rate extension for irrigators
January 27, 2006 By STEVE
KADEL H&N Staff Writer
A recent federal ruling strengthens the chances that
Basin irrigators will see major electricity rate
increases this spring. And how much of a rate
increase irrigators see could depend on which side
of the Oregon-California border they're on.
The Federal Energy
Regulatory Commission issued an order Jan. 20
denying a Department of the Interior request that
current power rates charged by PacifiCorp be
extended past the April 16 contract expiration.
“It was a punch in the gut,” said Greg Addington,
executive director of the Klamath Water Users
Association, which represents 17 irrigation
districts in the Basin. “It's another hurdle, and
we're getting used to hurdles.”
Oregon law provides a seven-year period to phase in
big rate increases. But mitigation for the so-called
“rate shock” doesn't exist in California, where the
rate boost would be immediate.
A 50-year-old contract between irrigators and
PacifiCorp's predecessor has held rates at
six-tenths of a cent per kilowatt hour for Klamath
Project farmers and ranchers. There are about 1,400
farms in the Project.
However, the regulatory commission's decision also
would affect irrigators who are not part of the
“Their rate is different from the Project, but is
also low cost,” Addington said. “They are still
looking at a rate increase.”
Those off-Project irrigators
now pay three-quarters of a cent per kilowatt hour.
PacifiCorp officials say Basin rates are about
one-tenth the standard irrigation rate the utility
charges users in the Willamette Valley and the Bend
area, where the irrigation rate is about 5.5 cents
per kilowatt hour.
Public utility commissions
in Oregon and California ultimately will determine
the rate structure for irrigators here, Addington
said. That process is under way in Oregon and is set
to begin next week in California.
Addington said the association believes Basin
irrigators deserve lower power rates than those
“We will make our arguments that the Project
provides a benefit to the (Klamath) river,” he said.
Water users contend the
river has water year-round because of the Project,
which regulates flow and water availability.
Addington noted that farmers near Medford and
elsewhere around the state primarily use gravity
irrigation. That's not the case in the Basin.
“You can't make a comparison
to us and anywhere else in Oregon,” he said.
Association members realize that keeping the 1956
power rate might not be feasible, Addington said,
although they hope for a compromise.
“There's still a chance we
will pay a rate less than (PacifiCorp's) tariff,” he
said. “We're trying to be realistic.”
PacifiCorp spokesman Dave Kvamme said the utility is
talking to the California Public Utility Commission
about establishing a phase-in process similar to
“We have been supportive of
something that mitigates rate shock as long as it
doesn't hurt our shareholders and other customers,”
Kvamme said it's time Basin irrigators paid higher
power rates because PacifiCorp's other ratepayers
have been picking up the shortfall.
“The cost for this has been absorbed by all kinds of
customers,” he said. “For 50 years they have had
access to low power rates.”
Meanwhile, Bureau of Reclamation spokeswoman Rae
Olsen said the regulatory commission's ruling isn't
necessarily a done deal.
“Interior is requesting a rehearing of the order and
will also continue to pursue efforts with the
California PUC to encourage at least a phase-in of
power rates,” she said. “Reclamation's position is
that, if feasible, a cost-based power rate should be
negotiated which recognizes the value of water
control and availability for PacifiCorp's operation
from the Klamath Project.”
Scott Seus, a Tulelake farmer who serves as chairman
of the Klamath Water Users Association's power
committee, agrees with Olsen that the issue isn't
settled - particularly with decisions by the two
states' public utility commissions still to come.
“I would not by any means say the nail is in the
coffin for the irrigators,” he said. “I don't want
irrigators to think we have given up the fight. The
economics of the Basin are at stake, so we're
keeping this alive.”
If the regulatory commission's decision stands, Seus
said, it would have a damaging effect on local
wildlife refuges and flows back down the Klamath
“The cost would be high enough that there would be
an impact to Project operations,” he said.