local groups work to lower irrigation costs klamath kbra 121213

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Local groups work to lower irrigation costs

by LACEY JARRELL, Herald and News 12/12/13

The farm founded by Rodney Cheyne’s great-grandfather celebrated 100 years of agriculture and livestock production in the Klamath Basin in 2009. The family has produced grain, hay and livestock over the years, but is now being forced to rethink its business strategy due to increased water rates through Klamath Irrigation District in 2014 and ever-rising power costs.

“In 2000, it took one unit of hay — about three tons — to pay the power bill. Now it takes dang near three truckloads, which is 75 tons of hay or better,” said Cheyne. “They’ve essentially made it so some aspects of Klamath agriculture are no longer going to be feasible.”

The Klamath Reclamation Project power rate, or tariff, was set by the Oregon Public Utility Commission in 2006 after a 50-year contract between the U.S. Department of Interior, the Bureau of Reclamation and PacifiCorp expired, and legally could not be renewed, PacifiCorp spokesman Bob Gravely said in an email.

Since then, power costs have significantly increased from the fractions-of-a-penny rate irrigators were paying before the contract expired. Through Pacific Power, Oregon irrigators now pay 11 cents per kilowatt hour; California irrigators pay 13 cents per kilowatt hour.

Easing tariffs

A Klamath Basin Task Force subcommittee, the Federal Power Delivery Workgroup, has been working to ease tariffs for all irrigators through a three-step process, beginning with an interim program to cushion costs while the two long-term goals — federal power and renewable energy — are pursued. The Klamath Basin Task Force was directed by Sen. Ron Wyden last year to develop a water management plan for the Upper Klamath River Basin, lower federal costs for settlement agreements and address the affordability of agricultural power rates.

Greg Addington, executive director of the Klamath Water Users Association, said many farmers and ranchers have been getting by, even with high electricity prices, because commodity prices have been good, but, he quickly pointed out, those prices won’t last forever.

“At some point it’s going to be the straw on the camel’s back,” he said.

Private to federal energy

Approval for federally funded renewable energy programs, such as solar power installations, is required from Congress. Approval is also needed to switch power from commercial PacifiCorp to Bonneville Power Administration, a federal energy supplier. The BOR has the ability to supply purchased federal power now to on-project irrigators, but off-project irrigators will have to wait for congressional authorization, according to Addington.

“There’s an extra hoop to jump through to include the off-project irrigators,” he said.

The final report draft, released Dec. 3 at the last task force meeting, said federal legislation must be drafted and approved by Congress before July 1, 2014, to lock in the best federal power rate for onand off-project irrigators.

“Without federal legislation, there’s a real limit to what can be done,” task force facilitator, Ed Sheets, said.

The bill will be modeled after the legislation Sen. Jeff Merkley introduced following the 2010 Klamath Basin Restoration Agreement settlement. The KBRA and the related Klamath Hydroelectric Settlement Agreement seek to establish reliable water supplies and affordable power rates for irrigators, restore fish habitat, help the Klamath Tribes acquire the 92,000-acre Mazama Tree Farm and remove four dams on the Klamath River.

Addington said even if the power legislation is not approved by the July deadline, he hopes what has been done by the date will be enough to show the committee’s good faith to finalize the program and that it will be allowed reserve a low tier rate from BPA.

“It’s going to be a challenge to get that done,” he said. “We’re trying to do whatever we can today to get the ball rolling.”

Tiered rates

The least expensive Bonneville Power Administration Tier 1 rate of 3.3 cents per kilowatt hour is available until July. The Tier 2 rate, about 4 cents per kilowatt hour, is only available for 18 months after that, before rates are re-evaluated and likely increased as part of a biennial review process.

Power contracts are long-term service agreements, for up to 20 years, but service prices are subject to change each rate period, which is two years. The current rates are applicable for 2014-15, said Teresa Waugh, a BPA spokeswoman, in an email.

But even if the rate was locked in at the current low federal price, it would not be the final cost to consumers.

“Some of the preliminary analysis is showing costs are higher than anticipated,” said Klamath Basin Task Force facilitator Ed Sheets.

The tier rates are wholesale prices and only cover costs to deliver the electricity to a substation in Malin. Once power reaches Malin, it will be transmitted along cables and infrastructure owned by Pacific Power, meaning the company can tack on additional metering charges. Even though the charges may only be pennies, they could drive the new price near what irrigators pay now, according to Greg Addington, executive director of the Klamath Water Users Association.

“You start eating away at any federal benefit you may get,” he said.

As of now, irrigators are charged separately by Pacific Power for residential and irrigation electricity. Addington said the final legislation could retain this distribution structure to allow Pacific Power to provide residential service, while BPA-generated power is offered for irrigation. However, BPA will require its own billing meters to deliver real-time information, rather than requiring meters to be read manually.

“When you consider the number of meters on the project; it gets challenging. We’ve been trying to unscramble that egg and figure out how it will work,” Addington said, emphasizing the federal power program is only a portion of the long-term plan to reduce power costs to irrigators.

Sheets said the goal is to find the best mix of engineering, technology, and economics to provide the most benefits.

If all goes according to plan, he estimates Oregon irrigators could begin receiving federal power from Bonneville as soon as Oct. 1, 2015. He did not have a date for California irrigators, who would receive federal power from Western Area Power Administration.

“We need to figure out what exactly it is that is going to get people where they want to be,” Bob Gravely, spokesman for PacifiCorp, said. “I think we’re looking for clarity on what the end-game looks like and how we get there.”

“It’s not clear how far this needs to develop before legislation can move,” he said.

Working through details

The committee is currently working through service details required by BPA, such as demonstrating the BOR has authority to purchase the power and proving it has a way to take the power, deliver it and pay the BPA.

“There’s a lot of work that has to be done on the federal power side, but to get full benefits is to get legislation done so people can move forward,” Sheets said.

Addington pointed out the subcommittee is comparing the costs of continual Pacific Power rate increases with the costs of infrastructure upgrades that would be required to switch to federally generated power. Success, Addington said, will be based on many components of the community, not just agriculture.

“It’s important for refuges to get what they need, too. Not only do they need to have access to water, but they need to be able to pump it where it needs to go,” Addington said.

According to the final report draft, PacifiCorp will need approval from the Oregon and California public utility boards before a federal power program can be implemented.

The Federal Power Delivery Workgroup subcommittee consists of representatives from the Department of Interior, Bureau of Reclamation, Bonneville Power Administration, Western Area Power Administration, PacifiCorp, Klamath Water Users Association, and the Klamath Water and Power Agency.

ljarrell@heraldandnews.com ; @LMJatHandN

H&N file photo by Steven Silton

Cattle in the Modoc Point Irrigation District graze on a quickly drying field.

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