PPL Montana has reduced the amount of its 2002 property tax appeal by 23 percent in seven Montana counties, freeing up $1.7 million in tax revenues for Montana schools, road projects and other uses.

The change comes from a recalculation by PPL Montana of how the company believes taxes should be assessed on its hydroelectric dams.

"We believe this change, which reflects a more in-depth analysis than we were able to complete by the time we had to file our original protest, provides a more accurate and equitable way to calculate the 2002 tax value of our facilities," said Brad Spencer, vice president and chief operating officer of PPL Montana. "We are pleased that it also has the effect of providing some relief to Montana counties and school districts."

Spencer noted that PPL Montana also has tax appeals pending for the 2003, 2002, 2001 and 2000 years because PPL Montana is being taxed at a much higher rate than the owners of similar power plants are. He said the company continues to seek a fair solution to the problem.

"PPL has paid all of its taxes, and will continue to do so, pending the resolution of our appeals," Spencer said. "We're sensitive to the effects our tax appeals are having on the budgets of counties and school districts, but we have an obligation to pursue fairness on this issue — just as any property owner would — if they were being taxed at rates as high as double that of their neighbors."

Under the revised 2002 appeal, counties will have the following amounts of tax money — already paid by PPL Montana — no longer under dispute: Cascade County, $955,987; Sanders County, $268,454; Lake County, $227,232; Lewis & Clark County, $209,993; Madison County, $28,207; Stillwater County, $11,926; and Flathead County, $11,623.

Under the change, PPL Montana is calculating taxes based on the actual output of the hydroelectric plants, instead of calculating tax based on their "rated capacity" to produce electricity. Under the new formula, which PPL believes is more equitable, PPL Montana would owe more taxes for 2002 than if the plants were taxed on their rated capacity.

PPL Montana has offices in Billings, Butte and Helena. With more than 500 employees, the company operates the coal-fired Colstrip and Corette power plants and 11 hydroelectric facilities along the Missouri, Flathead, Clark Fork and Madison rivers and Rosebud Creek. PPL EnergyPlus, another PPL subsidiary, operates an energy-trading floor in Butte that markets and sells power in the wholesale energy market.