Tacoma, WA - Tuesday, December 16, 2008

Mason Morisset, an attorney for the tribe, told The News Tribune that talks between the parties are “cordial” and “productive,” but they are “not there yet.”

Dam deal close after most of a century-Skokomish, Tacoma Power might settle

JASON HAGEY; jason.hagey@thenewstribune.com

Last updated: December 16th, 2008 12:38 AM (PST)

A monumental battle between Tacoma Power and the Skokomish Indian Tribe over a pair of dams the utility built on traditional tribal grounds on the Olympic Peninsula in the 1920s may be near an end.

Although both sides cautioned there is no deal yet, the Tacoma Public Utilities board of directors gave its approval last week to a motion that authorizes Director Bill Gaines to enter into a settlement agreement with the tribe. The City Council is scheduled to consider it tonight.

The proposal calls for the utility to pay the tribe $12.6 million in upfront cash and transfer 1,140 acres of Tacoma Power property to the tribe in exchange for dropping all claims left over from a $5.6 billion lawsuit.

Tacoma Power also would give the tribe 300 acres of tidelands, and make annual payments equal to 7.25 percent of the value of electricity produced by Cushman Dam No. 2 for 40 years. For the first 20 years, the payments could not be less than $300,000 or more than $500,000 per year; for the 20 years after that, they’d fall between $625,000 and $950,000 per year.

Officials hope to have a completed settlement soon, but the city and tribe have had a rocky relationship for years, and Tacoma Power officials were nervous that any publicity about the possible settlement might cause it to unravel.

The settlement is contingent on Tacoma Power receiving a 40-year license from the federal government to operate the hydroelectric project. The city’s attempt to relicense the project dates to 1974, when the original license expired. The new license has been held up in a legal battle before federal regulators and in the courts.

Several other federal agencies also need to sign on before it’s complete. “It’s not a done deal,” said Pat McCarty, a generation manager with Tacoma Power.

Mason Morisset, an attorney for the tribe, told The News Tribune that talks between the parties are “cordial” and “productive,” but they are “not there yet.”

The Cushman Project was Tacoma’s first major hydroelectric project, but the Skokomish Tribe has opposed it from the start. The first dam, completed in 1926, created Lake Cushman, and the second dam, completed four years later, created the smaller Lake Kokanee.

Electricity from the dams is carried 40 miles to Tacoma, and crosses the Narrows on cables strung near the Narrows bridge. The project produces enough power to serve approximately 25,000 homes.

A crowd of 5,000 gathered at the base of the Tacoma towers in 1926 to celebrate the completion, and President Calvin Coolidge pressed a telegraph button in Washington, D.C., that started current flowing through the lines, according to newspaper accounts.

The tribe filed its first lawsuit over the project in 1930, maintaining that by diverting the Skokomish River, the project would ruin the salmon fishery and the tribe’s fishing rights.

By the early 1990s, the tribe was threatening to push for the removal of the dams. A few years later, the city said it might have to shut down operations because the terms of a new license made it too expensive.

The tribe filed a new lawsuit against Tacoma and the federal government in 1999, claiming the Cushman project wiped out treaty-protected fishing and hunting grounds, and had unlawfully enriched the City of Tacoma for decades.

Cushman Dam No. 2 has at times either completely or nearly completely diverted the flow of the North Fork of the Skokomish River.

The lawsuit claimed $5.6 billion in damages dating to the construction of the dams.

Tacoma Power officials insisted they broke no laws and complied with the operating license. The city succeeded in getting the claims dropped, and the case appeared dead in 2006 when the U.S. Supreme Court refused to hear the tribe’s appeal.

But the tribe revived the case by repackaging it under federal common law claims in federal district court. The two sides then agreed to enter into mediation.

Laura Fox, a TPU board member, said the dollar amounts in the possible settlement are large, but they aren’t nearly as daunting as either the original $5.8 billion figure or the possibility of losing the electricity from the project.

“We definitely all feel a sigh of relief,” Fox said. “It’s really pretty amazing.”

Jason Hagey: 253-597-8542