Tulelake Irrigators meet with County Supervisors

by Jacqui Krizo, Klamath Courier Reporter, March 20, 2006

TULELAKE – There is a quandary with Siskiyou County Supervisors and California Project irrigators regarding Klamath Project power rates.

Project irrigators paid in full for the Klamath Reclamation Project which puts millions of dollars worth of free water into Klamath River for PacifiCorp to produce cheap power for its ratepayers. In exchange for free regulated water, Project irrigators were given an affordable power rate.

However, PacifiCorp has led Siskiyou County supervisors to believe that the irrigators are receiving a "subsidy" being paid for by other California residents.

The Project power rate is due to expire this April 17^th, and Siskiyou County Board of Supervisors testified that the irrigators should not continue to receive a reduced rate or a graduated rate hike to take them to full tariff rate, the rate paid by other California residents. Full tariff would increase Project power rates 2600 per cent.

Modoc County Supervisor David Bradshaw and Siskiyou County Supervisor Jim Cook attended an informational meeting at the Intermountain Research and Extension Office in Tulelake Thursday hosted by Tulelake Growers Association to learn why Klamath Basin irrigators’ affordable power rate is justified and is not a "subsidy." Both Bradshaw and Cook personally supported the irrigators regarding a phase-in plan to full tariff rates.

    Impacts of full tariff power rate

John Crawford, board member of Tulelake Growers Association and Tulelake Irrigation District, explained what the adverse impacts to the counties would be from a full-tariff rate, and how Pacific Power and their customers benefit from the Klamath Project.

Crawford said increased power rates would impact the whole county. With an extreme power price hike, land values will decrease and many irrigators will become unable to pump with electricity.

Klamath irrigators have invested $100 million in the past few years to conserve water, relying on an affordable power rate to pay the county property tax on the $100 million.

The Bureau of Reclamation pays Siskiyou County $200,000 in lieu of taxes and possessory tax for the Siskiyou leases. At the same time, leaseland farmers pay 98 percent of the cost to pump D Plant, which routes approximately 90,000 acre feet of water through the Sheepy Ridge tunnel and into Lower Klamath Refuge and on into the Klamath River for refuge and river uses. A 2600% power hike will devalue the lease lands to where the irrigators couldn’t afford the pumping costs.

Crawford said that this year TID customers are paying $30 more per acre than last year. With tariff rates, TID would pay more to operate the district than the value of the lands.

Crawford was concerned with several of the statements made by Marcia Armstrong, District 5, from Fort Jones, Chairman of the Siskiyou County Board of Supervisors, to the California Public Utilities Commission.

Armstrong testified that, "…according to the data we received from PacifiCorp, only 10 percent of the customers use more than 100,000 kwh annually. However, this group of large users accounts for more than 50% of the power consumed by the entire irrigator class." She said that these large farmers are "very sophisticated business people."

Crawford explained to Supervisor Cook that TID comprises 90 percent of that 10 percent. The TID operation fee is paid, based on a per acre fee, by the small family farmers. In addition to the TID fee, each irrigator must pay to run his electric pumps.

The Siskiyou County attorney Roger A. Berliner, Washington D.C. constantly used the term "subsidy" in describing current Project power rates while asking questions of Armstrong, such as: "Why do you characterize the subsidy as being at least $7.39 million?"

Armstrong’s response was, "The $7.39 million figure is the additional cost that PacifiCorp has estimated all California ratepayers must pay in order to compensate PacifiCorp for the loss in revenue associated with the four-year transition to the normal agricultural pumping rate schedule that PacifiCorp proposed for these customers."

According to Armstrong, PacifiCorp stated in its testimony that the Klamath Project provides no benefits to PacifiCorp and other ratepayers, and that "the operation of the Klamath Project may result in a decrease of power generation."

Responding to this accusation, Crawford explained how the Project benefits other ratepayers as well as PacifiCorp. He said that water used to generate power by PacifiCorp on the Klamath River is pumped and stored in the Klamath Project. The Project provides the cheapest power anywhere in PacifiCorp’s territory, and that six states benefit from it. Homeowners have benefited from the relationship between PacifiCorp and the Klamath Project which has resulted in clean, efficient low cost power for nearly 100 years. Project irrigators paid for the Project in full and are thus entitled to consideration for the value they provide to the Utility and their ratepayers.

Crawford said that the value of water as a commodity has been set by the Bureau of Reclamation. PacifiCorp and its customers receive a benefit from Project return flows, the Bureau’s waterbank and storage that is provided by Link River dam which stores and regulates flows from Upper Klamath Lake.

Crawford exclaimed that we’re annually putting into the river almost $20 million worth of water for power, Endangered Act demands, and Tribal demands, and Siskiyou County is accusing us of receiving a subsidy.

Before the Klamath Project was built, Link River occasionally went dry. Tule Lake was a huge lake in a closed basin that historically had no way to reach the river before a tunnel was built to put this water into the river. And historically Klamath Lake only went into the river on high-water years. Power generation on the Klamath was not possible before the Project was built.

Modoc Supervisor Bradshaw said his board would be interested in attending another informational meeting. Cook said Siskiyou County Supervisors had been moderately supportive of the Klamath irrigators until the news articles came out suggesting the irrigators along with the tribes were having conversations and working together. He said the tribes are constantly suing Siskiyou County residents and threatening their livelihoods, so the collaboration with Klamath Water Users and tribes did not go over well.

The widely-circulated op-ed that Cook was referring to was submitted by Klamath Water Users and the Karuk and Yurok Tribes stating, "It is no secret that major concerns for water users are affordable power and water certainty. It is no secret that the Tribes want considerable improvements in their fisheries and in fact want dams removed. We are listening to each other…"

Scott Seus, chairman of the Klamath Water User Association power committee, said that the tribes are supporting the proposed rate mitigation and "that by joining the Tribes on that letter, KWUA secured their support for the Department of Interior’s Motion for Summary Judgment at FERC."

Seus went on to say that "all parties have put demands on the table; however, at this point they are only topics for consideration in our effort to achieve an overall settlement. We remain committed to this collaborative effort with all of the stakeholders, which includes Siskiyou County and are trying to work together to deal with some of the Basin’s difficult issues".

Because of the sensitivity and magnitude of some of these issues, all stakeholders including on and off project irrigators, County Governments, Tribes, Environmental Groups and federal and state agencies have agreed to a confidentiality statement. Therefore participants aren’t allowed to discuss the details of the negotiations.

It was noted at the meeting that in a March 21st proposed decision of Administrative Law Judge Galvin before the California Public Utilities Commission, a four-year transition plan is adopted to bring Klamath Project customers to tariff rates. The approval also authorizes Klamath Water Users Association to seek a separate rate classification for Project customers.