EWEB's bird in hand.

Byline: The Register-Guard

The Grant County Public Utility District has been described as Kuwait on the Columbia: The tiny utility holds licenses for two dams that generate enough electricity to light Seattle. That casts PacifiCorp and the Yakama Nation in the role of Iraq, because they've teamed up in an attempt to compete against Grant PUD when the licenses come up for renewal in 2005.

The Eugene Water & Electric Board must decide which combatant to support. It's tempting to recommend that EWEB cast its lot with PacifiCorp and the Indians, which have combined to form the Yakama Hydroelectric Project LLC. Yakama Hydroelectric is offering EWEB a long-term electric sales contract that could be worth as much as $178 million more than the deal Grant PUD has on the table. But Grant and EWEB have a long-standing relationship, and by breaking it EWEB would risk coming out of the relicensing fight empty-handed.

EWEB is among 12 Northwest utilities that provided financial backing to Grant PUD when it built the Wanapum and Priest River dams in the early 1960s. In exchange, the utilities received long-term contracts for power at cost. EWEB currently receives 20 megawatts of electricity from Grant, which is about 7 percent of its total requirements. The price is $10 per megawatt hour, less than half the price charged by the Bonneville Power Administration. Mixing the low-cost Grant PUD power with electricity from other sources has kept EWEB's rates lower than they would otherwise have been.

Grant expects to renew the licenses on its two dams, and is willing to offer new power contracts to its partners. The amount of power available under the contracts will decline, however, as Grant's own requirements grow.

Yakama Hydroelectric is willing to offer EWEB as much power as it receives now for the life of the licenses. The partnership estimates that the guarantee would be worth between $98 million and $178 million to EWEB over a 50-year period, depending on the price of replacement power and the rate at which Grant would reduce future deliveries in favor of its own customers.

It's strange to find potential power suppliers fighting for the right to sell electricity to EWEB at half price. Too bad it doesn't happen more often.

But both Grant and Yakama Hydroelectric want EWEB's support, because the Federal Energy Regulatory Commission evaluates dam license applications partly on the basis of whether they provide regional benefits. If Yakama Hydroelectric can peel away the utilities with which Grant currently has contracts, it will be able to say to FERC that the region's utilities judge its proposal to be most beneficial.

And indeed, Yakama Hydroelectric's proposal would be best for EWEB - but only if it succeeded in wresting the licenses away from Grant. FERC has never refused to renew a dam operator's license. If EWEB casts its lot with Yakama Hydroelectric and FERC does what it has always done before, EWEB would emerge from the relicensing process with none of the low-cost power from the two dams.

Grant wants a commitment from EWEB by the end of the year. The utility board will discuss the matter Tuesday. The board would be justified in asking Grant for more time to study Yakama Hydroelectric's license application. It would also be reasonable to ask Grant to set a limit on the rate at which its power deliveries would be reduced. But Kuwait seems likely to prevail over Iraq in this fight, and EWEB's customers will be best-served if the utility sides with the winner.