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Power rate appeal denied
Off-Project group had sued PacifiCorp over rate increases
By TY BEAVER
H&N Staff Reporter
October 1, 2010
PacifiCorp terminated the contract it had with off-Project water users in 2004 and filed a request with state utility officials to raise the rate to one equal to the statewide rate for irrigators.
Klamath Off-Project Water Users sued PacifiCorp for breach of contract and breach of good faith but the appeals court ruled there was nothing holding the utility to the contract.
Court’s ruling
“…there is a
complete absence of wording in the agreement suggesting that the
terms of the agreement are perpetual; to the contrary, the
agreement was terminable at will,” the court’s ruling read.
Tom Mallams, president of the off- Project group, said he and his board of directors have not yet decided whether to request an appeal from the Oregon Supreme Court. He said his group wasn’t able to fully argue its case.
“We knew this was an uphill battle with this court,” he said.
Toby Freeman,
regional community manager for PacifiCorp, said the company was
glad to have the issue resolved so everyone involved could move
forward.
Similar issue
Steve Kandra, a Project irrigator, said a similar situation facing him and other Project irrigators led to other efforts to reduce power costs, including the organization of the Klamath Water and Power Agency and the development of Klamath Basin Restoration Agreement.
“We heard the (Public Utility Commission) say very clearly there’d be no subsidy for our power,” Kandra said.
PacifiCorp’s
predecessor, Copco, originally developed a power agreement with
off-Project irrigators in 1956.
Below-tariff rate
The irrigators, like their counter parts on the Project, were granted a below-tariff rate of about three-fourths of a cent per kilowatt-hour. The agreement was made because irrigators’ agricultural activity provided more water for Copco to run hydroelectric facilities on the Klamath River.
The Oregon Public Utility Commission eventually granted PacifiCorp’s request to raise rates, though they would be increased gradually over seven years.
By 2011, all irrigators in the Klamath Basin on the Oregon side will pay about 8 cents per kilowatt-hour.
Motion to dismiss
The Klamath County Circuit Court previously granted PacifiCorp a motion to dismiss the case, indicating off-Project irrigators failed to state a claim, leading to the appeal.
Mallams said the appeals court’s ruling was “strange,” as the judges would not allow his group’s attorney to argue the merits of its case.
Kandra said KWAPA would likely have been formed without the KBRA but the development of the KBRA provided a springboard for the organization. The organization works to generate revenue to help offset power costs of member irrigators.
“That option is still open to all individuals who want to participate,” he said.
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