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Multimillion-dollar
question looms for Klamath
3/8/05
By TAM MOORE Oregon Staff Writer
tmoore@capitalpress.com
KLAMATH FALLS, Ore. – The lowest “reasonable”
power rates for Klamath Project irrigation in 1956
were 0.6 cents a kilowatt-hour, 0.75 cents Kwh on
lands within the project but not served by
irrigation diversions from U.S. Bureau of
Reclamation.
As the 50-year-old power contract based on
reasonable rates expires in 2006, PacifiCorp says
current “reasonable” rates are 5.5 cents per Kwh
in Oregon, 6 cents in California, plus a “demand”
charge based on duration of peak electrical load.
The original Klamath irrigation rate contract was
issued in 1917, part of the federal government’s
construction of the Link River Dam, which diverted
water to Klamath Project Canals. California Oregon
Power Co., PacifiCorp’s predecessor, granted the
low rate in exchange for being able to operate the
dam to the benefit of its downstream hydroelectric
facilities.
Last week in Klamath Falls, a crowd of ranchers
and farmers came to a lunch where PacifiCorp was
supposed to tell them what to expect if local
irrigators jump from the 1956 contract rate
monumented as policy in the state-federal Klamath
River Basin Compact to current agricultural
schedules charged non-project irrigators in
California and Oregon.
Trouble was, Sally LaBriere, the power company’s
regional community manager, couldn’t talk
specifics.
“Obviously the ink isn’t dry on anything,” she
said.
While LaBriere spoke, a negotiating team from
Klamath Water Users Association flew home from a
week of lobbying in Washington, D.C. They want the
Federal Energy Regulating Commission to mandate
lowest reasonable power rates for project
irrigators when PacifiCorp’s Klamath hydroelectric
licenses come up for renewal in 2006.
John Nichols, vice chairman of the KWUA Power
Committee, said it’s important to get the word out
that irrigators paid for the water storage
facilities that make operation of PacifiCorp’s
dams feasible. He said he worries that the power
issue could become so large it ends up in court,
with FERC repeatedly extending the old license
while parties litigate.
PacifiCorp has long argued that since the federal
government stepped in, ordering flows based on
protecting fish listed under the Endangered
Species Act, the company gets little benefit from
project flows.
How large are the stakes? PacifiCorp’s Jon Coney
said by phone from Portland that 1,300 individual
customers have project irrigation rates. Estimates
on the impact of moving to state utility
commission rates are estimated at between $1.6 and
$10 million a year, depending on who’s doing the
math.
“Just say it’s in the millions of dollars,” said
Coney.
Oregon’s Public Utility Commission estimates that,
based on actual usage during the 2003 growing
season, pump operators on the Oregon side of the
border face a $6.5 million a year power bill,
instead of the $650,000 they paid.
For Bonanza rancher Louis Randall, that kind of
math is easy. Randall is a cattle and hay
producer. He knows that running up his irrigation
pumping bill by nine times the current rate
doesn’t pencil out.
“Maybe if you are growing something more valuable
than grass,” he said, “but if all you can grow is
grass and that depends on the price of cattle. ...
The prices are pretty good now, but we all know
they don’t last forever.”
Chatting before lunch, Randall predicted that
hundreds of Klamath Project farmers who did
federal cost-share overhauls of irrigation
equipment will find they can’t afford to run the
pumps for their new pressurized systems.
Rodney Todd, an Oregon State University extension
agent nearing retirement, is doing his best to arm
producers with analytical tools that may help them
figure out how to get ready for some sort of
dramatic hike in power rates. Todd is an agronomy
adviser, but his undergraduate training was in
water engineering, and he came to the Klamath
Basin to work for an irrigation district before
joining extension.
Todd didn’t consult with Randall, but he reached
the same conclusion: Returning to gravity flows
and flood irrigation may be the way some
operations survive.
What Todd can say for sure is that “with higher
energy costs there is going to be chaos” in the
Klamath Basin.
LaBriere said in an interview that one of the big
reasons she can’t predict costs for each irrigator
is that PacifiCorp doesn’t have the meters
installed that allow measuring demand rates.
Change-out of meters will come in 2005, allowing
some sharpening of costs.
Todd hopes to have a simple computer program that
will let farmers play with options.
Nichols said KWUA looks first to the licensing
process and to political action that as in 1956
and 1957 monumented low rates for project
irrigators.
At PacifiCorp headquarters, Coney had a
bottom-line observation. At present the difference
between Klamath irrigation rates and the actual
cost of power generation is an expense shared by
all of Pacific’s customers, from Wyoming and Utah
west to California. If the company gets the
revenue it anticipates, that will take the edge
off some requested rate increases.
As a matter of fact, pending state-by-state
increases would up the cost per Kwh for irrigation
pumps before 2006. That’s another reason LaBriere
has to say the “ink isn’t dry yet.”
Tam Moore is based in Medford, Ore. His e-mail
address is tmoore@capitalpress.com.
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