City Light, Pend Oreille County at odds over payment

Seattle City Light and a rural Eastern Washington county have reached an impasse in negotiations over an annual payment, so they are moving toward arbitration.

For years, Seattle City Light-owned Boundary Dam in Pend Oreille County has provided about half of Seattle's electricity. In return for the dam's impact, the utility pays an annual fee, which last year was $1.3 million.

But this year the struggling county asked for three times as much, and started paying a Seattle consultant $3,000 a month to negotiate on its behalf.

Talks have stalled, and in a letter Wednesday, Seattle City Light Chief of Staff Sung Yang suggested the two parties begin arbitration.

"Obviously we'd like to still keep talking," Yang said, but added: "What's clear to me now is there is really fundamental disagreement."

The county and city have been without an agreement since the beginning of the year.

Seattle officials say their contribution — which has risen to keep pace with inflation in the past — covers the county's costs associated with the dam: road maintenance, public safety, a few additional students in the schools.

But the county's economy has been sliding, and the tax base eroding. Timber mills have closed, and late last year, 150 people were laid off from a zinc mine.

Pend Oreille County officials feel that since Seattle City Light is making a lot of money selling Boundary Dam power wholesale, the utility should share the wealth with the county that hosts the giant dam.

Yang made the county an offer in November that he says represents a 30 percent increase over the previous 10-year arrangement. In April, he sat down with Pend Oreille County's three commissioners, who made the trek from the state's most northeastern corner to try to convince Seattle it should share the utility's wealth with their poor communities.

Pend Oreille's counterproposal, according to Yang, was a 100 percent increase. It was comparable to what the city would pay in property taxes. Seattle City Light is exempt from paying property taxes on the dam.

"We just thought on its face that was unfair and kind of unreasonable," said Yang. State law requires the utility to pay only for its impact, and the county hasn't provided information about how the impact has increased 100 percent, according to City Light.

Bob Royer is the consultant Pend Oreille County hired to help with the negotiation. He said the county commissioners haven't had a chance to discuss Yang's letter.

"We're still just digesting this thing," he said. But asked whether the negotiations were at an impasse, he said: "I don't know if you can call this negotiation."

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com