PUD approves settlement with Yakamas

EPHRATA — The Grant County Public Utility District commissioners on Monday approved a settlement agreement with the Yakama Nation, intending to improve relations with the tribe and settle litigation.

The settlement, negotiated during the last three years, provides the Yakamas with a power allocation valued between $135 and $200 million, said Jeff Atkinson, PUD manager of power planning and marketing. Atkinson said the amount depends on future market prices.

"Our risk is mitigated by the fact Grant PUD will typically make more money from its own wholesale sales when the market is high," Atkinson said.

The PUD markets the power on behalf of the Yakamas until 2015.

The Yakamas receive a power allocation of 20 average megawatts (aMW) through 2009. It declines to 15 aMW from 2010 through 2015, dropping to 10 aMW in 2016 through the end of the term of the PUD's anticipated new license to operate the Priest Rapids Hydroelectric Project.

The original 50-year license expired in October 2005. The project includes Priest Rapids and Wanapum dams. The PUD anticipates a 50-year renewal this year from the Federal Energy Regulatory Commission.

The Yakamas and the tribe's newly-formed public utility, Yakama Power, become project power purchasers as part of the settlement.

The commissioners accepted public comment prior to voting on the resolution approving the settlement. Five people spoke in favor of the settlement and three people against it.

The commissioners voted 3-1 in favor, with Greg Hansen opposed. Commission President Randy Allred did not vote.

"We are pleased to begin a new relationship with the Yakama Nation that follows in the footsteps of our relations with other tribes," Allred said. "In addition, we continue to have a special and unique relationship with the Wanapum, who live on the shore next to Priest Rapids Dam."

The PUD receives the first opportunity to jointly develop new generation resources with the Yakamas. It is promised rights to 75 percent of renewable-energy credits for the first 75 aMW of any renewable-generation projects developed by the Yakamas.

Possible projects include cogeneration at Yakama Forest Products, hydroelectric generation at Cle Elum Dam and wind development near the Yakama Reservation. Another possible project is the expansion, development and rehabilitation of the generation facilities on the Wapato Irrigation Project.

The Yakamas may ultimately decide not to develop projects like Yakama Forest Products. The PUD would not have an ability to force them to do so. The tribe could offer the PUD a joint project, but require undesirable terms.

"The settlement comes with risk," Allred said.

But it's unlikely the Yakamas would decide not to develop the projects, he said. And it's unlikely the Yakamas would offer to work with the PUD, but attach undesirable terms.

The settlement also formalizes cooperative work relating to management plans for Pacific Lamprey and White Sturgeon.

Raymond Wiseman, general manager of Yakama Power, said both parties are excited about future resource development.

The settlement provides the Yakamas with employment and helps meet power needs of consumers on the reservation into the future, Wiseman said.

"Both sides see this as more of a partnership," he said by phone Monday.

A signing ceremony is scheduled for June 11 in Toppenish, Wash.

The Yakamas, in March 2002, filed a complaint with FERC challenging power-sales contracts the PUD executed in 2001, with existing power purchasers. FERC dismissed the complaint, in November 2002, so the Yakamas appealed the dismissal to the 9th U.S. Circuit Court of Appeals.

In exchange for the power allocation, or its financial equivalent, the Yakamas promise to withdraw the appeal in federal court. The withdrawal is a key purpose of the settlement, according to the settlement document.

Former PUD Commissioner Bill Judge, who served from 1997 to 2002, spoke in opposition of the settlement. The process was shrouded in secrecy, he said, adding there's been a rush to sign the document with only 20 days of public inspection.

FERC decisions are very rarely overturned, so the appeal in federal court has little chance of succeeding, he said. Other tribes near the Columbia River are watching the outcome of the settlement and are now likely to make demands of their own, he added.

"We've given way to voluntary blackmail," Judge said.

Larry Peterson, former PUD general manager and current Port of Moses Lake commissioner, spoke in favor of the agreement.

Peterson said avoiding a ruling by the appeals court is in the best interests of the PUD.

He touted potential generation benefits, the possibility of credit toward requirements of Initiative 937 and cooperative work on fish issues.

Commissioner Tom Flint, who said he initially had a "hard time" supporting the settlement, credited PUD General Manager Tim Culbertson with changing his perspective.

"Right or wrong, the way we've been dealing with (the Yakamas) in the past has been a disaster," Flint said. "I think it was Tim (that) got to me one day. (Culbertson) says, 'You want to keep your friends by your side, but you want your enemies right up close, in your face.'"