Klamath Basin Irrigators' Cost for Electricity Going Up
By Michael Milstein, Oregonian
April 13, 2006

Oregon regulators ordered Klamath Basin farmers on Wednesday to pay more for power that runs their pumps, a move that environmentalists say will foster conservation and leave more water in rivers where it will help troubled fish.

The electric rates will increase roughly tenfold over the next seven years to match what other Oregon farmers pay. That may make it too costly for farmers to keep pumping water onto marginal farmlands in the arid basin on the Oregon-California line.

But the Oregon Public Utility Commission left the door open for farmers to seek rate credits that might help keep their costs down. Farmers contend their management of the basin's water helps hydroelectric dams operated by PacifiCorp generate more electricity, benefiting the company and its ratepayers.

Farmers have not proven that they should get a payback in the form of lower rates, the Public Utility Commission said in a decision Wednesday. But they'll have a chance to try.

Klamath farmers have long enjoyed inexpensive electricity under a 1917 contract with PacifiCorp's predecessor. But that contract expires Sunday. Farmers, PacifiCorp and environmental groups have grappled for months over how much more farmers should have to pay, and how soon they should pay it.

The decision from the Public Utility Commission comes just as salmon fishing seasons have been sharply curtailed because of failing returns linked to poor conditions in the Klamath River. Klamath farmers draw much of their irrigation water from Klamath River flows.

The Oregon Legislature required that higher rates be phased in to keep farmers from facing "rate shock."

Farmers now pay six-tenths of a cent per kilowatt hour. That will rise to .82 of a cent in the first year, and will keep rising at a steady rate to match what other farmers pay around the state -- unless farmers can show they deserve a rate credit. Other farmers now pay 6.98 cents per kilowatt hour, or more than 10 times as much as Klamath farmers.

Even with the initial rate increase over the next year, it will cost PacifiCorp $1.7 million to supply Klamath farmers with electricity at less than the going rate. That cost is to be shared by other Oregon ratepayers.

Scott Seus, who grows horseradish in Tulelake, Calif., said the gradual rate increase in the first few years "is something we can live with" while farmers pursue rate credits.

But conservation groups said farmers will now have to face real-world market forces that should encourage more efficient and sparing use of water that is in short supply. "It levels the playing field," said John DeVoe of WaterWatch of Oregon.

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