(1) If after completion of the feasibility study of a particular project the department determines that hydroelectric power generation at the project would be feasible and in the best interest of the people of the state of Montana, it shall publish notice and make the site available for lease for the purpose of small-scale hydroelectric power generation, pursuant to 85-1-502 through 85-1-508, unless that action would result in the forfeiture of any necessary federal license, permit, or exemption, in which case the department may proceed under 85-1-509.
(2) In issuing a notice of availability of a site for lease under this section, the department shall include in the notice any reasonable conditions it may find necessary in order to protect the interests of the state.