Avista: relicensing terms ‘onerous’

Power bills for Avista ratepayers stand to rise if federal regulators and American Indian tribes follow through on demands that the Spokane utility pay for numerous conservation and cultural projects on Lake Coeur d’Alene.

It’s a scenario wrapped up in the company’s complicated, years-long attempt to relicense its Spokane River dams. That effort took another turn this week as government agencies, environmental groups and tribes, in filings with the Federal Energy Regulatory Commission, urged changes to the way Avista manages the lake’s water level, accounts for habitat destruction and alters river flow.

Of particular concern to Avista are conditions demanded by the U.S. Department of the Interior and the Coeur d’Alene Tribe.

“On the face of it, Interior’s conditions to us appear to be onerous,” said Bruce Howard, Spokane River license manager for Avista. “They go beyond what we think are reasonable.”

Complying with the conditions, Howard said, would cost significantly more than the $85 million Avista proposed paying over the next 30 years, and it’s a cost that would ultimately be borne by ratepayers.

Avista, he said, is being asked to develop numerous plans, hire consultants, and conduct work to fix and pay for future erosion problems on the lake caused primarily by boat wakes and wind-driven waves. Filings also ask Avista to monitor water quality and identify, study and protect Native American cultural sites around the popular lake.

Other demands include a company-financed fish-restoration plan that envisions the building of five ponds where tribal members can fish for cutthroat trout until the tribe determines that the lake’s fish population has been restored.

The tribe has significant pull in the relicensing. Avista, its ratepayers and investors have reaped profits, cheap electricity and dividends based in part on storing water for free on reservation lands.

That dynamic is changing, and during this relicensing effort, tribes have emerged as an important player.

Howard said Avista knows it must reach some sort of financial accord with the tribes to continue business as usual. But the company is hesitant to accept too much responsibility for issues that are not necessarily of its own making or benefit, such as the wake from boats or exploitation and damage to cultural sites, he said.

The differences between various interest groups are so sharp regarding the lake that the company wants to separately relicense its Post Falls dam so the issues don’t interfere with the relicensing process for its other dams on the Spokane River.

Workers finished building the dam in 1906, about nine miles downstream of Lake Coeur d’Alene. It can generate about 14 megawatts of electricity – enough to serve about 9,000 homes.

The dam’s real significance, however, is maintaining the water level of Lake Coeur d’Alene – a critical component of North Idaho life that affects tourism, real estate and recreation.

The last time Avista relicensed its run of five dams along the Spokane River, in the 1970s, the Coeur d’Alene Tribe sought payment or mitigation regarding lands unnaturally submerged beneath the lake because of the dam.

Now the tribes and the federal Interior Department are sharply critical of Avista’s attempts to separately relicense the Post Falls Dam from the other four.

In a filing to FERC, the Interior Department wrote that the Post Falls project is a $1.44 million financial drag on Avista each year. The other four dams net the firm $19.4 million. Operated together as one unit, however, the river dams provide an $18 million benefit.

By cleaving the Post Falls Dam from the others, the Interior Department and tribes argue, Avista is attempting to lessen or perhaps even erase how much money it should pay to the tribe for storage of water on reservation lands.

The issue is a delicate one for Avista. The company is on record acknowledging that it has a responsibility and desire to compensate the tribe.

The question is how much. The tribe hasn’t yet released a dollar demand.

Other government groups, including cities and towns, the U.S. Forest Service and various Idaho and Washington state agencies have submitted recommendations and conditions in the relicensing effort. So have environmental groups such as the Sierra Club and The Lands Council.

But it is the tribal and Interior Department demands that are Avista’s major hurdles, Howard said.

The company’s license to generate electricity from its river dams expires next summer. The issues will likely end up in front of administrative law judges or perhaps in federal court.