PUD considers settlement with Yakamas

EPHRATA — Representatives of the Yakama Nation met with Grant County Public Utility District commissioners Monday to continue negotiating a proposed settlement agreement, considered by both sides to be historic and beneficial.

The settlement agreement, negotiated during the last three years, would provide the tribe with a power allocation valued between $135 and $200 million, extending through the term of the PUD's anticipated new license to operate the Priest Rapids Hydroelectric Project.

Last week, PUD General Manager Tim Culbertson told the commission the value was between $150 and $200 million. This week, he said it was about $135 million. The exact number remains unclear.

The original, 50-year license to operate the Priest Rapids Project expired in October 2005. The PUD hopes to be issued a 50-year renewal from the Federal Energy Regulatory Commission this year.

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 Priest Rapids Project power, or its financial equivalent, the Yakamas promise to withdraw the appeal in federal court.

The withdrawal is a key purpose of the settlement agreement.

"To me this is a historical agreement," Philip Olney, Yakama general council chairman, told the commission.

"It's going to be an honor to enter into a partnership," said Ralph Sampson Jr., a Yakama tribal council member.

The agreement would make the Yakamas and the tribe's newly-formed utility, Yakama Power, a Priest Rapids Project power purchaser along with 22 existing purchasers.

The power allocation from the PUD to the Yakamas would be 20 average megawatts (aMW) through 2009. From 2010 to 2015, the power allocation would be 15 aMW. It would decline to 10 aMW in 2016 through the remainder of the agreement.

The value of the power allocation is to be between $2 million and $8 million annually for the Yakamas.

PUD Commissioner Greg Hansen, during the last two board meetings, argued the district is providing the Yakamas with too much money for withdrawal of the appeal in federal court.

"All the consideration is going one way," Hansen said. "The public needs a chance to digest this. It's an agreement they're going to have to live with for many years."

Hansen complains the tribe's appeal in federal court isn't likely to succeed, while the proposed settlement agreement carries risks to the PUD.

Culbertson claims the Yakamas wield significant influence on operations of hydroelectric dams along the Columbia River and could negatively impact utilities for power production.

After meeting with officials from the Bonneville Power Administration, PUD Commission President Randy Allred adopted a position similar to Culbertson's on the potential threat posed by the Yakamas.

"They could raise a lot more havoc, apparently, through their connections and sidings with environmental groups and others that would be far, far worse for Grant County," Allred said last week.

Commissioner Tom Flint sees the settlement agreement as an opportunity to develop a mutually-beneficial relationship with the Yakamas.

The PUD claims to benefit by having the right of first refusal to jointly develop new generation projects with the Yakamas.

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

Raymond Wiseman, general manager of Yakama Power, said there are a lot of benefits listed in the settlement agreement for both parties.

"If we get into generation projects then Grant County would have access to the renewable energy credits, which are a requirement under (Initiative 937)," Wiseman said in an interview Monday.

Initiative 937, passed in November, requires utilities like Grant PUD to get at least 15 percent of their power from renewable resources by 2020.

Hydroelectric power, such as Grant PUD's Priest Rapids and Wanapum dams, is not considered a renewable resource under I-937.

Hydroelectric power is now considered a maxed-out resource.

Renewable sources of electricity include wind, solar, biomass and the burning of waste products.

The PUD is reviewing the settlement agreement and plans to take public input at the May 29 commission meeting. The commission is scheduled to vote on the settlement agreement during their June 4 meeting. A signing ceremony would then be scheduled.

"This agreement is a significant undertaking for the people of Grant County," Allred said. "We are carefully evaluating the costs and benefits of this proposed agreement before bringing it forward for decision."