In a previous article which appeared in the Herald on July 24th, “Does PUD’s Tokeland extension project follow Washington law?” it was explained that Washington RCW 54 required that the residents of Tokeland petition to be annexed by a new public utility district. Since this article, new documentation has come to light, which indicates that other agreements between Grays Harbor and Pacific County PUDs were arranged in the early existence of the districts. In 2006, Pacific County PUD formally informed Grays Harbor that it wished to terminate the agreement.
On June 22, 1940, District 1 of Grays Harbor PUD and District 2 Pacific County PUD entered into agreement that Grays Harbor PUD would serve Pacific County residents in the Tokeland/Grayland area. This agreement was renewed on June 30th, 1990. The 1990 agreement reads as followed:
“SECTION 1: DISTRICT 1 shall continue to operate, maintain, and when necessary expand the electrical distribution system to provide electric serve to consumers in that portion of Pacific County from the Grays Harbor-Pacific County line southward to Tokeland in the same manner and with the same Rates and Polices as for consumers in Grays Harbor County. . .”
Section 2 describes the governmental subdivisions located in Pacific County which fall under the agreement, expanding across the Tokeland/Grayland area.
“SECTION 3: DISTRICT 2 shall upon one year’s written notice to DISTRICT 1 have the option to acquire the electrical system constructed, maintained and operated by DISTRICT 1 in the area of Pacific County described in Section 2 above.
“SECTION 4: Upon exercise of the option to purchase, DISTRICT 2 shall pay DISTRICT 1 the appraised value of the existing plant owned by DISTRICT 1 in Pacific County on the date acquisition is consummated.
“SECTION 5: In the event the parties are unable to agree on the fair market value, each party agrees to appoint and compensate one appraiser to appraise the distribution facilities; said to appraisers to select a third appraiser, to be compensated by the parties jointly, with the findings of this board of appraisers as so constituted to be binding both parties. . .”
Pursuant to the 1990 agreement, on October 6th, 2006 Pacific County PUD provided Grays Harbor with formal notice of interest in purchasing the electric system in the Tokeland/Grayland area. It reads:
“As provided under Section 3 of the current Agreement, one year’s written notice shall be provided if PUD No. 2 of Pacific County is interested in acquiring the electrical system constructed, maintained, and operated by PUD No. 1 of Grays Harbor County in the described area. Let this letter serve as the official notice of such interest by PUD No. 2 of Pacific County. PUD No. 2 of Pacific County has plans to construct a transmission line along SR 105 from Baleville to Tokeland, build a substation along SR 105 near Tokeland Road, and connect to the distribution system to serve the electrical customers in the above stated area beginning in late October 2007.
“Representatives of our two utilities will need to meet and discuss the process for selecting an appraiser, the facilities to be included in the appraisal, and the transition of customers from service by PUD No. 1 of Grays Harbor County to PUD No. 2 of Pacific County.
“A new Agreement will need to be drafted at some point in the near future terminating the existing Agreement and describing the elements of the transition including a description of facilities, purchase price, transition terms and indemnity.
“PUD No. 2 of Pacific County expresses our thanks to PUD No. 1 of Grays Harbor County for providing electrical service to these Pacific County residents admirably over the past sixty-six plus years.”