June 9, 2007

Klamath Falls Herald and News

By Ty Beaver

Klamath Basin irrigators in Oregon are preparing for an increase in their power bills, while Pacific Power and irrigator advocates scramble to find a short-term solution to rising rates.

The loss of a half-cent credit to irrigators is the latest blow to agriculture in the Basin. The region is already under pressure from rising power rates and initiatives to increase water conservation.

“It’s one more thing piling on,” said Greg Addington, executive director of the Klamath Water Users Association.

Oregon irrigators declined to say how they would be affected by the loss of the credit, but a glimpse at the California side of the Basin where power costs also are increasing demonstrates what may eventually happen in Oregon.

A recent ruling from the 9th U.S. Circuit Court of Appeals determined that a credit provided to energy customers in the Pacific Northwest by the Bonneville Power Administration was illegal. That credit reduced project irrigator power costs by half earlier this year.

Pacific Power officials said the credit was offered as a way of spreading benefits of hydroelectric power across the state.

The court’s decision and resulting cost increase stem from litigation filed by regional public utilities. Officials with those utilities contended the credit, which only applied to customers of investor-owned utilities, gave companies such as Pacific Power unfair benefits.

Toby Freeman, regional community manager for Pacific Power, said he thinks the public utilities didn’t intend to completely eliminate the credit, they just thought it was worth too much. Now the money that would have been disbursed to the utilities will sit in an account.

“The issue isn’t that there is a credit, but how much is it worth,” Freeman said.

The loss of the credit is immediate, effective on bills charging for June power usage.

The effects of increasing power rates are beginning to show.

John Cross, president of the Newell Potato Cooperative, said more growers renting his land are resorting to flood irrigation because it requires little to no power. He purchased and is using diesel pumps despite the high cost of that energy source as well.

Addington said a similar situation could happen on the Oregon side of the Basin without the credit to help defray costs. Resorting to flood irrigation would reduce power costs, but strain the region’s already delicate water situation, and some parts of the Basin simply can’t do without powered irrigation.

Luther Horsley, a Midland irrigator, doesn’t know exactly how much the loss of the credit would affect his 1,000 acres of irrigated alfalfa and grain, but he knows it will increase his costs.

“It’s another added expense we’re going to have to deal with,” he said.

Freeman said Pacific Power and other utilities that received the credit have filed briefs with the court regarding the case but only BPA can ask for a rehearing of the case, and it is unclear how soon that would take place, if ever.

Addington said his organization is looking for options, such as forming a public utility district for irrigators or utilizing energy sources such as solar or low-head hydro in canals and ditches. But those measures would take time and money to implement, something the current situation does not provide.