The three Mid-Columbia River public utility districts, Chelan, Grant and Douglas, approved a settlement agreement to resolve ongoing litigation with the U.S. government. The litigation, which began in 2024, was related to the Mid-Columbia PUDs’ collective share of the Canadian Entitlement and the benefits of water management under the Columbia River Treaty.
Under the new agreement, the Mid-Columbia PUDs will pay for 25% of the reduced Canadian Entitlement (CE) obligations that the United States and Canada announced in the July 2024 Agreement in Principle (AIP). The PUDs also agreed to make a one-time payment totaling $29.9 million to cover the unpaid contributions dating back to September 2024 when payments were suspended during the dispute through May 2026. The PUDs will pay an additional amount based on the same calculation method for the period between June 2026 to when the agreement becomes effective. As part of the settlement agreement, the parties agreed to improve water and energy planning, information sharing, and energy emergency operations.
In the 1960s, the United States and Canada agreed to share the downstream power benefits resulting from improved downstream flows from Canadian storage dams under the Columbia River Treaty. The Mid-Columbia PUDs were allowed to use the improved flows in exchange for supplying the United States with 27.5% of the power the U.S. was obligated to return to Canada under the CE. The rest was provided by the Bonneville Power Administration (BPA).
Kirk Hudson, Chelan PUD general manager, Gary Ivory, Douglas PUD general manager, and John Mertlich, Grant PUD general manager, said in a joint statement:
“Bringing this matter to a conclusion is a positive step for the Mid-Columbia region. While the legal process was necessary to resolve important questions, we are pleased to see the parties reach an agreement that allows us to move forward. Chelan, Douglas and Grant PUDs have a long history of working collaboratively on issues that affect our customers, our communities and the Columbia River system. Just as importantly, a strong and constructive relationship between the Mid-Columbia PUDs and the Bonneville Power Administration is essential to the long-term interests of our region.”
The Mid-Columbia PUDs initiated litigation in June 2024, asking the U.S. government to explain the methodology it would use to determine how much benefit their hydropower projects would receive under the existing Treaty along with agreements between the PUDs and the U.S. government expired in September 2024. In July 2024, the U.S. government announced the AIP with Canada on the future of the Columbia River Treaty through 2044.The AIP reduces the CE obligations going forward.
Amidst uncertainty about their future CE obligations, the Mid-Columbia PUDs stopped contributing to the CE in September 2024 when their existing contracts requiring those payments expired. The U.S. government responded by filing counterclaims, asserting that the PUDs could not use Treaty-related stream flows without contributing to the CE. The case was set to be heard in January 2027.