NEWHALEM, Wash.—More than a century ago, Seattle City Light broke ground for a massive hydroelectric project here in a remote gorge of the North Cascades. Three dams soon powered the rise of what would become one of America’s richest and most liberal cities.

The Skagit River dams, the first of which was completed in 1926, have enabled Seattle’s citizen-owned utility to brag that it “has delivered carbon-free hydropower for over 100 years.” It claims to be the first utility in the nation to be carbon neutral.

While flattering itself for being “really green,” the city did not trumpet its longtime claim that the high-mountain dams had no significant effect on migrating salmon. Since Calvin Coolidge was in the White House, City Light has quietly insisted that the upper Skagit—before the dams were built—was too swift and gnarly for salmon. It contends that the wild river itself, not dams, is to blame for the absence of upriver salmon.

This fishy denial—long challenged by biological evidence, Indigenous oral history and investigative reports on local television and in online publications—is now biting the utility and its half-million ratepayers in their pocketbooks.

Mayor Katie B. Wilson signed a settlement Tuesday that authorizes what a City Light manager says is by far the largest payout in American history from a utility to Indigenous tribes as part of a dam relicensing. With the settlement, City Light expects to secure a third 50-year license for its Skagit dams from the Federal Energy Regulatory Commission.