The potential sale of Benton Rural Electric Association’s operations on the Yakama Nation Reservation to the tribe’s utility has some reservation residents protesting.
Because Benton REA is a member-owned cooperative, the $24 million deal has to be approved by a vote of its 11,400 members, among them about 1,200 living on the reservation.
“There’s a lot of people that don’t want it to go through,” said Larry Doman, a Harrah resident and Benton REA member. “It’s a good business deal for Benton REA to get rid of us at our expense.”
He’s angry that the proceeds from the sale will be used to pay off the utility’s debts — benefiting the remaining members — with no compensation for the reservation residents who have also been paying off their share of the cooperative’s infrastructure loans.
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“They are taking our $24 million and paying off the loans on our backs while we get nothing for it,” Doman said.
That’s been a common concern at community meetings, but it’s a misunderstanding, said Mike Bradshaw, Benton REA’s interim manager.
“There seems to be this perception that we’d walk away with all this money and they’d get nothing, but there is no basis for that at all,” he said. “The electric plant is still there and we will still be serving them.”
Specifically, the sale would include six substations, 538 miles of distribution lines, 36 miles of transmission lines and a Toppenish office.
Although the nonprofit co-op regularly returns profits to members, proceeds from this sale would be different and federal rules require it to be used to pay down federal loans, Bradshaw said.
And there is no precedent for “buying out” members whose accounts are switched to a different service provider, which commonly happens on a much smaller scale, he added. Former members still receive capital credit payments based on their previous investment in the co-op.
Moreover, the infrastructure members have been paying off – the electrical plant, the power lines, the transformers — isn’t being taken away from those residents, Bradshaw said. He added that it’s unfair to characterize the reservation facilities as being paid for just by members who live there — all the utility’s members pay down total debt collectively.
Bradshaw said he understands that Benton REA members don’t want to be switched to a different utility, but he said that in the long run residents of the Yakama Nation Reservation won’t have a choice.
“They are a sovereign nation and they are going to move forward with taking over service,” Bradshaw said. “We can cooperate in the spirit of partnership.”
Yakama Power Manager Ray Wiseman said that he has a mandate from the Tribal Council and a resolution from the General Council to expand service to the entire reservation.
If the sale is approved, Yakama Power has agreed to charge rates that are the same or lower than existing rates.
If the sale is not approved, Yakama Power could move to condemn Benton REA facilities or build more new lines as it expands, making the existing ones redundant and worthless, Bradshaw said.
Since it began operating in 2006, Yakama Power has grown to serve more than 700 customers and 132 miles of service line. It provides power to Legends Casino, the Yakama Nation’s offices, the sawmill in White Swan, the Indian Hospital, and a growing number of farms and residences. It has previously negotiated with Benton REA to take over accounts on a much smaller scale several times, Wiseman said.
And Yakama Power has used condemnation processes in the past to take over service from Pacific Power. But while it has that authority, in this case Yakama Power sought a deal first.
“We choose not to exercise that authority to find a friendly way to purchase the assets that are mutually beneficial,” Wiseman said. “We did find a way that protects the interest of everybody and can do it outside the courtroom; it’s in the best interest of people on the reservation.”
Bradshaw said his board of directors agreed.
“Not proceeding with the sale is a more costly option,” Bradshaw said. “At its core this is a business decision and it’s best for all concerned.”
Ballots are heading to members later this week and a final public meeting is planned for Wednesday night in Toppenish.
In order for the vote to count, at least 25 percent of Benton REA members need to vote. If that threshold is met, a simple majority takes it. If fewer than 2,800 members vote, the measure will in effect fail, Bradshaw said.
The voting period concludes at the end of October.
“We’re trying to be as transparent as we possibly can,” Bradshaw said. Members “are telling us ‘we don’t want to go to another power company,’ but unfortunately, the bottom line is neither they nor us are being given a choice.”