Twin Cities Move Forward With Agreement Portioning 8 Million Daily Gallons of TransAlta Water Rights

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The cities of Centralia and Chehalis have agreed to portion out a fraction of TransAtla’s senior water rights and submit a joint application to the state Department of Ecology for rights to groundwater from the Centralia Outwash Gravel Aquifer, located near the confluence of the Chehalis and Skookumchuck rivers.

The acquisition of rights, conducted by way of purchasing mitigation credits heavily discounted from current market rates, would provide the Twin Cities an additional 8 million gallons per day (MGD) of water withdrawal, effectively softening the blow of growth over the next 50 years, if not longer.

“There’s all kinds of examples out there where cities have gotten mitigation proposals and gotten some good water rights, but this one is just exceptional in terms of the opportunity here for them to have lots of water,” said Tom McDonald, a 35-year water resources attorney with Cascadia Law Group, which consulted the City of Chehalis on the agreement.

Under the agreement, if the application is approved by the Department of Ecology, Chehalis would receive 3 MGD of water and Centralia would receive the other 5 GMD of usage. Through their joint application, both are requesting separate permits for water use.

In a Wednesday email to The Chronicle, Centralia Public Works Director Kim Ashmore said he believes TransAlta’s Centralia coal plant is currently permitted to use upwards of 25 MGD from the Skookumchuck River, which equates to about 9.125 billion gallons per year.

Last year, as part of TransAlta’s divestment from fossil fuels, it retired one of its burners. Its second and final unit is set to go offline in 2025.

Centralia City Manager Rob Hill said after the council’s meeting Tuesday night that it “helped everybody by bringing Chehalis in” as a regional partner for the acquisition. As an applicant, both cities will need to demonstrate that they can use those available water rights, and having the Mint City in the mix only strengthens Centralia’s application.

Ratepayers of each city will not subsidize the other, the agreement stipulates.

“It’s very unusual for a municipality to get an opportunity like this. We feel we would be remiss if we didn’t take advantage of that because there’s just not much water available,” Hill said. “We are very, very excited. Very happy to have this partnership with the City of Chehalis in securing this. It’s very good for both cities.”

In addition to covering future growth in the cities’ limits and urban growth area, the prospect of more water rights also bodes well for developing business in the Twin Cities and could be a drawing factor for port tenants.

Despite rosy ambitions, both cities are expected to accrue heavy financial costs from the acquisition.

The cities will share in footing the cost for rights at a rate expected to be between $1,500 and $1,800 an acre foot, according to Chehalis city documents, which is a steal at about half the market rate for consumptive water rights.

Chehalis estimates this would cost its city anywhere from $4.5 million to $5.4 million for the additional 3 MGD, which could be covered by a 40-year, low-interest loan from the federal government repaid by the city’s water fund.



According to Centralia city documents, acquisition of the 5 MGD rights would cost it at least $6.3 million.

It’s unclear currently how this would affect ratepayers in both cities.

Both cities will also likely need to build new infrastructure, including a new well field at the aquifer and infrastructure to pump the water from Centralia to Chehalis.

On a prorated basis, the two cities will also share the cost of filing and consultation for the project.

Details will be made more clear through a cost-share agreement, due to be developed over the next year by both cities and finished by August 2022.

Both city leaders and elected officials appear excited and satisfied with the terms of the agreement and the possibility of acquiring water rights at a low cost from what was once Lewis County’s largest employer.

Chehalis City Manager Jill Anderson called the agreement at a Monday meeting of the council a “once-in-a-lifetime opportunity,” and Mayor Dennis Dawes said it was a “great opportunity.”

“Water is the liquid gold,” Dawes said. “Something, every so often, becomes the liquid gold. And now it’s water. Five years, seven years from now, it’s going to be something else that municipal governments and county governments need. It just goes and rolls, from one thing to another.”

Prior to the vote, Councilor Jerry Lord said he’d like to see the city get an earlier look at the infrastructural costs and a clearer picture of what the water would cost.

“Once this deal’s done, and I agree the deal needs to be done — but we also need to know how much more it’s going to cost the city to have this water. I’m for it, I just want to know what it’s going to cost,” Lord said.

Quoting an old adage prior to the vote, Councilor Bob Spahr said, “‘Whiskey’s for drinking, water’s for fighting.’ So, let’s end the fight.”

Both councils unanimously passed the agreement.