Utility board pulls plug on power grants on Klamath

By Terence Chea, Associated Press
April 14, 2006

SAN FRANCISCO -- State utility regulators voted Thursday to phase out electricity subsidies for California farmers along the Klamath River, a move anglers and environmentalists hope will help save struggling salmon.

The five-member Public Utility Commission voted unanimously to raise electricity rates over the next four years for farmers who pump irrigation water out of the Upper Klamath Lake, the reservoir that feeds the river.

The commission's vote follows the Oregon Public Utility Commission's decision Wednesday to implement a state law spreading the rate increase for farmers on the Oregon side of the river over the next seven years.

By making irrigation more expensive, anglers and conservationists hope farmers will use less water, leading to higher flows. In recent years, low flows have resulted in dwindling stocks of Chinook salmon.

Last week, federal regulators voted to practically shut down about 700 miles of the West Coast to commercial salmon fishing this season to spare fish that return annually to the Klamath to spawn.

"The return to a level playing field for irrigation in the basin will encourage more efficient water use, and that will have positive effects on flows in the river and help salmon," said Jim McCarthy of the Oregon Natural Resources Defense Council. "The subsidized rates basically encouraged waste and allowed irrigation on marginal land."

Klamath farmers still hope to persuade regulators they should qualify for below-market rates, but are generally satisfied with the decisions in California and Oregon, said Greg Addington, who heads the Klamath Water Users Association, which represents about 1,400 farmers in both states.

"We're not going to have guys go out of business this irrigation season because their rates are going through the roof," Addington said. "If we didn't have this transition plan in place, some guys would be paying up to 2,600 percent more next week."

Salmon fishers and environmentalists have been fighting with farmers for years over water allocations in the Klamath, and the bargain-basement rates farmers paid for electricity to pump that water have been a long-standing issue.

Authorized in 1905, the Klamath Reclamation Project provides water for about 1,000 farms on about 180,000 acres straddling the border, where farmers have received subsidized electricity rates since 1917.

While most Western water projects created by the federal government provide cheap electricity with their own dams, the Klamath Reclamation Project turned that responsibility over to the California & Oregon Power Co., which has been taken over by PacifiCorp.

As part of the deal, the utility gave farmers a cut rate. The latest contract expires Sunday, and PacifiCorp declined to renew it, arguing they were losing millions of dollars a year.

Klamath farmers in Oregon and California have been paying rates that are less than one-tenth of what other irrigation customers pay, said Dave Kvamme, a spokesman for Portland-based PacifiCorp.

PacifiCorp worked with the utility commissions and farmers to develop transition plans so that the farmers would not suffer "rate shock" when the contract expired, Kvamme said.