Avista to pay tribe for land use

WEDNESDAY, DEC. 17, 2008, 12:01 A.M.

Lawsuit said utility trespassed by storing water on reservation

Avista Corp. will pay as much as $168 million over the next half-century to compensate the Coeur d’Alene Tribe for storing water for hydropower generation on the tribe’s submerged land in Lake Coeur d’Alene.

The storage allows Avista to regulate the flow of water through the utility’s six Spokane River dams.

“This agreement finally compensates the tribe for Avista’s use of tribal lands to bring power generation to the region at the turn of the 20th century,” Chief Allan, chairman of the Coeur d’Alene Tribe, said Tuesday in a prepared statement.

The settlement ends a decade of negotiations.

In 1906, Avista built the Post Falls Dam, which controls water levels on Lake Coeur d’Alene. The utility, formerly known as Washington Water Power, got its corporate start using hydropower operations on the Spokane River, including the Post Falls Dam.

In a lawsuit, the tribe said Avista trespassed by storing water on submerged land on the Coeur d’Alene Indian Reservation without tribal authorization. The Coeur d’Alene Tribe subsidized cheap power to Avista’s ratepayers while unnaturally high lake levels harmed native fisheries, eroded shorelines and exposed prehistoric archeological sites to looting, according to the suit.

Tuesday’s agreement settles past and future water storage issues. Avista will pay the Coeur d’Alene Tribe $39 million over three years as compensation for past storage. The utility will also pay the tribe $400,000 a year for the next 20 years, followed by annual payments of $700,000 for the remaining term of the dams’ next federal license.

Avista will also pay $100 million into a trust fund over approximately 50 years. The money will be used to halt shoreline erosion from fluctuating lake levels; protect tribal artifacts and cultural sites; restore damaged wetlands; monitor water quality; and control aquatic weeds such as Eurasian milfoil.

In return, the Coeur d’Alene Tribe will support a 50-year renewal of the federal license for Avista’s Spokane River dams. The tribe will also endorse an elevation of 2,128 feet on Lake Coeur d’Alene during the summer months, which is considered ideal for boating.

“The good news for people who use the lake, or who own property there, is that there will be very little – if any – change,” Avista spokesman Hugh Imhof said.

Allan said the tribe’s goal was to strike a balance between “the health and well-being of the lake” and the needs of the region’s economy, including tourism and power generation. Built between 1890 and 1922, the dams produce about 105 megawatts of electricity, or roughly 10 percent of Avista’s electrical output.

The settlement represents a major step toward renewal of the dams’ license, according to Imhof. Payments to the tribe will begin after the Federal Energy Regulatory Commission issues the new license, which could happen next year.

Avista’s customers will pick up the cost of the settlement. However, the cost to individual ratepayers will be negligible, because the payments to the tribe will be spread over a long period, Imhof said.

“The rate impact is going to be very small,” he said. “Our preliminary estimate is 1 percent” on customers’ monthly bills.

Contact Becky Kramer at (208) 765-7122 or by e-mail at

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