Hike could break farmers

January 28, 2006 By STEVE KADEL H&N Staff Writer

Several Klamath Basin farmers will go out of business if a proposed power rate increase goes into effect, a local water official says.

“There clearly will be people who will go broke, both here and in California,” said Edward Bartell, president of the Klamath Off-Project Water Users.

PacifiCorp wants to increase electric rates for Basin irrigators so they match the standard rates charged to other irrigators in the state. Local farmers have enjoyed special low rates through a contract with PacifiCorp's predecessor that was signed in 1956 and is set to expire April 16.

That contract covers irrigators who are part of the Klamath Reclamation Project, which straddles the Oregon-California border. The Federal Energy Regulatory Commission last week denied a request by the Department of the Interior to extend the lower rates beyond the contract's April 16 deadline. Public utilities commissions in Oregon and California will have the final say in the matter for irrigators in the two states, but Oregon irrigators are protected by a law that phases in large rate increases over seven years. California has no such law.

Meanwhile, off-Project irrigators have a separate contract with PacifiCorp and are in jeopardy of seeing their power rates increase, too. That requested rate boost by the utility also is being studied by the Oregon Public Utilities Commission.

“Our contract spells out that in exchange for reduced power rates we are providing benefits for PacifiCorp in terms of increased flow,” Bartell said.

In testimony before the PUC this month, water resources consultant and engineer Louis Rozaklis of Boulder, Colo., said pumping water for agricultural irrigation and drainage on off-Project lands gives PacifiCorp at least 131,000 acre-feet per year of increased supply for hydropower generation in the Klamath River near Keno.

An acre-foot is the amount of water it would take to cover one acre of land one-foot deep.

“The 131,000 acre-feet per year of quantified increased supply produced from off-Project lands produces an average of approximately 81,000 megawatt-hours per year of electrical energy at PacifiCorp's hydropower facilities located on the Klamath River downstream of Keno,” Rozaklis told the PUC.

If higher prices go into effect, Bartell said it would hit irrigators who use large amounts of power most of all.

“It's going to punish those who are most efficient," he said. “When you are talking about lifting water 100 feet out of a well it becomes cost prohibitive.”

Bartell mentioned a Basin farmer whose annual electricity bill has been $17,000 under the current contract. His power costs would go to $100,000 under the rate structure sought by PacifiCorp, Bartell said.

While the Federal Energy Regulatory Commission's recent ruling doesn't pertain to off-Project users, those irrigators felt the sting nonetheless.

“We are very disturbed by what happened to the on-Project users,” Bartell said.

In its ruling, the regulatory commission noted that Interior argued the 1956 contract is “an integral part of the license” and must be continued. PacifiCorp opposed that interpretation, adding that it is unreasonable to offer “discount rates to a subset of PacifiCorp's retail customers.”