Opinion ID: 751394
Heading Depth: 3
Heading Rank: 2

Heading: Assigning net benefits to the land

Text: 54 In determining how the net benefits of the incremental power generation should be divided between the flooded lands and the project operator, the district court ruled: 55 3. Share to Land. 56 In several of the FERC cases relied upon by plaintiffs, the share to land has been 50% to the power producer and 50% to the land owners. In all of these cases, the Indians owned some portion of the land underlying the dam and power plant and/or substantial portions of land used for storage of water. This case differs substantially in that all of the land underlying the dam and power station is owned by the District. Furthermore, this is a run-of-the-river dam which means there is no storage capacity and it would be inequitable to allocate 50% to the landowners in this case. The Court has determined under these unique facts that 40% is a more appropriate allocation. 57 The United States and the Tribe argue that the court erred in allocating 40 percent rather than 50 percent to the landowners. 58 The traditional allocation of net benefits under Section 10(e) begins with a division of net benefits into two equal parts; one of these parts is assigned to the landowners, the other to the investors who take the risks associated with developing the site. This first division gives recognition to the fact that there would exist no net benefit without both land and improvements. 59 . . . . . 60 There is good reason for the initial 50-50 sharing of net benefits.... [I]t is the ratepayer who compensates the Company for the risks taken. The ratepayer also pays all capital and operating costs so that, in a very real sense, the ratepayer has assumed the role of financier or entrepreneur.... 61 This division of benefits between the landowners and the consuming public also serves to effect the national policy which favors the development of water power resources. 62 PGE I, 1980 WL at  23- 24; see City of Vanceburg v. FERC, 571 F.2d 630, 635 (D.C.Cir.1977) (one-half of net benefits used to compute dam-use charges). 63 Nevertheless, there is not inherent in this 'method' a necessity that the division be on a 50-50 basis. Montana Power, 298 F.2d at 338 (quotation omitted). In determining that the amount should be so divided, it is not only desirable but from the standpoint of fairness and justice there must be taken into account all of the relevant attendant circumstances including the amount, if any, of the relevant investments by the parties participating. Id. 64 The court thus was required to consider all the facts in evidence regarding the unusual nature of this case. The court therefore did not err by taking into account that the Tribe owned none of the land underlying the dam and power plant and no substantial portion of the land used for storage of water. The Tribe can point to no case involving similar circumstances in which a different division of damages from that ordered by the district court was chosen. We conclude that the district court did not clearly err in allotting 40 percent of the benefits to the flooded land.