[env-trinity] OPINION Jim McCarthy -End the electricity rate subsidy in the Klamath Basin

[Tom Stokely]

http://www.oregonlive.com/printer/printer.ssf?/base/editorial/1107522358244970.xml 
IN MY OPINION Jim McCarthy 
Friday, February 04, 2005 

End the electricity rate subsidy in the Klamath Basin 

This September, the Oregon Public Utility Commission will decide whether irrigators in 
the Klamath Basin will see the first increase in their electricity bills since 1917. Much 
has changed since then, but while pumping rates for other Oregon farmers have risen 
to about 5.5 cents a kilowatt-hour, Klamath irrigators have continued to enjoy rates 
between 0.3 cents and 0.7 cents per kilowatt-hour -- prices their 
great-great-grandfathers would have envied. 

This exclusive subsidy costs an estimated $10 million annually and comes directly out 
of Oregonians' pockets. When PacifiCorp customers pay their bills each month, they also 
pick up part of the tab for Klamath irrigation. Ironically, farmers along the Rogue and 
Deschutes pay more to ensure that Klamath irrigators pay next to nothing. 

To be sure, the subsidy isn't just for irrigators: Some of the area's wealthiest residents 
are in on the deal. Families in Pendleton pay higher electricity bills so an elite Klamath 
Falls country club with $3,000 membership fees and $2,500 in annual dues can enjoy 
perhaps the lowest golf course watering costs in America. 

The sweetheart deal is a relic of the Klamath Irrigation Project, a Bureau of 
Reclamation mega-development in Oregon's high desert. The subsidy began with a 
World War I-era agreement by PacifiCorp's predecessor to provide cheap electricity to a 
handful of farmers in exchange for operational control of a federal dam built to drain 
water from Upper Klamath Lake. 

Over the years, the Klamath Project burgeoned into a massive complex of canals and 
pumping stations sprawling across 220,000 acres. The power subsidy, intended as a 
temporary spur to development, ballooned into a multimillion-dollar burden for 
Oregon ratepayers that discriminated against other farmers. Though the sweetheart 
deal was originally set to expire in 1967, the political muscle of Klamath agribusiness 
interests won an extension, plus expansion of the irrigation subsidy throughout 
Klamath County. 

This subsidy lies at the root of the Klamath Basin's thorniest problem: the conflict over 
water. Certainly, some irrigators have worked to reduce water consumption. But for 
most, when water from area lakes and streams is free and electricity for pumping costs 
almost nothing, there is no incentive to conserve either resource. 

Water demand has grown far beyond what the system can support. Irrigation 
withdrawals have crippled the river, and low flows regularly spark salmon kills. This 
year, fishermen expect a closure of their Klamath-dependent salmon fishery from Coos 
Bay to Fort Bragg, a consequence of a devastating adult fish kill in 2002 that claimed 
some 70,000 salmon. Since 2001, heavy demand has also drained the wetlands of the 
Klamath Basin's national wildlife refuges during peak waterfowl migrations, leaving 
both birds and hunters high and dry. 

But relief is in sight for Oregon's ratepayers and the communities dependent on a 
healthy Klamath: The subsidy may soon expire. PacifiCorp has signaled it will cease 
operating the federal dam on Upper Klamath Lake and has moved to normalize 
Klamath power rates. Klamath agribusiness interests are again fighting against the 
change. 

The PUC should refuse demands to continue this discriminatory subsidy. Instead of 
asking others to subsidize water use and the accompanying economic and 
environmental damage, Klamath irrigators should support a federally funded golden 
parachute for subsidy-dependent farmland owners who wish to sell, and should reserve 
water saved in the process to support struggling fish and wildlife. 

Then all of the Klamath Basin's communities can equitably share the water they need 
to prosper. 

Jim McCarthy is a policy analyst with the Oregon Natural Resources Council in 
Ashland. 

Copyright 2005 Oregon Live. All Rights Reserved. 
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