Bill allows City Light to arbitrate Boundary Dam fees.

Seattle City Light and Pend Oreille County each got something they wanted out of a bill that passed the Legislature this week, but it didn't come close to settling a two-year dispute between them.

Now, an arbitrator may decide how much Seattle should pay Pend Oreille County in an annual impact fee for its huge hydroelectric dam, Boundary Dam, which is located in the rural county.

The city has paid the county about $1 million annually for years, but now the cash-strapped county says it should get more. The city and county have been unable to agree on the fee since the old contract expired in 2008.

House Bill 2925, which still must be signed by Gov. Chris Gregoire before becoming law, originally would have forced Seattle to pay a set amount to Pend Oreille County based on a formula. Seattle fought that version of the bill, and the formula was removed.

The final bill did ensure that Pend Oreille County be paid for the two years during which the city and county have been negotiating. Seattle City Light hadn't paid since 2008, leaving the county struggling to make ends meet. City Light has since paid the county $1.6 million.

The two entities are still negotiating, but Pend Oreille County Commissioner Laura Merrill said they are no closer to an agreement.

"It feels further apart now than it did two weeks ago," she said. "We're worried that they're going to go ahead and call for arbitration anyway."

Seattle City Light has been pushing for arbitration since last fall. Pend Oreille County has refused, but the bill allows either party to call for it, as long as the party that calls for it pays for it, too.

Seattle City Light spokeswoman Suzanne Hartman said the city still hopes for a deal, but may call for arbitration if the law goes into effect and there is still no deal.

"We're still hopeful we can get an agreement, and that's our goal," she said.

Seattle relies on Boundary Dam for 60 percent of its hydroelectric power. It has been paying Pend Oreille County since the 1960s.

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