Dam owner PacifiCorp since 1956 has provided power to the U.S. Bureau of Reclamation's Klamath Project for a fraction of what most irrigators pay. The contract is up in April, and that frees PacifiCorp from any obligation to keep providing cheap electricity, the Federal Energy Regulatory Commission decided.

Irrigators have claimed that the federal Klamath River Compact demands that Klamath River water provides the lowest possible rates for irrigators. Tribes have argued that prolonging the cheap power terms would violate the government's trust responsibility by keeping up overuse of water, threatening Klamath River salmon. Environmental groups also pushed the commission to allow higher rates.

PacifiCorp operates six hydroelectric dams on the Klamath River, and is asking FERC for a new 50-year license. It also operates Link River Dam, which dams Upper Klamath Lake and regulates the amount of water sent downstream for power generation.

Bureau of Reclamation pumps move water around its 200,000-acre project, and pumps at various districts send it on to canals and other infrastructure from which farmers pump water onto hay, potato and grain fields. That tiered process compounds costs.

Greg Addington, executive director of the Klamath Water Users Association, said he's not aware of any other project with similar power needs, and believes PacifiCorp would not have agreed to the previous 1956 contract if the utility didn't make money. Klamath Irrigation Project customers will be charged the same tariff as any other irrigator, more than 10 times what they are currently charged. An Oregon bill passed last year allows for the increases over seven years.

”Why would they ever have come up with this deal if there wasn't some benefit to them?” Addington said.

The U.S. Department of the Interior -- under which falls the Bureau of Reclamation -- has requested a rehearing from the commission, and will file its arguments within 30 days.

”We have water issues and now we're having dollar issues with electricity,” McCracken said.

The FERC ruling also seems to reflect the increased stress on the Klamath's resources. The original 1917 contract signed by the California Oregon Power Co. agreed to keep Upper Klamath Lake at a certain level for irrigation, provide water for irrigation and provide power for pumping, it reads. Water leftover was sent downstream to generate power for other customers.

”There has been a lot that's happened over this period of time,” said PacifiCorp representative Dave Kvamme. “We think that the ruling verifies our view of the facts.”

Today, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service demand that Upper Klamath Lake be kept full enough to protect endangered sucker fish, and that flows sent to the lower river are adequate for threatened coho salmon. In recent years, the government has paid farmers millions to stop irrigating or switch to using groundwater to free up extra water for salmon.

Water quality, fish diseases and the cut of historic spawning grounds by Klamath dams are all being weighed in the larger hydroelectric licensing procedure or by fisheries agencies. PacifiCorp, several American Indian tribes, environmental groups, irrigators and governments are also involved in parallel settlement talks.

Federal fisheries officials have indicated that they will demand fish passage past the dams, which could cost more than $100 million. The exact recommendations are expected some time in February.

John Driscoll covers natural resources/industry. He can be reached at 441-0504 or jdriscoll@times-standard.com.