By Dennis Box-The Courier-Herald

The table stakes to buy Lake Tapps and the drinking water rights to the reservoir are about to jump to a new level of complexity.

Three cities surrounding the lake - Bonney Lake, Auburn and Sumner - are planning to present a deal to buy the lake from Puget Sound Energy, the owner of the lake for the past 100 years.

The cities are offering about $33 million, essentially cash on the barrelhead after the parties sign on the dotted line, without a perfected or legally cleared drinking water right.

PSE is in the midst of negotiating with Cascade Water Alliance, an eastside water alliance. Cascade is offering $37 million with $10 million down and the balance to be paid after the water rights issue has cleared all legal challenges. Appeals could tie the deal up for many years.

State Rep. Chris Hurst, D-Greenwater, along with the three mayors - Neil Johnson of Bonney Lake, Pete Wilson of Auburn and Dave Enslow of Sumner - have been meeting with representative of PSE, homeowners around the lake and other interested parties for the past several months, trying to put the deal together.

If the purchase can be brokered, which is still in question, it would mean a major change in the ownership and future of the lake and the water rights.

&#8220This is a way to secure the future of the lake, water rights and property values if the cities go together,” Johnson said. &#8220If we look at the long-term vision, this is the way we have to look at it.”

Hurst and the mayors are intending to deliver the offer to PSE today, Wednesday, but many aspects of the deal and possible ramifications are still in motion.

&#8220I see this as a very positive turn of events that will benefit citizens around the lake and the larger community,” Hurst said. &#8220I know the cities of Auburn, Bonney Lake and Sumner have an interest not only in the water rights, but they are acutely concerned with the recreation values of the lake and homeowners' interests as well.”

Lewis said his city has a serious need for water and &#8220this is a way to fill the need of the whole community. For all three cities the guiding principle is the lake stays up. When the lake goes down it affects everyone around the lake. We need to be able to protect the water rights and make sure the lake stays up.”

This is not the first time Auburn and Bonney Lake have considered purchasing the lake.

In 1997, the Federal Energy Regulatory Commission requirements for a hydroelectric license became considerably more challenging. PSE closed the White River hydroelectric plant in January 2004 because obtaining the FERC license was too expensive.

In 2003, the Department of Ecology granted municipal water rights to PSE for the lake.

The Puyallup Tribe, Muckleshoot Indian Tribe and the cities of Auburn, Pacific, Algona and Buckley, along with private citizen Robert Cook, appealed the decision.

The Pollution Control Hearings Board sent the decision back to Ecology in 2004 for reconsideration after the plant was closed.

Converting the lake to a municipal water reservoir was thought to be the best way to save the lake.

Hurst said the cities around the lake considered buying the reservoir earlier in the process.

&#8220This isn't a new idea,” Hurst said. &#8220 We always felt this was one of the most logical paths. I think it was an opportunity missed, but there is a new vision (now) from what existed back then. They (the mayors) are being very forward thinking.”

Johnson said one of the advantages of the cities purchasing the lake instead of Cascade is the amount of water needed for consumption.

&#8220We are just looking at what is needed for growth,” Johnson said.

The mayor said all three cities would fund the cost of buying the lake through a water utility.

&#8220We wouldn't have to raise rates,” Johnson said. &#8220We would take out a utility bond and pay it back through rates.”

Mike Gagliardo, general manager for Cascade, did not have a comment on the proposed purchase, but said the alliance is close to completing the deal with PSE.

&#8220I know I've said this before,” Gagliardo said. &#8220But we're finalizing the last few issues. We should be done in 45 to 60 days.”

A political sticking point has been Cascade's request for eminent domain powers, allowing the alliance to take property through a condemnation process if necessary to build a pipeline from the lake to Bellevue.

There has been considerable resistance by the state Legislature over allowing Cascade the power of eminent domain.

Cascade appears to be facing some high hurdles to close the deal for the lake and Hurst believes some of those issues could be resolved if the cities purchase the lake.

&#8220If CWA takes a step back and thinks,” Hurst said, &#8220they will see this is a good idea. As the months have gone by this has become a worse deal for homeowners. This is a deal that should have been done years ago. We came full circle and these are mayors who are willing to roll up their sleeves and get the deal done.”

Sources close to the PSE and Cascade agreement reported there is an exclusivity provision stating PSE can only negotiate with Cascade, but there is a way around, or out, of the exclusion.

&#8220If we can secure the water right and lake for the generations to come we've done our job,” Lewis said.

Dennis Box can be reached at dbox@courierherald.com.