Tom Karier: Time for a new Columbia River treaty

Electric ratepayers in Washington and other Northwest states are paying millions of dollars per year to the provincial government of British Columbia in exchange for almost nothing. These annual payments by dozens of Northwest public utilities, including Inland Power and Light and Modern Electric Water Co in our area, as well as Seattle City Light, are used to fund services for Canadian citizens of British Columbia.

The United States can terminate these payments, but under the terms of the Columbia River Treaty must give 10 years’ notice. Granted the Trump administration appears a little distracted, but the U.S. State Department can do this today, which would stop payments by 2030. Every year they delay costs Northwest ratepayers an additional $150 million to $300 million, depending on the price of electricity.

How did we get into this fix? It started with an innovative treaty in the 1960s. The United States paid Canada to build three dams on the Columbia River that provide flood control and augment power production downstream in the U.S. For many decades the Columbia River Treaty provided significant benefits to both countries in the form of higher power generation and lower flood risk. And during that time the United States paid about 30% over the original construction costs of the dams.

Current treaty payments in the form of annual power deliveries are even more valuable than their simple market price reflects. Canada receives valuable carbon-free hydropower, which is flexible enough to ramp up during peak demand and back up significant amounts of additional carbon-free wind and solar power.

The original authors of the treaty never expected it to last indefinitely and allowed either country to terminate the treaty beginning in 2024 with 10 years’ notice. That’s when the U.S. first missed the boat. If the U.S. had submitted a termination notice in 2014 those payments would have ended in 2024 instead of 2030, which is the earliest possible date now.

A broad coalition of Northwest entities supported a recommendation to the U.S. State Department in 2013 that they either reach a new agreement with Canada by 2015 or pursue other options. The State Department did neither.

The first excuse was that they needed time to consider the recommendation from the Northwest. It took the State Department almost five years to consider it before starting formal negotiations with Canada. And that recommendation was only six pages long!

Then the State Department asked for time to negotiate a new treaty with Canada. Two years later they have nothing to report.

State Department officials will claim they don’t want to “jeopardize” the negotiations by terminating the old treaty. But, in fact, the opposite is true. There will be no new agreement if the United States doesn’t terminate the old treaty. Why would Canada willingly give up hundreds of millions of dollars a year for which they provide essentially nothing in return? The truth is that Canada will not sign a new agreement until the U.S. terminates the old one. The negotiations need to start with a blank slate.

By delaying a new agreement, the State Department is not only costing the Northwest valuable carbon-free power, it is also jeopardizing the health and safety of U.S. citizens who live in floodplains along the Columbia River. This is because current provisions of the treaty that obligate Canada to reduce flood risks in the United States expire in 2024. Without a new agreement addressing this issue, the State Department places Northwest citizens in jeopardy.

The State Department delays have an environmental cost as well. Because the original treaty did not directly address ecosystem impacts and salmon survival, we need a new agreement to provide essential operations for salmon. We take this responsibility seriously in the Northwest.

Waiting indefinitely for Canada to act against its own self-interest is a losing strategy; it costs the Northwest millions of dollars of carbon-free power a year, jeopardizes the health and safety of U.S. citizens and does nothing to help salmon recovery.

The lead negotiator for the Columbia River Treaty, Jill Smail, needs to provide notice to Canada today that the U.S. will terminate the old treaty in 2030 and start in earnest to find a replacement that benefits both countries. That replacement, as described in the 2013 recommendation from the Northwest, will manage flood risks, maximize clean energy production, and protect and restore ecosystem functions.

Tom Karier is a professor of economics at Eastern Washington University and the author of “Intellectual Capital.” He was a Washington state representative on the Northwest Power and Conservation Council for 20 years and worked on treaty issues for Washington governors from 2012 to 2018. The opinions expressed in this article are his own and do not necessarily represent Washington state or the governors.