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Plans for relieving Project irrigators from crippling power costs have come to a standstill.
“The situation on the
federal power is not getting any clearer,” Hollie
Cannon, executive director of the Klamath Water and
Power Association, said Tuesday at the association’s
August board meeting. “There are still a lot of
unknowns.”
Transition charge
At the July board meeting,
Dean Brockbank, vice president and general counsel of
PacifiCorp, announced the possibility of a 2- to 3-cent
per kilowatt-hour transition charge for irrigators who
switch from Pacific Power to federal Bonneville Power
Administration power deliveries.
“This transition charge of
2 or 3 cents on each kilowatt for up to five years is
basically a deal killer,” Cannon said.
Klamath Project water
managers began the move toward federal power deliveries
after a 50-year contract between the Project and
PacifiCorp expired in 2006. The contract guaranteed
irrigators a low power price, and after it expired,
power rates increased to standard rates.
Gary Derry, who is a member
of the KWAPA and Shasta View Irrigation District boards,
pointed out Shasta View’s power budget has increased
from $36,000 in 2005 to $532,080 in 2014. This year’s
figure is more than a half a million dollars despite at
least $500,000 in energy improvements that have been
made within the last five years, he said.
“That’s the reality of
what’s going on out here,” Derry said. “It’s absolutely
outrageous.”
Cannon said the proposed
transition charge is based on money PacifiCorp has
invested in the region. Revenue generated by the charge
is meant to recoup those costs and avoid transferring
additional costs to other PacifiCorp customers after
irrigators leave the corporation’s service area.
Two options
According to Cannon, the
KWAPA board has two options: One is to ask PacifiCorp to
file a tariff case with the Public Utility Commission.
He said PacifiCorp has agreed to not include a
transition charge in the tariff, but the PUC or other
industries could request the charge be included.
“That’s probably risky
because it’s pretty certain that somebody is going to
bring up the transition charge,” Cannon said.
The other option is to seek
legislation exempting Project irrigators from the
transition charge.
Derry told the KWAPA board
he has always believed the federal energy deliveries
would be secured through political action. But from a
KWAPA standpoint, Derry said, he thinks the board has
hit a brick wall.
“The staff here does not
have the capabilities, nor does it have the desire to
take on the legislative issue,” Cannon said.
“I do see this as a
roadblock. It’s a deal breaker for me at this point,”
Derry said.
Average cost
Board member Ed Bair said
he believes it’s going to be difficult to bring anything
to the Oregon or federal legislation that only benefits
a specific group of people. He pointed out the average
cost of a kilowatt-hour in the United States is 12.2
cents. He said Oregonians pay roughly 10.5 cents, and
Californians pay about 13 cents per kilowatt-hour, which
are both near the national average.
“If we were well above
average, I believe a legislative opportunity may be
there,” Bair said.
Cannon pointed out the
proposed transition charge is a temporary, 5-year fee.
“The question is: Does that
added expense for five years pay off in 15 or 20 years?”
Bair said.
Bair suggested keeping the
channels of communication open to see if the board can
develop other avenues of relief.
ljarrell@heraldandnews.com; @LMJatHandN
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