-effective service and that the needs of Vigilante 

Electric Cooperative which used MPC electrical transmission lines 

required a 161 KV line. 

Appellants next contend that there was insufficient evidence of need for a 161 KV line to Big Sky and that the evidence 

does not support the following findings made by the Board; that 

available load growth information for MPC's systems supports 

their forecast covering future load growth for both peak and 

average energy; that conservation activities will not materially 

reduce the demand for power in the service area; that the benefits derived from the utilization of waste heat do not outweigh 

the advantages of the electric transmission line; that new technolog ies ( undergrounding, on-site generation, solar energy, wind 

power and total energy systems) have not reached a point where 

they present a feasible economic and environmental alternative to . 

the proposed facility; and that there are no viable sources of 

alternative energy. 

We disagree. We hold there was substantial evidence 

to support the Board ' s findings. 

The Board's finding No. 17 contains underlying facts 

(which were before the Board) from which the Board could conclude 

that there will be significant future development and consequent 
electrical need at Big Sky as well as the Gallatin Canyon area as 

a whole (which will also be served by the proposed line) : 

"That the Big Sky Resort and Gallatin Canyon 

area can be considered as a separate area for 

growth consideration and projections. Big Sky's 

master plan shows a projected 2,700 condominiums 

and 1,263 lots. At present, only 21% of the 

condominiums are constructed and 52% of the lots 

are developed while not all of the .condominiums 

have been sold or are in use. In addition, Big 

Sky is based on an '.all electric'' concept and 

electricity is needed for the hostels, medical 

center, fire department, restaurants and other 

commercial facilities as well as the ski lift, 

swimming pools and golf course. While growth of 

-- the Big Sky facility - has declined considerably- 

--- due to the economic market, future growth -- can be 

anticipated of a substantial nature. In addi- T- -- 

----- tion to the Blg Sky resort, satellite developmerits --- such as ICBI which has purchased -- 45 acres 

--- and has an option 7- 

on 111 acres --- near Big Sky 

plans - 200 residentlal condominiums, together 

with shopping - and commercial facilities. In 

-- view of this activity, additional developmGt - in 

the Gallatin Canyon area --- can also be 

anticipated." (Citations omitted--emphasis 

added. ) 

In finding No. 18, the Board noted that the projections had twice 

been revised due to adverse economic conditions but stressed the 

increased needs of the Gallatin Canyon area and other areas adjacent to Big Sky. 

Next, there was substantial evidence adduced at the 

hearing from which the Board could conclude that conservation 

activities would not materially reduce the demand for power. 

Appellants urge that twice as much insulation could cut the 

heating load at Big Sky in half. However, one witness stated 

that the Big Sky condominiums were better insulated than most 

Montana buildings. From the design plans of Big Sky, which were 

contained in the draft EIS, the Board could have reasonably 

concluded that conservation practices at Big Sky had progressed 

to such a point that more of such practices would not materially 

reduce the need for more power. 

The Board made the following findings with regard to the 

use of waste heat and on-site electrical generation: 

"20. On-site generation by a gas turbine 
Z 

generator or diesel power generation with utilization of waste heat has been proposed by the 

Montana Wilderness ~ssociation as an alternative 

for a power line to Big Sky. Fuel costs -- for on- 

- site generations would be fourteen times -- as much 

as fuel costs associatedwith production - of 

aectrl'cit at a central station such as +-- Co strrp Further, on-site generationwould not 

re1 ieve- the reliability problems which would be 

relieved by a loop system coming in from the 

Ennis area and connecting with the existing line 

up the Gallatin Canyon. Nor would :it have the 

benefit of serving the related developments in 

the area such as ICBI and other developments in 

the Gallatin Canyon area. Although utilization 

of - - waste - heat apoears to beatTre that L a. --- 

should be considered in future developments, - the 

benefitsto -- be derivedtherefrom in connection 

---- with the Blq Sky project --- are not so significant 

-- as to outweigh - the advantages -- of the electric 

transmission line. 

"21. ---- In view of the energy crisis -- in the petroleum industrv - - -- it is not felt that on-site 4 --- generation would be a feasible long-term 

alternative. ~ai= emphasis is beinq placed - - upon util ization-of electrical power without the 

undue consumption of our natural pe troleun 

resources and on-site diesel or gas turbine 

generating facilities would be .detrimental to 

this policy. Coal would not serve as a feasible 

alternative for on-site generation due to the 

transportation requirements and environmental 

problems encountered in an area of this type by 

the utilization of coal for the production of 

electrical energy. No available hydroelectric 

site exists in the general area." (Emphasis 

added. ) 

In finding No. 28, the Board found that, although new technologies such as undergrounding, solar and wind power might be 

used to minimize adverse environmental effects, the development 

of the same had not reached a point where they presented a 

viable economic alternative to MPC1s proposed facility. 

These findings were supported by evidence of fuel costs 

from which the Eoard could have concluded that on-site generation . 

was not a financially feasible alternative. Similarly, evidence 

that waste heat in a total energy system is used in downtown 

Manhattan and in several buildings in Missoula does not require 

the Board to accept that method as desirable at Big Sky and 

therefore reject the proposed transmission line. The same 

reasoning obtains for the alternatives of solar and wind power as 

well. Appellants related attack on the ~oard's findings that 
* I 

I 

-. 

\ 

there are no viable sources of energy to replace that which would 

be provided by the electrical transmission line is disposed of by 

these considerations also, i.e. the Board is not bound to recommend that Big Sky use alternate sources of energy because 

others have used them success£ ully. 

Appellants further challenge the findings relating to the .- 

route for the transmission line with the least amount of adverse 

environmental impact. The Board found that on the Bozeman to 

Ennis to Dillon segment of the line, the preferred corrider route 

was that of the applicant's, while on the Big Sky segment of the 

line, the Ennis-Jack Creek-Big Sky corridor was the most preferred route, the Ennis-Cedar Creek-Big Sky corridor the next 

nost preferred corridor and the Gallatin Canyon route, from 

aozeman to Big Sky, the third most preferred route. Appellants 

claim that such findings are either unsupported by the evidence 

or entirely contrary to it. 

We disagree. For example, the Board had before it evidence showing the Gallatin Canyon area was more highly populated 

than the Jack Creek or Cedar Creek area. Thus a bigger 

transmission line through Gallatin Canyon area would be viewed by 

more ,people and be aesthetically less pleasing. The Board also 

had before it charts and statements showing the number and duration of outages that had occurred at Big Sky in recent years and 

the fact that any transmission line through Gallatin Canyon 

would probably use the Bozeman-Hot Springs substation. Thus an 

outage at that substation would have a considerably greater 

impact on Big Sky than if the resort were served by another 

energy resource as well, i.e. electricity coming from the 

Dillon/Ennis area through Jack Creek or Cedar Creek. The draft . 

ETS contains additional support for the Board1 s conclusion 

favoring MPC1s proposed route from Bozeman to Dillon. 

Appellants next argue that the Boardls findings and 

conclusions fail to comply with sections 2-4-623(1),(3),(4), MCA, 
of YAPA which provide : 

"Final orders -- notification --availability. 

(1) , . . Findings of fact, if set forth in 

statutory language, shall be accompanied by a 

concise and explicit statement of the underlying 

facts supporting the findings. 

"(3) Each conclusion of law shall be supported 

by authority or by a reasoned opinion. 

"(4) If, in accordance with agency rules, a 

party submitted proposed findings of fact, the 

decision shall include a ruling upon each proposed finding. " 

Appellants contend that the findings are in violation of section 

2-4-623(4), MCA, because all parties here submitted proposed 

findings of fact and conclusions of law and the Board did not 

explicitly rule on each finding and each conclusion. This argument exalts form over substance. We do not construe the 

statutes so narrowly or technically. To do so would place an 

onerous burden on the Board, especially when it is remembered 

that usually these types of hearings involve multiple parties 

representing various interests and each party normally submits 

its own findings and conclusions. The findings and conclusions 

here implicitly rule on the findings and conclusions submitted 

by the parties and we find them to be sufficient in this case. 

Moreover we have previously held that section 2-4-623(4), 

MCA, does not require a separate, express ruling on each required 

finding as long as the agency's decision and order in such proposed findings are clear, Montana Consumer Counsel v. Public 

Service Commission and Montana Power Co. (1975), 168 Mont. 180, 

Appellants also claim that a number of the Board's findings merely "parrot" several sections of the Siting Act without 

setting forth the underlying facts, in violation of section 

2-4-623(1), MCA, supra. We agree that some of the findings do 

track several statutes in the Siting Act. This alone does not 
-0-- 

'. 

render them insufficient provided the underlying factual basis is 

apparent. While each finding is not immediately followed by the 

supporting underlying facts, when the findings and decision are 

viewed as a whole, it will be seen that the findings are adequately factually supported. It would be an unnecessary and idle 

act to remand for correction of any technical deficiency where 

p. 

the record discloses an underlying factual basis for each 

finding. The law does not require idle acts. Section 1-3-223, 

Appellants contend that each of the Board Is conclusions of 

law are not supported by authority or by reasoned opinion and 

therefore violate section 2-4-623(3), MCA, supra. We disagree. 

Again, while it is true that each conclusion of law is not immediately followed by an authority or opinion, such is not required. 

The conclusions here are sufficiently supported by reasoned opinion to render their basis reasonably ascertainable. These 

conclusions are supported by the findings of fact which we have 

previously approved. 

Appellants1 also argue that the Board Is Certificate of 

Environmental Compa tabili ty and Public Need violates section 

75-20-303(3) , MCA, which provides : 

"(3) Any certificate issued by the board shall 

include the following : 

"(a) an environmental evaluation statement 

related to the facility being certified. The 

statement shall include but not be limited to 

analysis of the following information: 

a ( i) the environmental impact of the proposed 

facility; 

"( ii) any adverse environmental effects which 

cannot be avoided by issuance of the 

certificate; 

"(iii)problems and objections raised by other 

federal and state agencies and interested 

groups; 

"(iv) alternatives to the proposed facility; 

"(v) a plan for monitoring environmental 

effects of the proposed facility and 

" (vi) a time limit as provided in subsection (41, 
iu'ring which construction of the facility must 

be completed; 

"( b.) a statement signed by the applicant 

showing agreement to comply with the requirements of this chapter and the conditions of the 

certificate ." 

While the pages of the Certificate itself do not comply 

with the above statute, we note that, in the second paragraph, 

the Certificate fully incorporates by reference the Board 's 

findings, conclusions and order. Taken together these two documents fulfill the requirements of section '75-20-303 ( 3), MCA, 

supra. 

Directing our attention to the third issue, appellants 

argue that they were denied the due process guarantee of a fair 

and impartial tribunal because of Sabol's participation in the 

proceedings both as a board member and a - hearing officer. 

Appellants allege that Sabol had a pecuniary interest in the outcome of the case because he was retained as legal counsel by Ski 

Yellowstone, Inc., during his term of chairrnan of the Board of 

Natural Resources and Conservation. Appellants claim this 

created a conflict of interest in that whatever the Board decided 

in connection with providing additional electrical transmission 

facilities and services to Big Sky would establish a precedent in 

any future facility siting request concerning Ski Yellowstone, Inc. 

Appellants' second ground for Sabolls alleged bias 

involved a newspaper article on February 15, 1976. In the 

article Sabol was quoted as saying that some environmental groups 

were losing credibility by opposing all development projects and 

MWA was specifically mentioned. The article appears below: 

" SOME ENVIRONMENTAL GROUPS 

LOSING CREDIBILITY, SABOL SAYS 

By Larry Wills 

Chronicle Staff Writer 

"The Chairman of the ' Board of Natural Resources 

has charged that some environmental groups are 

losing credibility in opposing all development 

projects. 

Joe Sabol, a Bozeman attorney, and head of the 

volunteer state board that reviews all major 

utility construction charged that some groups 

are automatically opposed to all developments no 
natter how good or bad they may be. 

'1 think it is time that these groups re-assess 

their positions on some proposals, he said. 

'Some proposals are good, and some are not, but 

they are opposed to all projects, and are 

creating a polarization of attitudes, Sabol 

charged. 

The attorney said the opposition to all projects is a loss of perspective and concentrates 

on the trivia' that surrounds a project, 

Sabol made his charges during an informal press 

conference concerning demands that he resign his 

resource board position due to conflict of 

interest. 

The charges from the Montana Wildlife 

Federation and the Nontana Wilderness 

Association stemmed from Sabol 's working for the 

Ski Yellowstone development, and also sitting as 

chairman of the resource board. 

Sabol said flatly he saw no conflict, and would 

not quit until he believed there was a conflict 

of interest. 

He said he did not take the job as Ski 

Yellowstone attorney until he was assured that 

the position was not in conflict, and that the 

project itself was satisfactory in his own mind. 

He also said he received assurances from the 

governor that the two positions would not be in 

conflict. 

Sabol also said the Ski Yellowstone issue has 

never come up at board meetings, and that no Ski 

Yellowstone official has ever approached him as 

a member of that board. 

- The attorney was - asked ------ to quit his post in let- 

----- ters that the MWA and Wildlife group -- sent to 

- Gov. Judge. 

Sabol defended the resort as one that is 

better than most in alleviating bad environmental effects, and said the proposal should be 

recognized for its accomplishments. 

Referring to two environmental groups' opposition of the resort, Sabol said, 'They can't find 

anything wrong with the merits of Ski 

Yellowstone, so they attack the people ,' 

The letters were sent to Judge after Sabol 

wrote the governor and Wes Woodgerd, head of the 

Fish and Game Commission objecting to 

'propaganda' against the resort planned on the 

north shore of Hebgen Lake. 

Sabol objected to a grizzly bear presentation 

which the attorney said implied the resort would 

interfere with the bears' habitat. Sabol 

charged there is no proof that the Hebgen area 

is habitat for the bear. 

Also questioned was a Fish and Game employee's 

'free lancing' articles while on the state 

payroll. The attorney referred to articles 

printed in a Denver paper against the resort. 

The net result of the three-year delay for the 

resort, Sabol said, is that it is driving other 

developers out of the state. The proposal is 

still under study by the Gallatin National 

Fotes t. 

'The legislature and the environmentalists 

have done what they set out to do, minimize 
development, ' he said ." (Emphasis added. ) 

Appellants also claim that during a recess in the Board 

hearing on September 24, 1976, Sabol instructed the attorney for 

the Department of Natural Resources and Conservation not tso 

cross-examine the witnesses for MWA because its counsel was 

trying to make a record for appeal. Appellants argue this ?. 

demonstrates actual bias on the part of Sabol, 

We note that Sabol participated as hearings officer for 

the Board from April 10, 1976, to September 1, 1976. During this 

period two preconference hearings were held on April 10, 1976, 

and Nay 12, 1976. At the second prehearing conference, Rick 

Applegate, a MTJA and EIC member, filed an a£ fidavit seeking 

disqualification of Sabol as a hearing office and member of the 

Board considering MPCvs application. On September 1, 1976, 

Sabol removed himself as hearings officer but declined to remove 

hiaself as a member of the Board. The Board voted unanimously to 

deny the attempted disqualification. 

Appellant cites Withrow v, Larkin (1975), 421 U.S. 35, 95 

S.Ct. 1456, 43 L.Ed.21 712, for the proposition that the constitutional due process guarantees apply to administrative agencies 

as well as the courts. While it is true that language supporting 

that premise appears in Withrow, the actual holding of that case 

involves the question of whether the Wisconsin Doctors Examining 

Board had the power to investigate unprofessional conduct as well 

as adjudicate it. Nowhere in Withrow do we find any facts similar to the case at bar, i.e., where the alleged bias of one of 

the decision makers is at issue. 

Appellant also cites Taylor v, Hayes (1974), 418 U.S. 

488,94 S.Ct. 2697, 41 L.Ed.2d 897, for authority that actual bias 

is unnecessary and that the appearance of bias is sufficient. 

 he facts in Taylor were that at the conclusion of a Kentucky 

murder trial, the presiding judge sentenced one of the lawyers to 

four and one-half years in prison for nine counts of contempt 
occurring during the trial and barred him from practicing before 

that court. The Supreme Court found that to so rule without a 

notice and hearing violated the lawyer's procedural due process 

rights. The court also found that the lawyer's contempt trial 

should be before a different judge because the original trial 

judge had become embroiled in a running controversy with the 

C. lawyer. 

This Court has stated its position clearly with regard to 

biased decision makers: 

" [It is] this court's desire to zealously guard 

the right to Eair and impartial hearings. It is 

not necessarily the fact of bias that concerns 

us but the possibili-hat bias might exist . . 

" [W]e do warn . . . all administrative boards 

and tribunals that they should zealously guard 

against any appearance of unfairness in the conduct of their hearings." State ex rel. Fish v. 

Industrial Accident Board (1961), 139 Mont. 246, 

248-49, 251, 362 P.2d 852, 853, 855. 

Inc . Accord, Graham v. Tree Farmers/(l963), 142 Mont. 483, 385 

Nonetheless, the holdings both in Graham and Fish, supra, 

state that substantial rights of the aggrieved party must have 

been prejudiced before the court will censure an administrative 

board for the conduct of a hearing. The Supreme Court in Graham, 

supra, stated : 

"We are constrained here, while disapproving the 

use of Mr. wood as a hearings officer, in view 

of the preponderance of proof in this record, to 

--- fail to see where any different result could - be 

reached - and for that reason --- we feel the error to 

be such that it does not call for a reversal - and 

ErE heariE7sFfFaZTEeclaimant is con- - ---- 

cerned. ( Emphasis added. ) 142 Mont. atT9r 

385 p.2d at 90. 

In taking a closer look at the possible in£ luence of 

Sabol's activities on the Board's ultimate decision, we find the 

following : Sabol presided at the first prehearing conference on 

April 10, 1976, at which time the routing and need for the 

transmission lines as well as witnesses and discovery were 

discussed among the various lawyers. Sabol also presided over 
the second prenearing conference on May 12, 1976. At this conference the lawyers exchanged witness lists and discussed 

depositions, the order of appearance of the parties and deadlines 

for exchanging interrogatories and written statements. During 

the summer of 1976, the Department moved to bifurcate the hearing 

into two hearings. Also, both MWA and MPC.moved to have the 

Board view the Gallatin Canyon area and MWA added the Ennis to 

Big Sky route as well. All three motions were argued at the 

September I, 1976, hearing and the motions to view were granted 

but the motion to bifurcate was denied. 

It was at this September 1 hearing that Sabol removed himself as hearings officer with Andriolo being substituted for 

him. The actual hearings on the issuance of the Certificate of 

Environmental Compatability and Public Need took place on 

September 23 and 24, 1976. It was during a recess at the 

September 24 hearing that Sabol allegedly told the Department 

attorney not to cross-examine the MWA witnesses. Sabolts term as 

a Board member expired on December 31, 1976. 

On February 9, 1977, Andriolo issued an order that all 

parties' proposed findings of fact and conclusions of law be submitted by March 1, 1977, with arguments thereon on April 21, 

1977, before the Board. On September 16 and October 28, 1977, 

the Board discussed. and approved Andriolot s findings and 

conclusions. The statutes relating to the Board's and hearings 

examiner's duties are set out below: 

"(9) At the conclusion of the hearing, the 

hearing examiner shall declare the hearing 

closed and shall, within 60 days of that date, 

prepare and submit to the board and in the case 

of a conjunctive hearing, within 90 days to the 

board and the board of health or department of 

health proposed findings of fact, conclusions of 

law, and a recommended decision ." Section 

75-20-220(9). 

"75-20-301. decisionof board--findings necessary 

for certification. (1) Within 60 days after 

submrsslo n of the recommended decision by the 

hearing examiner, the board shall make complete 

findings, issue an opinion, and render a 
decision upon the record, either granting or 

denyinq the application as filed or granting it 

upon such terms, conditions, or modifications of 

the construction, operation, or maintenance of 

the facility as the board considers 

appropriate . " 

While we do not approve of the alleged directions not to 

cross-examine the MWA witnesses, we fail to see how, on the 

record before us, the Board would have reiched a different result 

had Sabol removed himself entirely from the proceedings, Graham, 

supra. He did not participate in the Board's deliberation or 

discussion of the final decision, as evidenced by 

sections75-20-220(9) and 75-20-301(1), set out above. Under these 

statutes the Board's deliberations occur after the hearings examiner submits his proposed findings and conclusions and a recanmended decision. This was done in 1977, after Sabolls term on 

the Board expired. 

The Board's decision was not rendered until October 26, 

1977, and carried with four Board members voting in favor of 

MPC1s application, one member against it, and the chairman did 

not vote. We fail to see how Sabol's alleged bias prejudiced the 

substantial rights of the appellant. 

Similarly, we fail to see how Sabolls connection with Ski 

Yellowstone, Inc. resulted in the appellants1 receiving any less 

than a fair hearing and decision. The argument that a "precedent" will be set by granting MPC its transmission lines to Big 

Sky is tenuous at best and the fact that a developer must bear 

the first cost of conservation alternatives in lieu of additional 

electrical transmission facilitiesx does not persuade us that 

Sabol had a pecuniary interest in the present proceedings. 

With regard to the newspaper article appearing in the 

Bozeman Daily Chronicle, we note that none of the cases cited by 

appellants (which deal with a member of a hearing panel criti- . 

cizing a party already before it) are on point in the instant 

case. Here Sabol's comment appeared February 15, 1976, and the 
C 

-s 

first prehearing conference was not until April 10, almost~two 

months later. They do not reflect any prejudgment of the issues 

, 

placed before the Board in this case. 

Appellants argue that Sabol improperly interfered with the 

conduct of the September 24, 1976, hearing by the alleged - ex 

parte contact in the lobby during one of the recesses with 

Department of Natural Resources and Conseryation attorney 

MacIntyre. However, the depositions of Doug MacIntyre and 

Applegate indicate that appellants wanted the DNRC to conduct 

" friendly cross-examination", i.e. the MWA and DNRC occupied 

similar positions in the proceedings and were aligned on the 

corridor issue--50th advocated the existing Gallatin Canyon 

corridor rather than the Jack Creek/Cedar Creek route. We have 

previously held that no substantial rights are prejudiced by a 

hearing officer's decision to limit cross-exanination to those 

issues on which routes are adverse, because the "cross-examination" of nonadverse parties in reality becomes just more 

direct examination. Northern Plains, supra. 

Although neither party has raised the issue, section 

75-20-220(1), MCA, merits some discussion. That statute provides 

in part: 

"75-20-220. Hearing examiner--restrictions-- 

duties. (1) If the board appoints a hearing 

exaniner to conduct any certification proceedings 

under this chapter, the hearing examiner may not 

be a member of the board, an employee of the 

department, or a member or employee of the 

department of health or board of health." 

Under this statute, a hearing examiner may not be a member of the 

Board and Sabol was chairman of the Board at the time he was 

appointed hearing examiner. However, close examination of the 

enactment of the above statute and the facts of this case reveal 

that the statute did not apply to this proceeding. 

MPC filed its application on June 6, 1974, for a 161 KV 

line from Clyde Park to Dillon. On June 30, 1975, MPC filed an 

amended appLication increasing .the total mileage of transmission 
e -- 

under the amended application, 

lines requested and/the line was to consist of the five segments 

set out at the beginning of this opinion. The Department, by 

letter dated May 30, 1975, agreed to treat the amended application as relating back to the original (June 6, 1974) application. 

That letter contained the following statements : 

"The project application shall . . . be deemed 

to have been filed on June 6, 1974. . . [TI he 

Department . . . will not treat thez+amended 

applications as constituting a substantial 

change and, therefore, will not treat the 

amended applications as a new application. . ." 

Section 75-20-220(1) was included as part of the amendments to the Utility Siting Act and it was expressly provided 

that those amendments would only apply to applications received 

by the Department after January 1, 1975. 1975 Laws, Ch. 494, 

25. MPC's application was filed on June 6, 1974, and, due to the 

rela tion back discussed above, the amended application was deemed 

to have been filed on that date also. Thus the statute is not 

applicable to the proceedings here, 

Furthermore, the parties and the hearing examiner agreed 

that they were operating under the Utility Siting Act and not the 

amendments thereto, In the transcript of the third preconf erecce 

hearing conducted September 14, 1976, we find the following 

interchange : 

"HEARINGS EXAMINER: . . . "Now the first thing, it is my understanding 

that everybody is agreed that the hearing will be 

conducted under the provisions of the Utility 

Siting Act of 1973 rather than the Major 

Facility Siting Act which was enacted in 1975, I 

believe. Is that correct? 

"MR. WALSH [representing MPC] : That is correct. 

"HEARINGS EXAMINER: And how about you, Bill? Is 

that agreeable to you? 

"MR. MADDEN [representing MWA$ : That is 

correct.. 

"HEARINGS EXAMINER: And how about you, Jim? Is 

that agreeable to you? 

"MR. MOORE [representing American Fork Ranch] : 

Yes. 
In the transcript of the September 23 hearing we also find this: 

RHEARINGS EXAMINER: Thank you, Mr. Sabol. This 

is a hearing under the Utility Siting Act of 

1973, and the proceedings under this, at this 

hearing will all be in conformity with that particular Act ." 

For the above reasons, it is our opinion that section 

MCA , 75-20-220(l) ,/did not apply to these proceedings. 

t. 

Affirmed. 

~~.

Chlef Justice 

We concur H 

Justices 

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

not participate. 
Mr. Justice Frank B. Morrison, Jr., dissenting: 

I respectfully dissent. The draft environmental impact 

statements are grossly inadequate for failure to analyze need 

and explore alternative sources for satisfaction of need. 

Montana's Environmental Policy Act (MEPA), section 75- 

1-201, MCA, 1981, requires preparation of an environmental 

impact statement concerning the following matters: 

(1) the environmental impact of the proposed actions; 

(2) any adverse environmental effects which cannot be 

avoided should the proposal be implemented; 

(3) alternatives to the proposed action; 

(4) the relationship between local short-term uses of 

man's environment and the maintenance and enhancement 

of long-term productivity; 

(5) any irreversible and irretrievable commitments of 

resources which would be involved in the proposed 

action should it be implemented. 

The Montana Major Facility Siting Act recognizes that 

certain utility "facilities," as defined by the Act, have an 

effect upon the environment to the extent that construction 

is prohibited "without a certificate of environmental compatibility and public need" acquired pursuant to the provisions 

of the Act. Section 75-20-102, MCA, 1981. Section 75-20- 

301(2), MCA, of the Act provides that a certificate of 

environmental compatibility and public need may not be 

approved by the Board of Natural Resources, except upon a 

finding and determination by the Board of, among other 

things: 

(1) the basis of need for the facility; 

(2) the nature of the probable environmental impact; 
(3) that the facility represents the minimum adverse 

environmental impact, considering the state of 

available technology and the nature and economics 

of the various alternatives; 

(4) each of the criteria listed in 75-20-503. 

Section 75-20-503, MCA, enumerates more than 60 environmental factors to be studied in determining whether a proposed 

facility should be approved. That section requires, in 

part, that the following be considered: energy needs including 

growth in demand and projections of need; availability and 

desirability of alternative sources of energy in lieu of the 

proposed facility; conservation activities which could 

reduce the need for more energy. 

The Facility Siting Act imposed upon the Department of 

Natural Resources the responsibility for undertaking technical 

studies and evaluations of the statutorily mandated environmental 

factors. Section 75-20-503 and 75-20-216(4), MCA, 1981. 

The Department of Natural Resources has the responsibility 

to formalize its technical studies in an environmental 

impact statement which it must file with the Board, to be 

used by the Board in making findings and determinations 

required under section 75-20-301, MCA. 

The "report" required of the Department of Natural 

Resources under the Facility Siting Act, section 75-20- 

216(4), MCA, serves as the basic technical and evidentiary 

document upon which the Board must rely in making its findings 

and determinations under section 75-20-301, MCA, as to 

whether a certificate should be granted or denied. Any 

substantial deficiencies in the required documents should 

invalidate the Board's findings and decision. 

Both the Siting Act and MEPA require the Department's 
draft and final environmental impact statements to consider 

the need for alternatives to the proposed facility. In this 

case, the environmental impact statements make no attempt to 

consider either the need for or alternatives to a 161 KV 

facility to service Montana Power Company's projected 

electrical demands in the Upper Madison/Lower Ruby Valleys. 

The DEIS did not adequately study the need for, and 

alternatives to, a 161 KV facility at Big Sky, Montana. The 

existing 69 KV line servicing Big Sky has a capacity of 9 

megawatts which could, with modification, be increased to a 

maximum capacity of 12-15 megawatts. In its application for 

a certificate to construct the 161 KV transmission line to 

Big Sky, Montana Power Company submitted that such a facility 

was needed to serve projected electrical loads at Big Sky of 

30 megawatts. A 161 KV line has a carrying capacity of 200 

megawatts. The Department's draft environmental impact 

statements accept Montana Power Company's load growth projections without question. Neither document makes any attempt 

to evaluate the basis of the projected load. There is no 

analysis of the types of energy demands at Big Sky which are 

expected to increase and, therefore, which could justify 

additional electrical transmission service. Such an analysis 

is critical. Energy demands for heat are not constant. 

They occur only during the winter and are heaviest only at 

certain times of the day. Furthermore, energy demands for 

heat do not require electrical service in that they can be 

met through other lower grade energy sources, including 

better conservation practices. These matters were not 

studied. 

The evidence produced at the hearing before the ~oard 

of Natural Resources disclosed that all but 5 megawatts of 

required electrical power could be met through conservation 
alternatives not requiring additional electrical service. 

5 megawatts is well within the capacity of on-site diesel 

generation or a smaller transmission line. A 161 KV line, 

with a carrying capacity of 200 megawatts, 195 megawatts in 

excess of that actually needed at Big Sky, seems clearly to 

- not be needed. The failure of the draft environmental 

impact statements to address the actual need and existing 

alternatives renders them totally deficient. 

The District Court recognized the gross inadequacies in 

the draft environmental statements but held such deficiencies 

to not constitute a basis for reversal of the Board's decision. 

The District Court said "that the entire siting act process 

and the Board's decision based upon the entire record is the 

functional equivalent of an environmental impact statement." 

No authority is cited for this proposition. 

The Facility Siting Act requires that "the Department 

shall make a report to the Board which shall contain the 

Department's studies, evaluations, recommendation and other 

pertinent documents resulting from its study and evaluation 

. . ." Section 75-20-216(4), MCA, 1981. The function of 

the statement is to perform technical analysis and provide 

expert documentation to the Board because the Board lacks 

technical expertise to perform this function itself. 

The Federal Courts have refused to adopt the rationale 

here adopted by the trial court. In Environmental Defense 

Fund, Inc. v. Froehlke (8th Cir. 1972), 473 F.2d, 346, 

the Corps. of Engineers argued that although discussion of 

alternatives in its EIS was deficient, the EIS should be 

considered sufficient when viewed against the entire record. 

In rejecting this argument, the 8th Circuit Court of Appeals 

said: 
"The Corps. argues that despite these omissions, its impact statement should be considered sufficient because 'at every step of 

the way, from preauthorization studies 

through detailed project planning, which includes recent environmental and mitigation 

studies, the voices of fish and wildlife interests have been heard, considered and reported to Congress.' We disagree. Nothing less 

than a complete impact statement can serve the 

important purposes of section 102 (c) (iii) of 

MEPA. As the District of Columbia Circuit 

Court stated in Natural Resources Defense 

Counsel, Inc. v. Morton, 458 F.2d 827, 834 

(D.C. Cir. 1972), 'it is the essence and 

thrust of EPA that the pertinent Statement 

serve together in one place a discussion of 

the relative environmental impact of alternatives. ' 

"A statement which includes a detailed discussion of all reasonable alternatives to a proposed project and their effects [case citation 

omitted] insures that agency officials will 

be acquainted with the tradeoffs which will 

have to be made if any particular line of 

action is chosen." 

The rationale adopted by the District Court to render 

the DEIS deficiencies harmless error, has the effect of 

nullifying the statutory requirement for environmental 

impact study. 

Unlike the District Court, the majority here attempts 

to defend the DEIS as adequate. Not even the Department 

which prepared the statements can defend them. The majority 

admits: 

"The Department, in its briefs to the District 

Court and to this Court, acknowledges that the 

EIS's contain no adequate consideration of alternatives to a 161 KV line serving the Upper 

Madison/Lower Ruby Valleys. The Department 

justifies this omission by stating that MPC 

failed to comply with the Siting Act and the 

rules adopted pursuant thereto in identifying 

in MPC's application the need for a facility 

to serve the demand in the Upper Madison/Lower 

Ruby Valleys." 

The majority then proceeds to gloss over the deficiencies 

in a style that approaches advocacy. Apparently, the law 

now will forgive and approve the Department's deficiencies 
that result from omissions in the Utility's application. 

The decision here has established a precedent which substantially 

weakens the Facility Siting Act and tends to judicially 

erode the environmental protection assurances afforded by 

the Montana Legislature. 

I view the course of action now being taken by this 

Court to be premised upon expediency. It is true that the 

process is cumbersome but had the Montana Power Company made 

a complete application, and had the Department of Natural 

Resources thereafter rendered draft environmental impact 

statements in conformity with law, these problems would not 

have arisen. By this decision we reward the wrongdoers. 

k 

I reqister a strenuous dissent. 
Mr. Justice Daniel J. Shea, dissenting: 

I join in the dissent of Justice Morrison. Because of 

time exigencies, I am unable to write a more detailed dissent 

at this time, other than what I state below. Time permitting, 

I will add a more detailed statement of why I dissent. 

The situation is that MPC has been permitted, without a 

showing of need or of alternatives, to expand the power 

available to Big Sky from a 69 KV line to a 161 KV line, in 

a situation where even in the untested application, the MPC 

has projected that Big Sky will need only 30 KV. 

The current 69 KV line to Big Sky has a capacity of 9 

megawatts. With modification, this line could be increased 

to a maximum capacity of 12-15 megawatts. The application 

of the MPC, accepted without question by the agency responsible 

for the environmental impact study (the DNRC), projects a 

need at Big Sky of 30 megawatts. This 30 megawatt projection 

was not substantiated by the MPC application, nor did the 

environmental impact study make any attempt to justify the 

load growth projection to 30 megawatts. Yet the MPC application 

is for a 161 KV line--which has a carrying capacity of 200 

megawatts, or almost five times the projected load growth 

stated in the application. 

As stated by Justice Morrison, all but 5 megawatts 

could, as disclosed in the hearing, be met through application 

of conservation alternatives which do not require additional 

electrical services. How, then, can the environmental 

impact statement be sufficient when it fails to address the 

need and the existing alternatives to the projected energy 

demand of Big Sky? It was error, as Justice Morrison points 

out, for the District Court to hold that the environmental 

impact statement could be given life by instead looking to 
the "Board's decision on the entire record," including the 

deficient environmental impact statement. Justice Morrison 

correctly concludes, on the other hand, that the environmental 

impact statement must stand on its own, and here it cannot 

stand. 

Nor can I understand the total failure of the DNRC to 

demand from MPC, that it comply with the information required 

to be in an application for a permit. Here the DNRC admitted 

that the MPC application was deficient, and that it did 

nothing to make the application sufficient. Rather, the 

DWRC proceeded with the environmental impact study without 

ever obtaining and evaluating either the need for the 161 KV 

line or the alternatives to supplying power for the projected 

needs of Big Sky. 

The fault in not making an adequate application can be 

laid directly at the doorsteps of the MPC. But the DNRC 

should not have started its environmental impact study until 

it had a complete or substantially complete application. 

Furthermore, if the study was started without noticing this 

rather glaring omission, once noticed, it was the duty of 

the DNRC to notify the MPC to complete its application and 

to further notify the MPC that the study could not be finished 

until the application was complete and the DNRC had evaluated 

the additional information provided in the application. 

Here that was not done. Rather, the DNRC proceeded with the 

study without ever compelling the MPC to comply with the 

clear directives of the Montana Environmental protection Act 

as to alternatives (section 75-1-201 (3) , MCA) and need 

(section 75-20-102(1), MCA). The DNRC can hardly be said to 

have been protecting the constitutional rights of Montana 
citizens to a clean and healthy environment when it made its 

impact study without directing the MPC to comply, and without 

itself complying with these statutes. Nor did the District 

Court or this Court fulfill its duty by approving an environmental impact statement so glaringly deficient.