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Return to Previous PageTribes To Acquire Majority Interest

By David McMechan, News Editor

Portland General Electric and the Warm Springs tribes are working on an agreement that would result, eventually, in the tribes acquiring more than half ownership of the Pelton-Round Butte hydroelectric facilities.

Under the proposed agreement, the tribes would acquire – through a gradual purchase from PGE – slightly more than 50 percent ownership in the dams, currently owned and operated exclusively by PGE.

The tentative agreement between the tribes and POE would be for a term of up to 50 years. The purchase arrangement would be phased in during that period.

It would be sometime during the second half of the term – or more than 25 years later – that the tribes would reach an ownership interest greater than 50 percent, said Mark Fryburg, a PGE spokesman.

PGE has been interested in doing something that would be good for our customers, for the tribes, and for the environment,” Fryburg said. “This agreement would accomplish those three things.”

The expectation is that power rates for PGE’s customers would not increase under the agreement, Fryburg said.

The joint ownership/operation agreement between PGE and the tribes could also help in the restoration of migrating fish runs above the dams, a long-term goal of the tribes and PGE.

With the two entities focusing on this issue, the likelihood of re-establishing the historic fish runs increases, he said.

The Warm Springs tribes would benefit through this arrangement, as they would acquire an ownership interest in the hydro facilities.

The tribes currently own and operate just the Re-regulating dam.

The Pelton-Round Butte dams constitute about one-quarter of PGE’s overall power generation. The company serves over 700,000 customers with electricity.

Under an existing arrangement, the tribes receive payment from PGE of between one-third to one-half of the value of the energy produced by the Pelton and Round Butte dams on an annual basis. Last year, this payment amounted to more than $10 million.

PGE constructed the Pelton and Round Butte hvdro-facilities in the 1950s and ’60s.

Pelton dam, which created Lake Simtustus, cost about $21 to build in 1958; and Round Butte dam, which created Lake Billy Chinook cost about $60 million to construct in 1964.

The original federal license to operate the project expires in about two years. Both PGE and the tribes last month submitted application for the future license, which will last for a term of up to 50 years.

When the two parties reach a final agreement, they will likely resubmit a joint application the Federal Energy Regulatory Commission, the licensing agency.

Jim Manion, general manager of Warm Springs Power Enterprises, commented that tribes and PGE are close to finalizing a proposed agreement.

The issue would then be voted on by general tribal membership, and would also considered by the Oregon Public Utilities Commission.

He said an agreement could be finalized March or April. However, the timeline is not entirely in the control of PGE and the tribes, as the utility commission sets its own schedule.

Madras, OR
January 5, 2000


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