SPOKANE — The Washington Court of Appeals ruled Tuesday that the Grant County PUD must provide hydropower to the Chelan County PUD in order to repay generation losses caused by proximity of Wanapum Dam.
The three-judge panel agreed with a finding from a Kittitas County judge in the Chelan County utility's favor, saying "hydropower for hydropower" is required under an agreement between the two agencies dating to 1955.
In 1955, when the Grant County PUD proposed the construction of two hydroelectric dams, it was noted that the upper dam, Wanapum Dam, would reduce the generation capacity at Chelan County PUD’s Rock Island Dam. In order to achieve approval for construction of the two dams, Grant County PUD agreed to compensate Chelan County PUD for both financial loss and loss of power. The agreement became referred to as the “1955 Agreement.”
The Puget Sound Power & Light Company co-owned the Rock Island Dam with Chelan County PUD until the PUD purchased its interest in 1956.
In 2019, the Grant County PUD began delivering power without classifying it as hydropower from Wanapum Dam and instead identifying it as “undifferentiated imported power from Grant County,” as part of a restructure, according to court documents.
“Back then, when we made that decision, hydropower was gaining value over unspecified source power because of its clean attributes,” said Grant County PUD public affairs officer Christine Pratt. “We wanted to get the most we could for the clean hydropower we were generating. So we decided to use a power broker, to sell our hydropower to a broker in exchange for the amount of unspecified power we needed to cover our load for the county.”
This change was what prompted the Chelan County PUD to file suit against the Grant County PUD in May 2020.
The Chelan County PUD argued that the power Grant County PUD was contractually required to provide must be hydropower. The Grant County PUD disagreed and said it had never exclusively been giving hydropower.
The Grant County PUD filed a counterclaim for “unjust enrichment” in October 2022, claiming that it had given too much power to the Chelan County PUD in 2015 and only been partially reimbursed. The counterclaim was dismissed outright.
The Court of Appeals decision finds the agreements never specified hydropower, “the context and circumstances surrounding the agreements made it clear that the only power being discussed was hydropower,” according to court documents.
