Paying for water
H&N photo by Steve Kadel
Tulelake Irrigation District manager Joe
Sammis, right, and Macdoel alfalfa farmer
Manfred Lutz discuss water pumping costs
Thursday at Lutz’s farm.
February 5, 2006 by STEVE
MACDOEL - Butte Valley farmers
sometimes joke that they drive pickup trucks while
their counterparts in Tulelake fly airplanes.
little bite under the humor because of different
electric costs paid to PacifiCorp by irrigators
living just 20 miles apart. The utility charges 6.3
cents per kilowatt hour to farmers in the Butte
Valley area who pump with 50 horsepower engines.
Those to the east who are part of the Klamath
Project pay PacifiCorp about a half-cent to pump
But that might change soon. PacifiCorp wants to
increase power rates for Klamath Project farmers so
they match the standard rate the company charges
The Federal Energy Regulatory Commission recently
denied a Department of the Interior request that
current low power rates for Project members be
extended past the April 16 expiration of
To people like Butte Valley Irrigation District
manager Joe Sammis, increasing Project users' power
costs would be the fair thing to do.
“We're in competition with them,” he said. “We're in
exactly the same market and it hasn't been a level
playing field. We've been subsidizing them.”
Butte Valley Irrigation District, founded in 1920,
has 18 members. It delivers water through
underground pipes installed during the last two
decades, replacing open ditches.
of Macdoel, who farms 600 acres of alfalfa with his
son Steve, is among farmers in Butte Valley who pay
higher rates to PacifiCorp.
Lutz, who was born in Germany 66
years ago, was a World War II orphan. His father, a
soldier, was killed in battle and his mother was
taken to Siberia, where she died two months after
the war ended.
Lutz came to California at age 13 through the
Lutheran Immigration Service. He was raised by Ralph
and Anna Lutz on their northern California ranch,
learning early about hard work.
He has lived in his current home since 1961. Lutz
and his wife Janet have faced some lean years along
the way. They were audited by the Internal Revenue
Service one year after reporting their farm income
figure a family of five could live on that,” Lutz
His annual power bill totals about $43,000 for six
irrigations during the growing season, including
payments to PacifiCorp and the irrigation district.
To make ends meet, he said, it's critical to avoid
pipe leakage and “friction loss” of water.
“The biggest thing you have to
watch is your plumbing on the pipes,” Lutz said.
He figures other farmers can survive an increase in
power costs because he has done it all these years.
“You got to
get your priorities right,” he said.
However, those involved in the Klamath Project say
it's unfair to compare the two situations. Their
lower power cost was negotiated with PacifiCorp's
predecessor in return for increased water from the
Project that provides hydroelectric power for
PacifiCorp, they point out.
“We are being
paid for what we provide to PacifiCorp,” said Scott
Seus, chairman of the Klamath Water User
Association's power committee.
That benefit to the utility helps keep non-Project
farmers' power costs down, he said.
Seus added that most people don't realize Project
members also pay for pump maintenance and operation
that allows the Project to exist.
“By the time we get all the Project's component
costs dumped on us, we'd be at nearly 13 cents” per
kilowatt hour, he said.
Seus said the “D” pumping plant, a key facility in
the Project's southern portion, now costs the Bureau
of Reclamation from $30,000 to $40,000 per year to
operate. That would go up to $1.3 million under
PacifiCorp's desired rate increase, he said.
“That all gets passed on to the rate payers,” Seus
With everything factored in, he said, the increase
PacifiCorp wants would increase Project farmers'
costs by 2,600 percent.
The Tulelake farmer and other industry
representatives returned Friday from talks with the
California Public Utility Commission aimed at
devising a phase-in for utility price increases.
They're using Oregon's seven-year phase-in as a
model, and Seus said progress was made last week.
“We're potentially on a path to the same rate
structure as Oregon next year,” he said, adding that
the PUC will answer by April 13.
Earl Danosky, manager of the 770-member Tulelake
Irrigation District, laughs at the idea that
increasing power costs on the Project would level
the economic playing field with those in Butte
“I don't know if there's a level playing field in
this world,” he said.
Danosky added that Butte Valley farmers might be
hurt if their colleagues' power rates jumped. Higher
electricity costs might push many farmers away from
producing cereal grain, making alfalfa production
“If you increase the alfalfa acreage in the Basin,
there will be more competition and it could actually
drag prices down,” Danosky said. “Nobody can afford
to put in cereal grain crops and circle irrigate if
electric prices go up.”
Danosky echoed Seus' words about the Project's
benefit to PacifiCorp, which he believes justifies
“By damming the Upper Klamath River they've been
able to generate power,” he said. “If it were a
free-flowing river, there would have been times they
wouldn't have had any water at all. The Project has
made it work.”
Those who support extending the current power rate
point to a ripple effect on the Basin's economy they
say would result from a big price increase.
Klamath County commissioners are putting numbers
together to calculate the effect.
“You could be looking at 30 percent of our farmers
and ranchers who'd be severely impacted,”
commissioner Bill Brown said.
It's not just a problem for those who own farms or
ranches, he added.
“A lot of land is leased and farmed that way,” Brown
said. “With water cost and availability always an
issue, if you add higher energy costs you have
people who can't pencil out leasing farm land.”
Klamath County commissioners weighed in on the issue
with a letter to the Federal Energy Regulatory
“Klamath County economics rely heavily on a
productive agricultural industry,” they wrote.
“Increased power costs would force many agricultural
producers to sell, thus causing an economic downturn
in the community.”
Although the commission has ruled against the
Department of the Interior, the latter agency has
asked that the case be reconsidered.
“Activity at FERC is ongoing and we will be a party
to that discussion,” said Steve Kandra, president of
the Klamath Water Users Association.
He also acknowledged that the Oregon and California
Public Utility Commissions have not ruled on
PacifiCorp's rate increase request. Kandra hopes
those bodies strongly weigh what the Klamath Project
gives to PacifiCorp.
“Storage on the (Upper Klamath) lake has allowed
water to be dropped down during peaking times,” he
said. “The Project provides that benefit and it has
“It's not like we just negotiated a darn good deal.
The utility is paying for a benefit they receive.”
‘We're in exactly the same market and it hasn't been
a level playing field. We've been subsidizing them.'
- Joe Sammis, Butte Valley Irrigation District
‘It's not like we just negotiated a darn good deal.
The utility is paying for a benefit they receive.'
- Steve Kandra, Klamath Water Users Association