LAKE TAPPS PURCHASE AGREEMENT REACHED

Cascade and Puget Sound Energy, Inc. (Puget) have reached agreement on Cascade's purchase of Lake Tapps.  The Final Draft Asset Purchase Agreement is currently undergoing review by Cascade's Members.  The Cascade Board is expected to approve the agreement at its March meeting.  The Puget Board of Directors is expected to approve the transaction soon.

Cascade will be acquiring all the assets (real property, facilities and water rights) necessary to operate Lake Tapps for recreational and water supply purposes.  Under the terms of the agreement, Cascade will pay Puget a total of approximately $39 million, which includesa Minimum Purchase Price of $25 million plus $5 million contingent upon issuance of municipal water rights (which must contain certain conditions of Tribal settlement agreements).           An additional estimated $9 million is for costs associated with developing the municipal water rights, operations/maintenance costs and facilities improvements.

Additional information is available in the press release and Q&A on the Lake Tapps Purchase Agreement.

Cascade's Transmission and Supply Plan proposes Lake Tapps to be the single largest component of Cascade's long-term water supply system, meeting the projected 50-year water demand for the Cascade service area.

Not only will Lake Tapps be a new potable water supply, but the program provides for improved river flows for endangered fisheries, improvements to the Lake Tapps facilities, and continued recreational use of the lake.


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Cascade will begin planning the treatment and transmission facilities necessary to utilize Lake Tapps as a municipal water supply following the successful acquisition of properties, facilities, and water rights from Puget Sound Energy (Puget), the current lake owner and operator. In April 2005, Cascade and Puget reached agreement on the general terms under which Cascade will acquire the water rights and other assets needed to put water rights to beneficial use following final issuance of permits.  

The Washington State Department of Ecology's (Ecology) Report of Examination approving the use of Lake Tapps as a municipal water supply was appealed in 2003 and remanded for further consideration in 2004. In an effort to establish long-term partnerships around Lake Tapps, Cascade entered into confidential discussions with the Muckleshoot Indian Tribe and the Puyallup Tribe of Indians (the major appellants) aimed at developing a program that provides benefit for the basin's fishery while ensuring a reliable water supply and viable recreational resource.

In September 2006, Ecology issued a draft Report of Examination for the Lake Tapps project, for informal public review and comment.  For more information, visit Ecology's Lake Tapps website.

Cascade and Puget have completed the process of determining the exact property boundaries and assets to be transferred and Cascade has conducted environmental investigations and conditions assessments of all facilities.  As part of Cascade's review process for acquiring Lake Tapps, an environmental assessment of the Lake Tapps Water Supply Project was conducted.  On February 22, 2008, an Environmental Checklist and Mitigated Determination of Nonsignificance was published for public comment.

Anticipating its role as the owner and manager of a major facility in Pierce County, Cascade has reached out to establish additional partnerships related to Lake Tapps. A Memorandum of Understanding was executed with Pierce County in August 2005 that outlines how the County and Cascade will cooperate to manage Lake Tapps as a public water supply and recreational asset.

As part of the acquisition of Lake Tapps, Cascade will accept assignment of the 2004 Agreement Regarding Reservoir Management between Puget and the Lake Tapps Community.  In a 2006 Resolution, the Board stated its desire to establish a long-term relationship with the Community for cooperative management of the Lake.  The Resolution recognizes the 2004 agreement must be amended and that a revised agreement will retain the key elements of the current agreement, such as the Annual Recreational Period, Normal Full Pool and a Lake management team.

Use of Lake Tapps for recreation and water supply, plus restoration of the White River fishery requires a balanced, cooperative approach. A key to ensuring that water quality remains high is on-going testing and monitoring. Cascade, Pierce County, the Muckleshoot Indian Tribe, the Puyallup Tribe of Indians and Ecology are cooperatively monitoring the water quality of Lake Tapps and the White River.

The Lake Tapps Task Force was established to ensure the viability of the lake. Cascade is an active member of the Task Force, utilizing this forum as a way to communicate and coordinate with the Lake Tapps community. Another important entity along the White River is the U.S. Army Corps of Engineers (the Corps). The Puget diversion dam on the White River controls the amount of water flow into Lake Tapps and is essential in providing fish passage around the Corps' Mud Mountain Dam. The Corps has committed to continued operation and replacement of the diversion dam. Cascade is cooperating in the operational decisions regarding the diversion dam and design of the replacement dam.