The Pend Oreille County Public Utility District has agreed to pay the Kalispel Tribe of Indians a minimum of $200,000 worth of wholesale electricity annually for flooding reservation lands under its Box Canyon Dam reservoir. The payments have been in negotiation since 2005 as part of the dams 50-year renewed federal license.


The PUD will pay the tribe a calculated share of the power produced by its Box Canyon Dam each year, says Jim Scheel, the districts director of hydro operations and power supply. The base amount will be raised by $15,000 every five years, he says.


Each year, the tribe can choose one of four options for payment, once a calculation of the incremental value of the power is made. It can use the power directly, market it to other wholesale users, have the PUD market it on the tribes behalf, or sell it back to the PUD at the cost of production.


The agreement will become effective once the Federal Energy Regulatory Commission approves it, which is expected to occur within the next few months, Scheel says.


The agreement defines the tribes share of the Box Canyon project and delineates how to translate it into megawatt-hours produced by the dam, Scheel adds.


He says it establishes that the Kalispels interest in the reservoir is established as about 4.6 percent of the power generated by the project, he says.


Mark Cauchy, the PUDs director of regulatory and environmental affairs, says issues related to the boundaries of the reservoir were litigated in federal court from about 1980 until 1998, when FERC required the PUD to amend its hydropower license to include interim payments to the tribe, as required under a section of the Federal Power Act.


We came to an agreement on an annual payment to the tribe just from 1998 to 2005, just to get us to that point, Cauchy says.


Over that period of time, the PUD has been paying the tribe $125,000 a year plus an inflation adjustment. The most recent payment was about $159,000, he says.


Cauchy says that when FERC issued a new license for Box Canyon Dam in 2005, it directed the PUD to negotiate a reasonable fee for use of 493 acres of tribal land flooded by the reservoir behind the dam.


From that base agreement, the value will be calculated annually through a complex formula.


Scheel says that since the PUD is preparing to improve the dam extensively as part of the relicensing, the value of the agreement may not exceed the $200,000 floor for several years. Thats because the cost of production will increase significantly during the years that the dam improvements are made.


This year, Scheel says, $200,000 worth of power would be the equivalent of about 8,000 to 9,000 megawatt-hours. Scheel could not say how much power the tribe currently uses annually, but it owns a gun case manufacturing company, Kalispel Case Line, in Cusick, and is in the process of building a new wellness center, a new foster-care facility, and a new public-safety building on the reservation.