Kretz bill to address Boundary Dam lease stalemate passes House, heads to Senate

House Bill 2925 would settle impact fees for Pend Oreille County, Seattle City Light disagreement

A measure that would finally break the deadlock on the Boundary Dam lease agreement between Pend Oreille County and Seattle City Light jumped the first hurdle in the legislative process on February 16. Rep. Joel Kretz, R-Wauconda, sponsored House Bill 2925 on behalf of his constituents.

House Bill 2925 would address the financial impact of hydroelectric energy facilities and generation in counties, specifically Pend Oreille Rep Kretz on House Floor 2-2010County. Escalator fees paid to the county for the footprint of the energy facility location were 4.7 percent in the 1990s, but current fees are about 2.7 percent. The goal of the legislation is to bring lease payments up-to-date to reflect today's costs for counties that site a facility or already operate one.

The problem, Kretz explained, is that while the value of property and energy produced has gone up, lease payments to the counties hosting the facilities have not kept pace.

“The final offer on the table to Pend Oreille County was about $2 million, but if it were a private utility company leasing the facility the payments would be anywhere from $9 to $17 million in costs. That's a huge difference that we need to come to a middle ground on,” Kretz said. “The county and Seattle City Light have been at an impasse. The utility has refused to make lease payments on Boundary Dam for over a year now, so we need to settle this issue.”

A PUD operating in the county would pay a privilege tax of around $6.5 million. The fees being paid by Seattle City Light are far lower than the market rate, Kretz added.

“This bill provides a framework for lease rates to be negotiated in the best interest of both the counties and utilities. One of the concerns is that it is pretty tough for small counties to fight big utilities and work out a deal that is fair for the people in the area,” Kretz said. “I am pleased to see the arbitration element added to my legislation because it will force everyone to the table to deal in good faith.”

Under an amended version of the bill, arbitration would be required and paid for by the utility, should an impasse arise in the future.

“In all, we are making headway on a pretty contentious issue that both parties feel strongly about. I really appreciate the support from all the Pend Oreille County officials as I work this bill through the process. The county commissioners and others did an exemplary job of navigating the legislation through the House. The fact that they came to Olympia to ensure the issues in the measure didn't get sidetracked was incredibly critical. They deserve a lot of credit. We have more heavy lifting to move the bill through the Senate and signed by the governor, but we are making progress,” Kretz concluded.

House Bill 2925 will be forwarded to the Senate for consideration.

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