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Irrigators seek $86 million in lawsuit

November 30, 2006 Herald and News

A group of Klamath Basin water users filed suit in Klamath County Circuit Court against PacifiCorp Wednesday, asking for $86 million in damages for violating a 1956 contract on power rates.

Klamath Off-Project Water Users, Inc. say the company's increase in power rates last year violated a contracted promised rate. The lawsuit is the latest in a series of events that stem from increasing energy costs to irrigators.

“People are going out of business,” said Edward Bartell, president of Klamath Off-Project Water Users.

Dave Kvamme, spokesman for PacifiCorp, said he would refrain from commenting because the company was not yet served with the lawsuit and did not know the details.

PacifiCorp has 30 days to respond to the lawsuit after being served.

Irrigators both on and off the Klamath Project were subject to a fixed rate for the past 50 years based on agreements with the power company.

For off-project irrigators, the agreement outlined a set rate of about 7.5 mills, or 0.66 cents, per kilowatt in exchange for increase flows irrigators provide to the Klamath River, which the company uses to produce hydroelectric power.

The contract with on-project irrigators expired in April, setting the stage for the company to begin raising on-project rates to about 70 mills, or 7 cents, per kilowatt.

PacifiCorp also requested the Oregon Public Utility Commission terminate the company's agreement with off-project irrigators at the same time. The commission did not terminate the agreement, but allowed PacifiCorp to begin raising off-project rates to the same rate as on-project irrigators.

Bartell said because the agreement does not have an expiration date and cannot be voided by the commission that PacifiCorp cannot change power rates to off-project irrigators. The state commission as well as Federal Energy Regulatory Commission also indicated the agreement does not have an expiration date, he said.

“We had tried, obviously, to negotiate, but people's bills are going up and we can't wait any longer,” Bartell said.

-Ty Beaver
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