Guarantees county residents cheap power
By Robert Chaney, Sr.
NEWPORT – Pend Oreille Public Utility District No. 1 took steps on Tuesday, June 6, to guarantee that county residents will continue to have inexpensive power for many years to come – the board of commissioners signed a memorandum of agreerment with Seattle City Light concerning power from Boundary Dam.
Boundary, which is owned by the City of Seattle, will go through the relicensing procedure in 2011; the PUD through the memorandum, has agreed to support Seattle’s relicensing effort in exchange for a guarantee of 48 megawatts of power from the Boundary project.
This is very important to the residents of this county,” said PUD General Manager Larry Weis. “Without this agreement in place low cost power would not be possible.”
In October1953, the City of Seattle filed with the Federal Energy Regulatory Commission (FERC) an application for a preliminary permit for a major hydroelectric development on the Pend Oreille River designated as the Boundary Project. A preliminary permit was issued in 1954.
In 1956, SCL executed a Power Purchase Contract with PUD to purchase surplus power from the Box Canyon Project through August 1, 2005.
In July 1957, PUD filed an application for the license of a competing project on the Pend Oreille River at Z Canyon but FERC rejected such application because the City already held a prelinimary permit for the Boundary Project in the same vicinity.
Soon thereafter, SCL filed the application for a license for the construction and operation of the Boundary Project.
Later that year, PUD filed a petition to intervene in the Boundary Project together with a competing plan for a dam and power plant at the Z Canyon site. FERC permitted this intervention.
Finally, in March 1961 FERC issued a 50-year license to SCL for the Boundary Project. The order was ultimately modified in September1961 to add the following provision:
Article 49. The Licensee shall assign 48,000 kilowatts to the PUD from the Boundary Project at the PUD’s system load factor, any part or all of which shall be available to the PUD at cost upon two years’ notice by the PUD to meet the load requirements of present or potential consumers (not including purchases for resale) within the PUD’s service area; provided that the amount of power made available by this article shall be reduced by the ampunt of any power recaptured by the PUD under the Box Canyon Contract with Seattle and sold for use outside Pend Oreille County.
In September 1969, PUD and SCL executed an agreement to settle several issues between the parties (“Box Canyon Settlement Agreement”). This Agreement also tied the Boundary obligation to the Box Canyon contract so that PUD’s withdrawal rights under both could be coordinated and predictable for both parties.
Due to the moderate level of loads in PUD’s service area, there was no request made to SCL for Boundary Withdrawals until 1983. At that time, PUD sent the required advance Notice of Withdrawal of Boundary Power in 1985 for the construction of a paper mill and fiber mill plant at Usk. The parties began to discuss an appropriate methodology for determining the “at cost” power price.
Power deliveries pursuant to Article 49 finally began at 24 MW in 1989, after multiple years of interim agreements and a final decision by FERC on the application and interpretation of the license assignment. The Settlement Agreement for the Article 49 Power Assignment to Pend Oreille Public Utility District No.1 by the City of Seattle was executed in 1992. It extends through the term of the current Boundary License, July 1, 2011.
Article 49 deliveries to PUD increased to 28 MW in 1992, to 32 MW in 1995, and are expected to increase to 36, in August 2000 and finally to the full 48 MW in August 2005, concurrent with the expiration of the Box Canyon Power Purchase Contract.
In the last five years, PUD has taken an average of 243,601 MWh of Boundary Project power each year, for which it paid SCL on average $704,861 per year.
June 14, 2000