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In this image from the Environmental Working
Group’s website, it shows how the group is billing its
study, with the headline “Power drain: Big ag’s $100
million energy subsidy.” The study is drawing fire
from farmers and others who say the information is
misleading. |
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The Environmental Working Group study can be found
online at www.ewg.org
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Valley farmers fire back at environmental group's study
Critics say
claims of electric rates subsidized by government are
misleading
Bob Krauter
Capital
Press California Editor, 6/1/07
Central
Valley farmers are amped up by a study that says they are
getting cut-rate electricity from the federal government.
Riverdale farmer Ross Borba, commenting on a study released
Wednesday by the Environmental Working Group, bristled at the
criticism that 7,000 farmers who receive irrigation water from
the Central Valley Project also get subsidized electricity.
"We are paying for the project, including its cost of
operation just as I would if I put a solar system on my house.
Then I should be entitled to whatever the benefits of that
investment were," Borba said.
The study alleges that farmers pay about 1 cent per
kilowatt-hour, a rate subsidized by about $100 million in
federal funds when rates are compared to Pacific Gas and
Electric customers.
"We saw this as an extension of the work we have done on water
subsidies," said Bill Walker, vice president of the
Oakland-based Environmental Working Group. "This is another
example of how a relatively few farmers in California's
Central Valley really have a competitive advantage over a lot
of people who happen to be outside the Central Valley
Project."
Walker said his group, which has for years charged that
Central Valley Project farm customers get water subsidies
worth at least a half a billion dollars annually. He said the
same farmers are also now getting power subsidized to the tune
of about $100 million a year, "so that is a significant
competitive advantage that they have over farmers who aren't
lucky enough to be in the system."
Jeff McCracken, a spokesman for the U.S. Bureau of
Reclamation, called the study and its authors "misleading".
"What these guys are doing - I call them
statistically-retentive," McCracken said. "They are comparing
the wholesale cost of power that the federal government
generates from facilities built in the 1950s and 1960s to the
retail cost of power that PG&E is generating today, including
a profit and much higher costs for nuclear power plants that
they are paying for. That, in itself, is extremely misleading
to the average person."
McCracken said the Central Valley Project system generates
about 5 million megawatts of electricity, of which only 1.5
million megawatts are used to move water. Farmers pay the
power cost, but McCracken said the Bureau of Reclamation
cannot charge them any more than it what it costs to generate
the power under federal law.
"To imply that these guys are subsidized and they are getting
rich off of this is ridiculous," he said.
In Westlands Water District, the Environmental Working Group
study concluded that power subsidies in 2002 were worth about
$165,000 per farm.
Sarah Woolfe, a spokesperson for Westlands Water District,
countered the claim.
"This infrastructure was built and legislation was authorized
to provide its own power at cost and the fact that it produced
additional power and sells it to other agencies is a huge
benefit to the state," Woolfe said.
"The CVP was built to generate its own power and to sell the
excess power to other public agencies and it has been doing
that efficiently and very well. And we are paying for the
construction of that facility," he said.
The Environmental Working Group recommends that Central Valley
Project water users should pay prices approximating the market
rate for power used to store and move irrigation water through
the system of 1,500 miles of canals.
Five Points farmer Dan Errotabere said if rates are raised on
farmers, consumers will ultimately pay higher food costs.
"Fundamentally, the project was designed to do exactly what it
does - hold down the input costs of farming," he said. "If you
change or adjust that higher as they suggest, it only comes to
affect consumers down the road."
Walker acknowledged that power and water rates in Central
Valley Project contracts cannot be changed without
congressional action. Walker's office has been in contact with
Rep. George Miller, D-Martinez, who sits on House Subcommittee
on Water and Power.
"They don't have any concrete proposals yet, but they are
interested in looking at ideas and some of the ideas we
suggested to them are we need to restore the San Joaquin
River, but we are not sure where the money is coming from,"
Walker said. "How about a small increase in amount that
Central Valley farmers are paying for their power and that
money goes to fund restoration of the San Joaquin River?"
Bob Krauter is the Capital Press California editor based in
Sacramento. His e-mail address is bkrauter@capitalpress.com.
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