http://www.heraldandnews.com/articles/2005/05/26/news/community_news/cit2.txt

Power contract goes to the state

Thursday, May 26, 2005

By DYLAN DARLING

Talks about a power contract between Klamath Basin irrigators and PacifiCorp that has kept rates at about half a cent per kilowatt hour have shifted to a state agency.

The Oregon Public Utility Commission heard oral arguments last week from both irrigators and from company officials. The commission also took public comments at a March open house in Klamath Falls.

"The forum now is the PUC," said Jon Coney, company spokesman.

The company isn't having any talks directly with irrigators, he said. It's now all going through the commission.

At issue is a 1956 contract that keeps rates down for Basin irrigators. The contract is set to expire in April 2006 and PacifiCorp officials said rates could go up tenfold, to about 5 1/2 cents per kilowatt hour, the amount paid by other irrigators around the state of Oregon.

Bob Valdez, commission spokes-man, said the case should be decided "soon," but gave no specific date.

"It's real complicated," he said. "it's not a real cut and dry, up and down-type thing."

Earlier this week ScottishPower, the current owner of PacifiCorp, announced it was selling the company to a Warren Buffett energy enterprise out of Iowa, but company officials said the coming sale wouldn't change the complicated contract issue. The sale is expected to be finalized in a year to 18 months, pending regulatory approval.

Scott Seus, a member of the Klamath Water Users Association's power committee, said the sale of PacifiCorp shouldn't affect the power contract talks.

"That contract is tied to the dams," he said.

The owner of the dams and the holder of the contract have changed before, Seus said. In 1961 PacifiCorp bought Copco, which had built the dams, mostly in the first half of the 1900s.

The committee has been working on the issue since 1998 and been in active talks with PacifiCorp for a year and-a-half. Now those talks are before the commission.