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May. 14, 2005

Rate-hike plan changes Klamath fight

Some hope prices relieve irrigation concerns

Associated Press


The continuing battle in the Klamath Basin between farmers who need scarce water for their crops and activists who believe it should be used to preserve threatened and endangered fish has moved to a new front.

Environmentalists, salmon fishermen and the Hoopa and Yurok tribes, who champion more water for fish, have turned their focus on the price of electricity that pumps the water through miles of canals on the Klamath Reclamation Project and into individual irrigation systems.

Unsuccessful in winning a federal buyout of irrigated farmlands, they are taking a page from conservatives and pushing for the free market to reduce irrigation.

They support the utility PacifiCorp's moves to raise electric rates for 1,300 customers on the Klamath Reclamation Project and neighboring lands as much as 1,000 percent to market rates when the current 50-year contract expires next April.

The idea is that higher power prices will make it too expensive to irrigate tens of thousands of acres of marginal farmland, putting more water in the Klamath River for struggling salmon.

''The question is whether it is in the public interest to subsidize irrigation on the most marginal lands,'' said Jim McCarthy of the Oregon Natural Resources Council, an environmental group. ''The balance can be here if we just let it occur and stop the subsidy. You will see more water going down the river for fish and wildlife, which is also an economic engine for the coast and southern Oregon.''

Basin 'water-starved'

The Pacific Coast Federation of Fishermen's Associations, which represents California salmon fishermen facing a sharp reduction in their catch due to struggling runs in the Klamath River, has thrown its support behind PacifiCorp on the issue.

''The Klamath Basin is so water-starved that every effort should be made to conserve rather than provide economic incentives to waste,'' said Glen Spain of the fishermen's association.

Authorized in 1905, the Klamath Reclamation Project built a network of canals to drain Tule Lake in California and Lower Klamath Lake in Oregon and now irrigates 180,000 acres of farmland that produce grain, alfalfa, onions, potatoes, horseradish, and cattle.

On most projects around the West, the U.S. Bureau of Reclamation built dams to provide low-cost power for irrigators. The Westlands Irrigation District in California, for example, pays the equivalent of 3.6 cents per kilowatt hour, according to the bureau.

Not so in Klamath. They ceded that responsibility to California & Oregon Power Co., which built dams to regulate flows out of Upper Klamath Lake and produce electricity. Copco has since been taken over by PacifiCorp, which is owned by the multinational energy giant Scottish Power.

Annual losses near $10 million|

For PacifiCorp, it's a matter of updating rates that have not changed since 1956, and a deal that began in 1917, said spokesman Jon Coney.

Electric rates of 0.6 cents per kilowatt hour were 20 percent below market in 1956, said Coney. They are now 99 percent below the 6 cents per kilowatt hour charged for irrigation power in Oregon; the rate in California is 8 cents per kilowatt hour.

Lumping together the 220 customers on the project in California, 720 on the project in Oregon, and 300 off the project in California -- including a golf course, cemetery and schools that pay 0.75 cents per kilowatt hour -- PacifiCorp loses $8 million to $10 million a year, Coney said.

''The rates that are charged customers reflect what it costs to serve them, generate power, deliver power, and maintain the infrastructure,'' said Coney. ''What this class of customers pays does not cover those costs. By any measure, certainly by any regulatory measure, an arrangement like this certainly couldn't be continued.''

Farmers counter that their operation and maintenance of the Klamath Project provides water for PacifiCorp's dams. And if it costs too much to power new efficient sprinkler systems -- some paid for with $50 million in federal programs to reduce water demand -- they will go back to flood irrigation, which generally uses more water.

Farmers can thrive|

''Because there is affordable power in the basin, we are using conservation measures -- pressurized irrigation -- that increases our efficiency in the basin and provides more water, not just for hydro, but also the ducks, the deer, the raccoons and all the 430 species that live in concert with farmers in the basin,'' said farmer Scott Seus.

Though the cost would be a big shock for farmers, most will stay in business, moving to cheaper methods such as flood irrigation, said Seus, whose family raises horseradish, peppermint, onions and alfalfa on 3,000 acres.

''We'll do what we have to,'' he said.

Oregon State University economist William K. Jaeger concluded in a report last July that most lands would remain productive at the higher electric rate, though some would likely move to cheaper irrigation methods. He estimated farmers on the 193,000 acres using sprinklers in and out of the project would see a $40 to $50 per acre increase in power costs, enough to push some out of production, particularly on sloping uplands where flood irrigation can't be done.

''The viability of agriculture in the region does not depend on the current low energy prices, although these prices provide significant financial benefits,'' he wrote.

Lynn Long grows grain on 1,000 acres of flat bottom land in what used to be Lower Klamath Lake. His family came West over the Oregon Trail in 1852, and started farming on the Klamath Project in the 1940s.

Chairman of the power committee for the Klamath Water Users Association, Long argues the power rate is a federal issue, tied to the operating license for PacifiCorp's hydroelectric dams on the Klamath River, which expires next year, and the Klamath River Compact, which mandates the lowest reasonable power rates for irrigators.

PacifiCorp counters that states set power rates.

As part of a general rate increase proposal from PacifiCorp, the Oregon Public Uitility Commission hears oral arguments next Thursday in Salem on the Klamath rate. A final decision is expected in June.

A PUC staff report supports PacifiCorp, saying Oregon law prohibits discriminatory rates favoring one customer over another who uses power for similar purposes.

That leaves the Bush administration in a tough position. It has rescued Klamath farmers in the past, helping with aid for those hurt when drought forced a shut-off of irrigation water in 2001, initiating scientific studies, supporting water conservation projects, and buying extra water for fish. But President Bush has also called for the Bonneville Power Administration, which markets cheap federally produced hydroelectric power in the Northwest, to start charging market rates.

''We are hopeful something can be worked out to avoid a sticker shock for the power users,'' said Sue Ellen Wooldridge, solicitor general of the Department of the Interior.

There is a bill in the Oregon House to spread the increase over seven years, which has the support of the Oregon Farm Bureau.

If the power rates go up, Long said farmers are looking into alternative energy sources, including a giant array of solar panels that could be built on a mothballed Cold War long-range radar station.





Page Updated: Thursday May 07, 2009 09:14 AM  Pacific

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