Klamath: 10 Years Later - 2:  Agriculture Faces Higher Electricity Costs

Todd Neeley DTN   Aug 16, 2011 Progressive Farmer

YREKA, Calif. (DTN) -- When Klamath Basin farmers found their water being turned off a decade ago to preserve fish, as directed by the Endangered Species Act and various court orders, they also learned a tough lesson.

A 2010 agreement on what happens with Klamath Basin water will lead to the removal of four dams, increasing farmer concerns about water availability and rising power costs. (Photo courtesy of Bobjgalindo, Creative Commons license) They got a glimpse of how many parties could claim interest in and ownership of the same water they planned to use for crop irrigation, and how those conflicting interests could affect them.

Ten years later, the issues around water, property rights and species protection have become even more complicated.

Many basin farmers believe environmentalists are using the ESA to drive them out of rural areas, and that the region has been used as a test case for future actions across the country. They say their story should serve as a warning to farmers across the country.

In 2001, the U.S. Bureau of Reclamation shut off irrigator access to the Upper Klamath Lake in the Klamath Irrigation Project of southern Oregon and northern California. The action centered on protecting three endangered fish species.

In the years that followed, discussions continued on what to do with precious water in the area.

Environmentalists, American Indian tribes, fishing interests, state government officials, project water users and others finally signed a Klamath Basin Restoration Agreement in 2010.

The almost-400-page document includes a controversial plan to remove four basin hydroelectric dams, sets a governance structure to make water decisions, establishes a drought plan, identifies funding and establishes fish restoration projects, among other things.

Not all farmers support the agreement. The involvement of two user groups, the Klamath Water Users Association and Tule Lake Irrigation District in California, represented less than 10% of farmers from the basin.

Yreka, Calif., farmer Rex Cozzalio also said many of farmers originally involved in Klamath Basin Restoration Agreement negotiations backed out when they had to agree to the dam removal.

Cozzalio said he believes that "effectively made the vast majority of ag unrepresented and intentionally subject to indeterminate shutdowns."

Farmers and some local government officials say the final 2010 agreement was a turning point -- that the document gave outside interests full authority to control water in southern Oregon and northern California.

Siskiyou County, Calif., Commissioner Marcia Armstrong said county officials had little say in the KBRA.

"Siskiyou County was cut completely out of the plan," she said. "We're being run over with a bulldozer. We're still discovering things we had no idea were in the agreement. It's like a new government extended over us and there's nothing we can do about it. Congress has not approved any of this."

Farmers fear they've lost available water in the future, depending on the water needs of area tribes and endangered species.

POWER LICENSE NOT RENEWED

The KBRA calls for the removal of four hydroelectric dams by 2020, sending a rush of water downstream for the first time in generations.

Off-project irrigators, those who were not part of the original Klamath River project, fear removal of the dams will lead to rising electricity rates, pushing agriculture out of the basin and to the release of toxic sediment that will endanger the ecosystem downstream.

Environmentalists believe removing the dams will result in improved runs for the endangered coho salmon.

Electricity has already become more expense. While the new Klamath agreement was being created, regional power provider PacifiCorp decided not to renew a 50-year dam license agreement with power users in the basin. That agreement had given users reduced electricity rates, but in 2006 PacifiCorp said it gave Klamath farmers an unfair advantage over others outside the basin.

While a 2005 Oregon Senate bill prevented PacifiCorp from raising power rates by more than 50% each year for the next seven years, that bill is near expiration. Without the measure, off-project farmers would have seen power rates jump overnight from 0.75 cents per kilowatt hour to 8.5 cents per kilowatt hour.

Irrigator power rates are going through the roof, users say.

Beatty, Ore., farmer Thomas Mallams, said one irrigator saw a rate spike from about $5,000 a year in 2005 to about $60,000 today.

"Some guys could do it, but a guy who has pasture ground -- no way," Mallams said.

MORE WATER FOR SALMON

Craig Tucker, Klamath coordinator for the Karuk Tribe, one of the stakeholders in the KBRA, said dam removal will be less expensive than re-licensing those dams and will help the endangered species.

"The other thing people say is we're going to lose irrigation water from the four dams," he said. "They (the dam) provide no irrigation supplies. There will be more water supply. Fish need certain flows at certain times of year. There is a lot less sediment behind the dams than people thought. The sediment is not toxic."

There is an increasing likelihood the Chinook salmon will be added to the list of endangered species in the region, adding more pressure to limited water resources.

The agreement stakeholders struck in recent years sets a cost cap of $450 million to remove the four dams. No more than $200 million would come from electricity customers. The plan is to not increase rates by more than 2%, which already has been eclipsed in many cases. In addition, the remaining $250 million would come from the sale of bonds in California.

The Siskiyou County, Calif., Water Users Association and Shasta Indian Nation offered possible alternatives to dam removal that have received little attention because of the KBRA.

BLOW TO AGRICULTURE

Higher power rates in Siskiyou County are likely to be an economic blow to agriculture.

Based on information from the U.S. Census Bureau, the California Department of Finance, Cal-Trans, California Counties Data Book and other reports, 19% of the county's population lives below the poverty line. Agriculture accounts for about 56% of the total economic output for Siskiyou County. Removing the dams is predicted to lead to a 14% decline in agricultural crop values by 2015.

Greg Addington, executive director of the Klamath Water Users Association, said power rates will determine the future of agriculture.

On Sept. 11, 1957, Congress ratified the Klamath River Basin Compact to manage water resources. Some farmers and government leaders say the compact still governs the basin.

There has been a massive push for federal funding to help project irrigators be more efficient with water, by installing high-pressure sprinkler systems and other equipment, since 2001.

Such systems use less water, but require more electricity; there is an increasing need for energy at a time when dams are likely to be removed. Without the dams, power supplies become scarce, Addington said, putting upward pressure on prices.

Geographical challenges will require agriculture to pay a heavy price because farmers have to pump water to survive in the basin. In some places farmers are likely to return to flood irrigating to save money, he said. Costs include the price of water, plus other fees to the irrigation district and to the Bureau of Reclamation for drainage pumps.

"The landowner pays three times," Addington said.

In addition, legal battles continue over who had rights to water in the basin. One of the criticisms of the KBRA is that it establishes water rights in the project although basin-wide adjudication is ongoing, Addington said.