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Our Klamath Basin Water Crisis
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November 25, 2005

Ms. Magalie R. Salas
Federal Energy Regulatory Commission
888 First St. N.E.
Washington D.C. 20426


Dear Ms. Salas,

On behalf of the Klamath County citizens of Senate District 28 I urge the Federal Energy Regulatory Commission to continue all terms and conditions of any annual extension of PacifiCorp’s license to operate Project 2082 including contract power rates for both on project and off project irrigators. As you are aware, the 1956 Contract between PacifiCorp and the Department of Interior Bureau of Reclamation is an integral condition on the utility’s original license for Project 2082. The contract represents a value given for a value received agreement that was essential to the original settlement for both parties. The Bureau of Reclamation agreed to exchange the right to affordable power for irrigation pumping for the Bureau and its patrons for the right for the utility to use the run of the river falling water for hydroelectric generation. The Federal Power Act at Section 15(a)(1) states "the commission shall issue from year to year an annual license to the then licensee under the terms and conditions of the existing license….". The terms of the agreement have not changed materially and neither should the terms and conditions of any license extension.

I sponsored and managed the development of Oregon Senate Bill 1058 which was subsequently included in Oregon Senate Bill 81 as the adopted dash three amendment. These amendments, which included the rate shock language in its entirety, were strongly supported by PacifiCorp. It is my understanding that PacifiCorp is now alleging that the rate shock language in Oregon Senate Bill 81 constitutes a negotiated agreement between PacifiCorp and the irrigators regarding contract power rates for irrigation. Contrary to that allegation, Senate Bill 81 is clearly intended by all parties to be a safety net for phasing in a power rate change only in the event that the contracts are neither extended or renewed. Shawn Miller testifying on behalf of PacifiCorp at the May 23, 2005 Oregon House hearing on Senate Bill 81, introduced the dash three amendments with Klamath Off Project Water Users’ attorney Matt Perkins. Mr. Miller testified that these amendments would only apply in the event that the contracts were not extended or renewed, and further, that the rate shock language in no way compromised or jeopardized any party’s rights or positions regarding the existing contracts. Testifying at that same hearing Klamath Water Users Association Executive Director Greg Addington reiterated that the rate shock language was only intended to mitigate a rate increase in the event that the contracts were not renewed or extended. I repeated essentially the same statements in my Senate floor speech in support of Senate Bill 81. The legislative record clearly states that the rate shock language amended into Senate Bill 81 was never considered, or intended to represent, a settlement on irrigation power rates.

Ironically, both John Devoe testifying on behalf of Water Watch of Oregon and Jay Ward testifying on behalf of the Oregon Natural Resources Council strongly opposed Senate Bill 81. They testified that irrigation power rates should immediately be adjusted to usual tariff rates in order to be fair to other rate payers and to reduce the amount of water pumped for irrigation by the Project and Off Project irrigators. In view of that testimony, their current support and representation of Senate Bill 81 as a fair settlement for irrigation power rate adjustment appears at best disingenuous.

I urge the Federal Energy Regulatory Committee to expedite its decision. That decision is essential for the local agricultural community and related businesses. Farm and ranch budgets, bank loans and procurement of agricultural inputs must be secured well before the expiration of the license. FERC’s decision will be seminal to many of these management decisions.

Best regards,

Senator Doug Whitsett
Senate District 28
23131 North Poe Valley Road
Klamath Falls, Oregon, (7603




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