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<H2>Klamath farmers, fish at crossroads</H2>
<H3>A utility's plan to end a longtime power subsidy could mean less water going
to agriculture.</H3>
<H4><A
href="http://www.sacbee.com/content/politics/story/12474256p-13330164c.html">http://www.sacbee.com/content/politics/story/12474256p-13330164c.html</A></H4>
<H4>By David Whitney -- Bee Washington Bureau<BR><I>Published 2:15 am PST
Sunday, February 27, 2005</I></H4>WASHINGTON - Through sickness and health,
drought and abundance, Klamath basin farmers have been wedded to dirt-cheap
power for nearly nine decades.
<P>Electric pumps lift water from an underground aquifer, help pull it from
lakes and canals, spray it over some 450,000 acres of crops and then push the
agricultural overflow back uphill from Tule Lake to the Upper Klamath National
Wildlife Refuge, to start the process again.
<P>But there's trouble afoot, and this once-happy union of power and water, in
the largest battleground over the federal Endangered Species Act in the country,
is on the brink of dissolution.
<P> </P><FONT color=#003366><FONT color=#000000></FONT><IMG height=2
src="http://ads.sacbee.com/RealMedia/ads/adstream_lx.ads/www.sacbee.com/content/politics/1678996675/Button20/Sacbee/cafamfit_336_ros_feb_5/cafamfit_336x280_29mem.html/34303339366235623431666462616630?_RM_EMPTY_"
width=2></FONT> Portland, Ore.-based PacifiCorp, whose vast six-state service
area includes the Klamath basin, overlapping southern Oregon and Northern
California, wants to end subsidized power rates next year for 1,300 irrigators
that have been virtually unchanged since the power started flowing in 1917.
<P>The impact will be costly to all, and devastating to many.
<P>Rates will go from 0.6 cents to more than 6 cents per kilowatt-hour - a
tenfold increase.
<P>The Tulelake Irrigation District in Northern California, for example, has
been told that its annual power bill is expected to rise from about $70,000 in
2003 to $1.05 million in 2006, said Ed Danosky, general manager.
<P>Farmers are screaming about economic disaster and broken promises.
<P>"People are going to suffer," said Steve Kandra, president of the Klamath
Water Users Association, who said he believes many will resort to more wasteful
irrigation flooding that uses a lot less juice.
<P>But others see market-based power rates for irrigators as the much-needed
catalyst for resolving entrenched conflicts between agriculture and fish. The
irony is that by leaving it to market forces rather than government, they say,
fish and farmers could end up healthier.
<P>Especially in the hillier portions of the basin in Oregon, where sprinkler
irrigation is dominant and flood irrigation impractical, high power rates can be
an incentive to forgo farming on marginal lands.
<P>"If even 40,000 acres of these most marginal lands went out of production,
using a rule of thumb of 2.5 acre-feet of water per acre, that's 100,000
acre-feet of water returned to the system," said Jim McCarthy of the Oregon
Natural Resources Council.
<P>Oregon State University economist William Jaeger said salmon could be the
beneficiary of weeding out the marginal operators. But the vast majority of
farming operations should do just fine despite the high power rates, he said,
and the payoff for them would be a reduced threat of losing water deliveries
during dry years when fish need them more.
<P>"I see a potential for a compromise on a middle ground solution to problems
in the upper basin," said Jaeger, who has extensively studied the Klamath basin
and its intractable conflict over water.
<P>The dispute is over who should have priority to receive water when it's in
short supply - farmers, who were lured to the basin nearly a century ago by
government water policy, or endangered suckerfish and salmon whose declining
health has devastated a cultural and economic way of life along the Klamath
River all the way to the Pacific Ocean and beyond.
<P>Glen Spain, Northwest regional director of the Pacific Coast Federation of
Fishermen's Associations, said the dispute is a classic supply-and-demand
situation and that applying market-based rates for the power that runs the
irrigation network could begin to even the scales.
<P>"Is this a magic bullet?" he asked. "No, but it will sure help."
<P>On the surface, these are not issues that concern PacifiCorp. Its decision to
end the subsidies is a simple business issue, the company said, not some grand
altruistic search for a solution to the Klamath basin's water wars.
<P>"Let's not pretend this is going to be easy on people," said Jon Coney, a
PacifiCorp spokesman. "We are doing everything in our power to help these
customer groups through this."
<P>But the timing of the company's decision to end the subsidies adds to the
complexity, and the suspicions.
<P>The company's 50-year license to operate its Klamath hydroelectric projects
expires next year, and in relicensing proceedings before the Federal Energy
Regulatory Commission the company is under pressure to do more to protect
downstream fish, including taking down dams.
<P>While cheap power has been associated with the relicensing, PacifiCorp
regards them as separate processes, adding that state law now prohibits the
renewal of the special irrigator rates.
<P>"We are a cost-of-service utility," he said, and the company can't offer one
subset of customers a special deal that its 1.6 million other customers absorb.
<P>"We will come out of this financially neutral," Coney said.
<P>But Kandra, of the Klamath Water Users Association, charged that PacifiCorp
is reneging on a commitment it made for the right to generate power in the
basin.
<P>"It shouldn't be acceptable to anyone in the United States that a utility
gets the run of a river and does not compensate the people who provide them that
run," he said.
<P>Kandra also disputed claims that fish were going to benefit from the pain of
irrigators, all of whom are family farmers rather than big industrial
operations. It's the irrigators who pay to move water throughout the basin, he
said, and its eventual return to the Upper Klamath National Wildlife Refuge
helps fish and waterfowl.
<P>"Salmon and the wildlife refuges are going to suffer, too," he said. "If
you're trying to strike at the heart by bankrupting a bunch of farmers, you will
be disappointed in the results. This will make things worse, not better. It's a
giant step backward."
<P>Jaeger, however, said the plan could hold more promise.
<P>An analysis he did for Oregon State University's extension service concluded
that farmers who irrigate their lands by sprinkler could expect annual costs to
rise by $40 an acre, perhaps encouraging more efficient low-pressure systems.
<P>But for marginal operations, he said in the report, loss of profitability
would create new incentives for selling water rights, thus creating an important
new tool to relieving the demand side of the equation.
<P>And that, he said, could mean "lower-cost solutions to the region's water
conflicts, thereby reducing the potential harm to the region's overall
agricultural economy."
<P>The Klamath Water Users Association and others are fighting the proposed rate
increases before the Oregon Public Utility Commission in a rate case that has
drawn environmentalists and fishermen to the utility's side. Soon a new rate
case will begin in California.
<P>There's a chance that in the settlement talks over relicensing PacifiCorp's
hydroelectric operations the rate increases would be modified.
<P>But Danosky, whose Northern California irrigation district could be hit the
hardest, said he is convinced the good times are ending for irrigators.
<P>"This is a business deal," he said of PacifiCorp. "It's a contract. It has
been 50 years. And it's been a heck of a deal."
<P>
<BLOCKQUOTE class=atw>
<H4>About the writer:</H4>
<UL>
<LI>The Bee's David Whitney can be reached at (202) 383-0004 or <A
href="mailto:dwhitney@mcclatchydc.com"><FONT
color=#003366>dwhitney@mcclatchydc.com</FONT></A>.
</LI></UL></BLOCKQUOTE></FONT></DIV></BODY></HTML>