County to Seek New Cowlitz River Mitigation Contract With Tacoma Power

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For the first time in nearly two decades, Lewis County officials are gearing up to go back to the negotiating table with Tacoma Power in an effort to secure greater compensation for the assorted impacts of the Mayfield and Mossyrock hydroelectric dams on the Cowlitz River.

Those dams are owned by Tacoma Power. Last year, Lewis County received a total of $1,562,666 from the utility company. Those payments are doled out in quarterly installments and the 2017 sum represents a $500,000 increase over the sum paid out by the Tacoma Power to Lewis County in 2001, the first year the current contract was used for calculating the annual payment. Those annual adjustments are based on a convoluted formula that county officials all agreed is very confusing. However, the contract does clearly stipulate that the annual increase must be at least 2 percent, and no more than 5 percent.

An accounting issue earlier this year failed to include that two percent minimum, but on Thursday, Lewis County budget manager Becky Butler said that Tacoma Power has since agreed to correct that shortage.

“The City of Tacoma responded to the request yesterday afternoon and plans to submit a payment for the second quarter in the amount of $398,480.00, plus an additional $7,813.33 to adjust the first quarter payment to meet the same requirement of a minimum 2% increase,” explained Butler in an email.

Lewis County officials say that money is not the only compensation they are likely to seek during negotiations. According to Lewis County deputy prosecutor Ross Petersen, Tacoma Power appears to have failed to meet a number of other provisions set forth in the previous contract agreements. Those commitments include recreational mitigation for fishing and boating, emergency services, and a commitment to provide biologists for wildlife and habitat work, among others.

At a meeting on Tuesday, County Commissioners Edna Fund and Gary Stamper expressed their support for sending a letter to Tacoma Power informing them of the county’s intent to begin negotiations. The decision to start the clock on negotiations is one that Lewis County officials say they have been mulling over for years. 

But there’s a catch — Tacoma Power is not contractually obligated to make their quarterly payments while negotiations are underway. According to Petersen, Lewis County would ultimately be able to recoup that money once the process was completed, but he was unable to say how long that gap in payments might be due to the volatile nature of contract negotiations.

Commissioner Fund expressed concern about what the hiccup in income could mean for Lewis County’s already tight finances.

“They were pretty smart when they negotiated that they get to keep our income while we renegotiate it,” said Fund.

No matter what the cost is up front, Commissioner Stamper said he believes it is prudent to get the contract issue on the table sooner rather than later.

“In my opinion I think it’s probably time to venture out into the waters a bit to try to get this figured out,” said Stamper, who added that he believes there is far more to be gained in the long run than lost up front.

According to Lewis County officials, the compensation is intended to cover lost timber revenues, recreational opportunity, negative impacts on fish and wildlife, lost tax revenue, and other consequences of the two dams. The settlement agreement between Tacoma Power and Lewis County was originally reached in 1972 and then updated in 1987, and again in 2000. 

By that precedent Lewis County officials are overdue in their quest for updated compensation.

“First of all, looking at this it's shocking, frankly, that it’s been so long since we’ve looked at these. I mean there’s so much potential for East County here,” said Petersen.

Petersen admitted that the negotiation process will likely be uncomfortable for Lewis County, but he believes there is benefit to revisiting the contract.

“I think if we do enter negotiations it does suspend payments, but of course, having said that, we could recoup those funds once we reach an agreement,” said Petersen. “The amount that we would get would likely be higher just because this is so old.”



Arny Davis, Lewis County Treasurer, agreed with Petersen that Lewis County is likely to benefit from a new contract with Tacoma Power, and admitted that up-front financial concerns have prevented the county from seeking new terms in the past.

“I think it’s our fault that we haven’t held their feet to the fire over this stuff,” said Davis. “We were afraid to because when you do that it suspends payments.”

Turning to Fund and Stamper, Davis added, “This could have a big budget impact on you guys.” 

Warily, Fund replied, “Yeah, one way or the other.”

Davis advised that the county would be wise to ease into the negotiation process, including establishing firm parameters on the process in an effort to keep the process from dragging on and on without end.

“The negotiations are going to get intense, folks,” warned Davis. “I think there needs to be a shorter trigger on arbitration because I think that’s where you will end up.”

According to Petersen, Lewis County will face a difficult task trying to turn decades of Tacoma Power promises into real-time reality.

“We have a right to all the stuff in the contract, but being able to collect on it all, we might not be able to do that,” said Petersen. He said that the county will likely need to use a barrage of examples of Tacoma Power’s shortcomings in relation to the previous contracts in order to compel the big-city utility business to make serious concessions.

“Just for example, in working with emergency services I don’t see how Tacoma Power has followed through on some of their promises, like radio services, in East County,” said Petersen.

He and Stamper noted that the contract also calls for the construction of a marina at Riffe Lake and a trail system from one dam to the other, among other recreational improvements along the man-made reservoirs that flooded whole towns and blocked upstream access to salmon and other fish, among other consequence.

Petersen said he believes that the complete list of failures by Tacoma Power likely adds up to a breach of contract and that the county is likely due back pay for lost recreational opportunity and associated tax revenue.

“These things have dollar values and I believe they potentially violated this agreement,” said Petersen. “This is a big, big deal. And frankly, I think it would be in the county’s best deal to go for the package deal.”

However, Petersen acknowledged that some of the wording in the contract agreement is written such a way as to give Tacoma Power room to defer on a number of projects that require consensus between the utility company and Lewis County. 

Stamper said he would be very disappointed if Tacoma Power decided to backtrack on what he believed to be good faith, and legally binding, agreements.

“This would not paint a very good picture for them because it seems like they’ve been trying to extend an olive branch lately,” said Stamper.