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2/3/2006 6:00:00 AM 
PacifiCorp, which began generating electrical power from its Copco No. 1 plant on the Klamath River in 1918, last week got Federal Energy Regulating Commission permission to junk agricultural power rates that began when this plant went on line.

Klamath electric rates are down to the wire

Tam Moore
Capital Press Staff Writer

Farmers in the U.S. Bureau of Reclamation Klamath Project, who last week learned a federal agency doesn’t want to continue discount electrical rates, are cheering as the case goes back for a rehearing.

At stake are discount rates for agricultural pumping in those parts of Northern California and Southern Oregon lying within the original service area of the 1905 project. About 1,300 farms and ranches, plus irrigation districts and the massive government pumping system that shifts waters into national wildlife refuges, benefit from the deal. The special power rates – originally tied to use of project water to generate hydropower – are part of a contract expiring April 16.

The deal, first made in 1917, and extended for one 50-year term in 1956, sets a 0.5-cent-per-kilowatt-hour rate on project croplands, and 0.75 cent per kwh beyond immediate project irrigated areas. Klamath Water Users Association has estimated that with all load charges PacifiCorp, the power company, would actually get a 2,500 percent increase from some users. The proposed rate, before load charges, is 5.5 cents per kwh. The rate schedule is before utility commissioners in Oregon and California.

“We’re not done yet. There are a lot of forums open. We have several viable options,” Scott Seus said by telephone from San Francisco, where he’s negotiating with the California Public Utility Commission on a multi-year phase-in if the new rates become reality. Seus heads the KWUA power committee and farms in the project near Newell, Calif.

The Federal Energy Regulatory Commission, which is hearing PacifiCorp’s request for a new 50-year license on the company’s Klamath generating plants, on Jan. 19 ruled that the discount power contract isn’t part of the license. The U.S. Department of Interior, on behalf of BuRec, last year asked the FERC to link the electricity contract to the hydro licenses.

PacifiCorp has argued for several years that the contract is separate. Interior last week said it will appeal the FERC determination.

“We support the request for a rehearing,” Seus said Jan. 30 as he waited for the first meeting with PUC officials. Users had four days of telephone conference with PUC parties as a run-up to this week’s formal meetings. Dave Kvamme of PacifiCorp said he believes California will order a rate phase-in similar to that in Oregon.

In a 2005 law, Oregon’s Legislature mandated a seven-year phase-in of new rates should the farmers lose with the FERC.

The expiration date for the licenses and the contract is April 16. But parties don’t expect that final terms and conditions for the Klamath license will actually be ready then. Kvamme said in complex relicensing such as this, the FERC routinely extends terms of the old license for one year while parties sort out their differences. The FERC order says there’s no expectation relicensing will be complete this year.

Interior’s rejected petition asked the FERC to say that if the Klamath license goes into one-year renewal periods, the electricity contract goes right along with it. The 13-page FERC decision comes down to decoupling a federal water use charge that had been paid for with bargain-basement electrical rates, from operation of Link River Dam at Klamath Falls. It’s the main diversion point for BuRec project water.

“Nothing in the 1954, 1956 or 1957 orders indicates that the FPC (Federal Power Commission, predecessor to the FERC) intended to tie the government dam use charges to the licensee’s retail rates beyond the expiration date of the original license,” the commission ruled.

Parties to the FERC order read like a who’s who of Klamath Basin stakeholders. Supporting Interior and the irrigators are the Karuk and Yurok tribes with downstream treaty fishing rights below the last hydro dam. Opposing it are the Hoopa Valley Tribe with treaty rights on the Trinity River – the Klamath’s largest tributary – along with Trout Unlimited, American Rivers, WaterWatch of Oregon, Oregon Natural Resources Council and the Pacific Coast Federation of Fishermen.

The opponents argue that if pumping costs rise dramatically, farmers will stop much of their irrigation, allowing more water to flow downstream.

Meanwhile, Seus, who has lived his whole life in the Klamath Basin, has had lots of time to think about probable impacts if those electricity rates go up. First, he said, a lot of the acreage is in pasture, and with strong cattle markets there’s not likely to be an immediate reduction in pasture irrigation demand. Neither, Seus said, are hobby farmers likely to trim their pumping.

For row-crop farmers, Seus predicted there will be shifts to water-efficient technology. Those systems reduce or eliminate tailwater. That, he said, means there will be far less water returned to refuges and downstream on the Klamath.

“I don’t think it will do what the environmentalists hope it will,” Seus said.

Tam Moore is based in Medford, Ore. His e-mail address is tmoore@capitalpress.com.




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