From the March 9, 2005 Klamath Courier: Water and Power By Pat Ratliff

“It’s really scary this year.” – Dave Sabo

KLAMATH FALLS – The Klamath Water Users Association held a public meeting Thursday afternoon to pass along information on the power rate negotiations.  The meeting, held at the Klamath County Fairgrounds, was attended by approximately 140 people.

In 2006, Upper Klamath Basin water users contracts will expire with PacificCorp.

There is the potential to increase power rates to pumping entities in the basin by up to 2500%.  Negotiations are underway, and will conceivably be underway for some time to come, although the general tone of the meeting was upbeat.  It was stressed that no decisions have been made yet.

“This isn’t a done deal,” Lynn Long told the Klamath Courier.  “I’m confident that we’ll come out with something satisfactory.”

The Klamath Water Users Association asserts there are four reasons why the project receives a reasonable power rate.

1. The Klamath Irrigation Project receives affordable power as a negotiated ‘franchise fee’ paid by PacificCorp to Reclamation for development rights.

2. Klamath Basin pioneers demonstrated remarkable forethought and ingenuity by building the Klamath Irrigation Project storage which provides a dependable flow of water year around for power generation.

3. The Klamath Project is no unique in obtaining affordable power.  Bureau of Reclamation projects throughout the nation were developed to supply affordable power and water to agriculture producers in order to ensure a dependable, affordable domestic food supply.

4. The Klamath River Basin Compact is a federal law, ratified by the states of Oregon and California that requires that any hydroelectric development of the Klamath River be used, in part, to secure the “lowest power rates which may be reasonable for irrigation and drainage pumping.”

Facts the KWUA stressed were:

1. The Klamath Project was authorized for irrigation and power development.  The United States and PacifiCorp’s predecessor agreed that the private power development would supply the project.

2. The current power contract was required by the Federal Power Commission as a condition of PacifiCorps original license to compensate the retained interests of the United States on behalf of the Project water users.

3. The Klamath Basin pumping interests use 15 percent of the current Klamath River Generating Capacity with 85 percent of low cost hydro-power capacity benefiting all the rate-payers in PacifiCorp’s service area.

The Klamath Water Users Association has been working on the power issues and negotiations for seven years.

On project irrigators currently pay 6 mil per hour fees.  Collectively, both on and off project irrigators use about 15 – 18 mega watts per day, or abut 10 percent of the 151 mega watt capacity of the Klamath River generating capacity.

An important point to remember, and one that Scottish Power, PacifiCorp’s parent company does not recognize, is that PacifiCorp receives value from the water in the lake stored by the Project.  Having the ability to use the water spread out over time, and to a degree when they want it, and not just as it runs through the system, is of definite power making value.

Lynn Long, head of the KWUA power committee noted that Scottish Power is licensed by FERC, the Federal Energy Regulatory Commission.  The new contract will be relicensing of the 1956 power contract which is a condition of PacifiCorp’s FERC license.

Scott Seus, Tulelake, also on the Power Committee spoke of false media reports concerning the licensing.  He also noted an off project mint field of his last year that had a 156 dollar per acre electrical bill last year, demonstrating the need for good electrical conservation.

“Recent articles in the Sacramento Bee paint unfavorable light on issues here,” Scott Seus reported, “they are based on false information and misconstrued facts.”

Dave Sabo, Manager of the Klamath Area Bureau of Reclamation gave a short talk on his agencies participation in the contract process.  Sabo noted that n the past, the Reclamation had originally wanted to generate power itself for the benefit of the agricultural users.  Copco, who later sold out to PacifiCorp, who later sold out to Scottish Power, stepped in and basically said “Let us do the power, don’t concern yourself with that part of it.”

The Bureau of Reclamation also has a separate contract with PacifiCorp to operate the Link River Dam, which controls the elevation of Klamath Lake and the amount of water going downstream.

“The Bureau of Reclamations position is that the contract needs to be a cost based rate,” said Sabo, “as if the Bureau of Reclamation had built the dams in the first place.”

Sabo also commented when asked about the water situation this year.

“Well, it’s dry out there.  It’s really dry.” Sabo told the crowd.  “The forecast yesterday was for 50 percent, we’re facing some tough times ahead.  The water bank was never intended for hydrologic shortages.  We’re asking you to take a hard look at conserving water this year.”

Sabo also talked about the “Undepleted Flow Study” which the Bureau of Reclamation is just finishing up.  He described it as “more in tune with reality than the Hardy studies.”

“It tries to show what should be considered reasonable” Sabo told the crowd.  “Lower Klamath Lake, Upper Klamath Lake and the marshes should be the touch-stones of water studies.  This study should be something that grounds everyone’s thinking.”

The Reclamation Manager also noted that there are 500,000 irrigated acres above Iron Gate Dam, and the Project is 130,000 acres or approximately 30 percent.

“Why should the project be accountable for everything?” Dave Sabo asked the crowd.

Nods from the crowd gave the impression this was a good question on everyone’s mind.

In a KWUA Electrical Power Legal Brief the Water Users made clear what they want:

The Klamath Water Users Association seeks to continue the long-standing power arrangement between the Bureau of Reclamation and PacifiCorp through which the irrigators of the Klamath Project purchase low cost power (the ‘1956 Power Contract’).  KWUA’s goal is that affordable electrical energy continues to be available for irrigation, drainage, water conservation and wildlife needs.  This requires that state and federal authorities observe and enforce the policies and laws that already exist.

The KWUA’s Basic Position is:

Federal and state law in addition to basic notions of logic and fairness, compel PacifiCorps obligation to continue providing low cost power for irrigation and drainage pumping is set forth in the Klamath Basin Compact.  The Compact is a federal law that unambiguously requires that any hydroelectric development of the Klamath River be used, in part, to secure the lowest power rates which may be reasonable for irrigation and drainage pumping.  Thus, PacifiCorp is required by law to renew the 1956 Power Contract so long as it is the licensee for the Klamath Hydrological Project whether under an extension of the original license or under a new license.

The meeting ended with the introduction of the new Executive Director of the Klamath Water Users Association, Greg Addington, who will begin duties the first of April.