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 PRESS RELEASE July 11, 2005

Senator Whitsett’s “Rate Shock” Bill Provides
Safety Net for Klamath Irrigators

SalemKlamath Basin irrigators were staring down the barrel of potential power rate increases of 1000 percent next year.  As of this morning Klamath irrigators can breathe a little easier thanks to final passage of a proposal that spreads the rate increase out over time.  While irrigators will still see sizable increases, the legislation provides a critical safety net and affords irrigators the time needed to adapt their management to the new rates. 

“The only way to describe what these hard-working Oregonians are facing is ‘rate-shock,’” said Senator Doug Whitsett (R-Klamath Falls).  “The reason this legislation goes to the Governor with such strong bi-partisan support is because legislators recognized the hardship of absorbing such a drastic rate spike at once and because the proposal takes a reasonable approach to providing relief.” 

The legislation, contained in House Amendments to Senate Bill 81, requires the Public Utility Commission to raise rates by no more than 50 percent each year for seven years.  At that rate of increase the irrigators will pay the full market rate on the seventh year. 

The current rates paid by the irrigators are the result of a contract that allowed private power companies to develop the Klamath River for power generation in exchange for providing low cost power to irrigators for the operation of their irrigation pumps.  While the power companies continue to receive the benefit of developing the Klamath River for power generation, they have declined to continue to provide low-cost power to the irrigators. 

“The rates paid by these irrigators are the result of a value given for value received exchange,” says Senator Whitsett.  “The value of the exchange continues to exist for the power companies and for all Oregonians who benefit from low-cost and efficient hydro-electric power.  The safety-net provided by this bill simply recognizes the hardship that will result from the end of this contract and attempts to provide reasonable mitigation.” 





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