Oregon regulators set deadline for irrigator rates

 June 8, 2005

By DYLAN DARLING

By this fall, Oregon officials will decide whether power rates for Klamath Basin irrigators will go up.

The Oregon Public Utility Commission said Tuesday it will decide two issues at the same time: Whether rates for irrigators should go up as much as tenfold, and whether PacifiCorp should be able to raise rates 12 percent statewide.

A decision is expected no later than Sept. 12, said Bob Valdez, commission spokesman.

"There will be a decision by Sept. 12, but that does mean the rates will be going up then," he said.

A 50-year-old contract inked by PacifiCorp's predecessor has kept rates at about half a cent per kilowatt hour for irrigators in and just outside of the Klamath Reclamation Project. The contract for Project irrigators is set to expire on April 16, 2006, and the contract for off-Project irrigators doesn't have an expiration date, according to the PUC.

PacifiCorp has argued that both contracts should be terminated and the irrigators' rate increased to what other irrigators pay in Oregon.

Irrigators argue that the company benefits from the Project's existence and that federal law requires them to offer irrigators the "lowest reasonable rate available," said Lynn Long, a farmer near Lower Klamath Lake and member of the Klamath Water Users Association's power committee.

"It's cut and dried, plain and simple," Long said.

What's not simple is a tangle of jurisdictions, contracts, laws, new legislation and negotiations.

"That thing is so mixed up that average folks can't understand it, and I'm one of those average folks," Long said.

Some complicating factors:

n Irrigators holding contracts with PacifiCorp are also in two states. Oregon's legislature is working on a law that would phase in any rate increase that if passed, wouldn't affect irrigators on the California side of the Basin.

n A potential jurisdictional struggle between the state commission and the Federal Energy Regulatory Commission.

Many of the irrigators also wanted a decision about a rate increase held until the federal commission relicenses PacifiCorp's hydroelectric project on the Klamath River.

The company's license expires in 2006, its 7,000-page renewal application is in and the federal process could lag for several years.

"All of the irrigator parties are arguing that the reduced rate should be a condition of the FERC license," said Edward Bartell, a Sprague River rancher and member of the Klamath Off-Project Water Users.

Even if the PUC rules that the irrigators' rates should go up, that doesn't mean they will, said Scott Seus, a Tulelake farmer and member of the Klamath Water Users Association's power committee. He said FERC will have the final say.

The PUC says differently. Its order says FERC has twice declared that the rates PacifiCorp charges to its retail customers are not relevant to its relicensing review. And, "this Commission, not FERC, has jurisdiction over rates charged by PacifiCorp to its Oregon retail customers."

Seus said the irrigators are taking the rate issue one step at a time and they are still disseminating the PUC's order.

"This is just one little brick in a brick path from now to April," Seus said. "There's a long time from now until then."