The issue of soon-to-expire contracts between PacifiCorp and Klamath Basin farmers will be decided as part of the company's general rate case, the Oregon Public Utility Commission decided Tuesday.

For almost 50 years, PacifiCorp has served irrigators located in the Klamath Basin under two historic contracts that provide rates well below what other irrigators in Oregon served by PacifiCorp pay.

PacifiCorp had requested that the commission issue a summary judgment terminating both on-project and off-project contracts, effective April 16, 2006 . After that date, PacifiCorp proposes charging the Klamath River Basin irrigators the same rates paid by other PacifiCorp irrigation customers.

In its order the commission concluded PacifiCorp's requested ruling is unnecessary because the commission does not have to determine that the contracts have expired before it can determine what rates irrigation customers should pay.

Regardless of the expiration term of either contract, the commission said it has the duty to examine the irrigator rates as part of the company's general rate case.

The issue will be investigated further as part of PacifiCorp's general rate case request. The investigation will address the factual and legal issues that are relevant to determining rates for irrigation customers currently served under the historic contracts.

These issues include: the statutory standard applicable to the setting of electric rates for irrigators located within the Klamath River Basin; the appropriate rates PacifiCorp should charge the Klamath River Basin irrigators for electric service; and the implementation of any rate change affecting these customers, including how and when these customers should be transitioned from the rates established in the historical contracts.

A commission decision in PacifiCorp's general rate case, in which it seeks an overall 12.5 percent increase, is expected no later than Sept. 12.  

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