Friday, April 01, 2005
Power rate hike threatens
Forgive the Klamath Basin area farmers for their
frustration as they face potential ten-fold rate
increases for electricity.
There is a sense of history in the area stretching
back to 1917, when the farmers’ ancestors were
first affected by dams, power company agreements
and the original rate contract in the area.
At the time, California Oregon Power Co. signed a
contract with the federal government to provide
cheap power rates in return for operating the Link
River Dam and its valuable downstream
Another contract, for 50 years, was signed in 1956
with the Bureau of Reclamation to extend those
cheap electricity rates for the area. Copco,
through a merger, became PacifiCorp which says the
historic low rates in the region were subsidized
by the company’s 1.6 million customers in six
states. This includes other customers in Oregon,
who pay 5.5 cents per kilowatt-hour for
electricity, compared to farmers in the Klamath
Reclamation Project who pay about 0.6 cents a kwh.
And there is a more recent history ever present in
the minds of farmers in the Klamath Basin, from
2001 when irrigation water was cut off from their
fields when salmon and suckerfish became a higher
priority than their valuable crops, vegetables and
This rate increase is more devastating than
shutting off water for one season.
The electricity cost increase means more than just
a few extra dollars paid each month to PacifiCorp,
which provides power to about 1,300 irrigators in
this part of southern Oregon and northern
It’s about potentially massive change in how
agriculture is done in the region.
Now the farmers are being told to change the way
they irrigate, what they grow, where they grow or
perhaps they should give up their water rights or
This is why this has the potential to become a
larger, more passionate issue.
Klamath Basin area farmers are proud of what they
grow in a semi-arid, high-desert climate that can
get from about 7 inches to more than 20 inches of
rain per year, and possible frost any day of the
year: alfalfa hay, onions, potatoes, sugarbeets
and cereal crops such as oats, barley and wheat
can be grown with enough water.
According to Oregon State University research done
in the area, alfalfa crops typically need about
30-32 inches of water, while potatoes and onions
need 18-22 inches. Depending on how quickly it
evaporates because of wind and temperature, and
the stage of the crop, this can vary depending on
So farmers in the area depend heavily on
irrigation to be productive.
How much of a financial impact will an electricity
rate increase have? That depends on who gives the
The Oregon Public Utility Commission estimated
that Oregon pump operators in that area will pay
$8.5 million per year for power, compared to
$650,000 they paid for actual usage in 2003’s
The annual power bill for the Tulelake Irrigation
District is expected to rise to $1.05 million in
2006 from $70,000 in 2003.
According to Klamath Water Users Association, if a
farmer uses a 50 horsepower pump, it uses about 30
Kwh. An average irrigator would use that 50 hp
pump for about 43,000 Kwh in a season.
At a KWUA meeting on March 3, farmers were told
the price increase for a 50 hp pump within the
Klamath Project area would rise from $140 per year
to $3,049 per year. If the pump is 100 hp, it rose
from $1,839 per year to $26,322 per year; and for
a 225 hp pump, it went from $2,506 annually to
KWUA also told producers that their operations and
maintenance fees would rise to run pumping
stations, for example, so irrigators with the
Klamath Project could actually see a 2,500 percent
farm expense increase.
William Jaeger, an economist with Oregon State
University, has calculated that farmers using
sprinkler irrigation will have annual costs rise
by $40 per acre.
For those who have been there for generations,
they aren’t taking these stark increases readily.
The Klamath Water Users Association is lobbying in
Washington, D.C., and urging that the Federal
Energy Regulatory Commission mandate that
reasonably low rates continue for irrigators in
the area, especially as PacifiCorp has applied to
FERC for relicensing.
KWUA and others are also attempting to influence
the Oregon Public Utility Commission about the
Why can’t PacifiCorp just extend the special rates
for farmers in the Klamath Basin?
According to PacifiCorp, the contract is set to
expire in 2006 and “in compliance with the
contracts, state law and regulatory policy” it
must discontinue the cheaper rates and proposes to
provide “our standard approved irrigation tariff
rates beginning April 2006,” the company said in
its letter to customers.
The company added that as a regulated utility
under the Oregon and California public utility
commissions, “we must charge all irrigators rates
based on the costs of generating and distributing
electricity as approved by their respective state
Klamath Basin producers are in a difficult
situation. They have a power company that is
probably eager to end the subsidy of $8 million to
$10 million per year from that area that currently
gets picked up by the rest of its customers. They
have state utility commissions that will be under
pressure to ensure that electricity rates be fair
throughout the state and no area receive
preferential treatment. And they will probably
also face fellow farmers within the state and
across the country who may not be as sympathetic
to them as they were when water was shut off in
2001 in the Klamath area.
This doesn’t mean they deserve such staggering
increases, no matter how long they were warned of
change or were aware the 50-year contract was
nearing an end.
The reality is that there will probably be less
support for their cause politically at the federal
or state level or from their peers at the
grassroots level who have paid higher rates than
them for years.
Will the ultimate decision-makers respect history
and century-old contracts and good faith? If the
courts become involved, as has been threatened and
is probable, there remains a wild card chance.
In the meantime, farmers will need to seriously
look at the options facing them.
Crops that require less water, altered watering
times, different irrigation methods, more
efficient equipment, solar energy or reduced use
of marginal land are some of the business
decisions farmers will consider to survive the
In this area in the rain shadow of the Southern
Oregon Cascade mountains, a large electricity rate
increase next year threatens to cast a long, dark
shadow on Klamath Basin’s agriculture.