METALINE FALLS, Wash. -

An agreement between two power companies and the federal government has people in northeast Washington up in arms over the impending loss of the historic Mill Pond Dam.

For 100 years the people living in north Pend Oreille County have enjoyed the benefits of the small dam that forms the Mill Pond. The Pend Oreille Public Utilities District surrendered its license to the Sullivan Creek project near Metaline Falls in 2008. Federal requirements mean the historic Mill Pond Dam must be removed and that doesn't sit well with local residents.

"It's just going to be devastating to have it gone. It's just going to be ugly," Chris Baker said.

It was originally built to harness the power of Sullivan Creek. It diverted water to a wooden flume that ran downstream to a power plant and the electricity it generated was used to power the cement plant in Metaline Falls.

In the 1950s the project was abandoned with the arrival of Box Canyon Dam on the Pend Oreille River and the Mill Pond Dam's purpose shifted from power production to recreation production.

"Poor daddy, he would bait everybody's hook and by the time he'd get to throw his line in, he'd have to go back and bait the first girl's hook because we'd already reeled in," Baker said.

For generations of families the Mill Pond, nestled in the treed mountains, has been a place for fishing, hiking and enjoying the outdoors. That's why 15-year-old Deforest Cates decided to launch the Facebook campaign "Save Mill Pond."

"It's a great place to come with the family and get dirty and have some fun," Cates said.

For Cates and others, Mill Pond is a living historical sight. Remnants of an old mill and homestead are still visible and an interpretive trail tells the story.

"People use to come up here on the flume before the roadway was put in and even after to hang out at Sullivan Lake," Mary Cates said.

The PUD decided to surrender the license to the creek because it felt it would never be financial feasible to re-start the project and generate electricity at the old power plant. At that same time Seattle City Light, which operates Boundary Dam downstream, was going through the re-licensing process and, as part of that negotiation, it agreed to take on the cost of the Mill Pond Dam removal for $12 Million.

"I don't understand why to re-license a dam. Why they have to destroy something as beautiful as this. It just doesn't make any sense to me," Baker said.

The cost could have been passed on to the 8,500 rate payers of Pend Oreille County.

"This is our backyard.. We all pay for this with our taxes," Mary Cates said.

Seattle City Light estimates it will be three years before the dam is removed and until then local residents vows to fight its removal.

"I'm not an environmentalist. I'm not a kayaker, but I love this pond and it's one of the reasons I moved here," Mary Cates said.

The agreement to remove the dam was approved by the federal government in 2008 so the group is facing an uphill battle. Locals say when the agreement was being negotiated local residents' voices were ignored.