Portland General Electric (PGE), a utility based in Oregon, US and the Confederated Tribes of the Warm Springs have reached an agreement on the sale of two hydro dams forming the 408MW Pelton Round Butte hydroelectric complex near Madras. The Warm Springs Tribal Council has also announ-ced that it has recommended approval of the agreement and set a referendum election for the tribe’s 2074 voting members for 28 March 2000. The deal will mark the first time PGE has sold any generating units to an indigenous tribe.

PGE’s federal licence to operate the dams expires in two years when the Federal Energy Regulatory Commission (FERC) will re-issue a 30-year or 50-year licence to run the dams. The agreement will allow PGE and the tribes to apply for a joint operating licence from FERC, instead of the competing licence applications they filed last year. The partnership agreement is also subject to approval by the Oregon Public Utility Commission.

Under the agreement, the tribes can purchase a part of the project from PGE over a proposed 50-year licence period. On 31 December 2001 the tribes can acquire one-third interest. Twenty years later, they have the option to increase their share to 49.99%. The tribes could also elect to increase their ownership to 50.01% by 2037 and can purchase all shares at net book value.

In return, the proposal means that PGE’s current annual rent payments of US$10M to the tribes for use of their lands will cease on 31 December 2001. In lieu of those payments, the tribes can earn revenues by marketing their share of the power output from the project. PGE could continue to operate the project, but it would be managed by a joint operating committee of PGE and the tribes.

Pelton Round Butte is the largest hydro project in the state of Oregon.