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Little fiscal impact forecast as lengthy mediation comes to fruition

The Portland City Council gave its assent Wednesday morning to an amendment that the director of the Portland Water Bureau said should solve a long-running dispute with the city of Tualatin and the Tualatin Valley Water District over a portion of Portland's wholesale water sales.

The City Council voted unanimously to approve the amendment, which the Tualatin City Council agreed to last month and the Tualatin Valley Water District's board of directors approved last fall.

“This is really important to keep the solid relationship with wholesale customers and sell them more water,” Portland Mayor Charlie Hales said.

Commissioner Nick Fish and bureau Director Mike Stuhr briefed the Portland City Council on the amendment at its March 2 public meeting; the amendment seeks to clear up a disagreement between the PWB and its customers regarding sales of interruptible water.

Portland allows wholesale customers to order interruptible water — which is not guaranteed, unlike most water sold by the PWB — at a reduced rate during the summer months. That interruptible supply can give customers such as Tualatin and the TVWD an inexpensive way to supplement their available water for residents and businesses at times of the year when water usage peaks.

Fish said at the March 2 meeting that interruptible water represents a very small amount of the PWB's total sales. About 97 to 98 percent of the water the bureau sells is guaranteed, he estimated.

“The matter before us actually has a nominal value, but the upside to the city and to our customers is that it opens the door for us to sell more water to TVWD, and if we sell more water, we generate more revenue,” Fish explained.

Stuhr told the council, “Selling more water is an extremely good thing. And that's the purpose of interruptible water. We wanted to make it possible to sell interruptible water when it worked for us and it worked for them.”

The dispute began in 2013 when Tualatin and the TVWD objected to new rates and restrictions Portland placed on summer-interruptible water. The parties went to mediation, which Fish and Stuhr said led to the amendment being crafted as a mutually agreeable solution.

“I think it's important to note that, yes, it took us two years to get to this point, but the reason it took two years is you have, essentially, three utilities who all care very much about their ratepayers,” Stuhr said. “And so we each, in our own way, tried to do the best we could for the ratepayers.”

Both Fish and Stuhr downplayed any tension between the utilities. Fish called the TVWD “one of our most important wholesale customers,” while Stuhr called the dispute “a legitimate disagreement.”

“These folks are more than customers,” he said. “They're really our partners.”

Back in September, TVWD Chief Executive Officer Mark Knudson told the district's board that the amendment is actually projected to result in a small cost savings to TVWD.

Stuhr said last week that the difference between the PWB's initial position and the compromise amendment is just $33,000 over three years, or 0.007 percent of its total water sales.

“It's a very, very small disagreement, and I think very worth it for our relationship with our customers,” Stuhr said.

He added, “I think this solves our dispute, and it will allow us in the end to sell more water, which is good for our ratepayers.”

The water contract between Portland and Tualatin is set to automatically renew for five years at the end of June.

Stuhr said the PWB hopes to continue its relationship with Tualatin and the TVWD for decades to come.

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