The Great Lakes Fishery Trust was created in 1996 as a part of a court settlement for fish losses at the Ludington Pumped Storage Plant hydroelectric facility jointly owned by Consumers Power Company (now Consumers Energy) and the Detroit Edison Company (now DTE Energy). The facility has operated since 1972 under a Federal Energy Regulatory Commission (FERC) license on Great Lakes bottom lands leased from the Michigan Department of Natural Resources (MDNR). Although both the FERC license and the state lease required measures to prevent entrainment and destruction of fish at the facility, many fish were killed as a result of the operation of the project.

After a decade of negotiations between the state and the utilities failed to eliminate the fish losses at the facility, the Michigan United Conservation Clubs (MUCC) and the National Wildlife Federation (NWF) filed a legal action with the FERC , and in a second action sought regulation of the facility in federal court under the provisions of the Clean Water Act. Subsequently, the state of Michigan filed an action in state court for compensation for fish losses at the facility and intervened in the FERC proceedings seeking the installation of barriers to reduce future damages to Great Lakes Fishery resources. The MUCC and NWF, along with the U.S. Department of the Interior and several Indian tribes who also had compensation claims, joined with the MDNR in a comprehensive settlement with the utilities.