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<P>IN MY OPINION Jim McCarthy <BR>Friday, February 04, 2005
<P><B>End the electricity rate subsidy in the Klamath Basin</B>
<P>This September, the Oregon Public Utility Commission will decide whether
irrigators in <BR>the Klamath Basin will see the first increase in their
electricity bills since 1917. Much <BR>has changed since then, but while pumping
rates for other Oregon farmers have risen <BR>to about 5.5 cents a
kilowatt-hour, Klamath irrigators have continued to enjoy rates <BR>between 0.3
cents and 0.7 cents per kilowatt-hour -- prices their
<BR>great-great-grandfathers would have envied.
<P>This exclusive subsidy costs an estimated $10 million annually and comes
directly out <BR>of Oregonians' pockets. When PacifiCorp customers pay their
bills each month, they also <BR>pick up part of the tab for Klamath irrigation.
Ironically, farmers along the Rogue and <BR>Deschutes pay more to ensure that
Klamath irrigators pay next to nothing.
<P>To be sure, the subsidy isn't just for irrigators: Some of the area's
wealthiest residents <BR>are in on the deal. Families in Pendleton pay higher
electricity bills so an elite Klamath <BR>Falls country club with $3,000
membership fees and $2,500 in annual dues can enjoy <BR>perhaps the lowest golf
course watering costs in America.
<P>The sweetheart deal is a relic of the Klamath Irrigation Project, a Bureau of
<BR>Reclamation mega-development in Oregon's high desert. The subsidy began with
a <BR>World War I-era agreement by PacifiCorp's predecessor to provide cheap
electricity to a <BR>handful of farmers in exchange for operational control of a
federal dam built to drain <BR>water from Upper Klamath Lake.
<P>Over the years, the Klamath Project burgeoned into a massive complex of
canals and <BR>pumping stations sprawling across 220,000 acres. The power
subsidy, intended as a <BR>temporary spur to development, ballooned into a
multimillion-dollar burden for <BR>Oregon ratepayers that discriminated against
other farmers. Though the sweetheart <BR>deal was originally set to expire in
1967, the political muscle of Klamath agribusiness <BR>interests won an
extension, plus expansion of the irrigation subsidy throughout <BR>Klamath
County.
<P>This subsidy lies at the root of the Klamath Basin's thorniest problem: the
conflict over <BR>water. Certainly, some irrigators have worked to reduce water
consumption. But for <BR>most, when water from area lakes and streams is free
and electricity for pumping costs <BR>almost nothing, there is no incentive to
conserve either resource.
<P>Water demand has grown far beyond what the system can support. Irrigation
<BR>withdrawals have crippled the river, and low flows regularly spark salmon
kills. This <BR>year, fishermen expect a closure of their Klamath-dependent
salmon fishery from Coos <BR>Bay to Fort Bragg, a consequence of a devastating
adult fish kill in 2002 that claimed <BR>some 70,000 salmon. Since 2001, heavy
demand has also drained the wetlands of the <BR>Klamath Basin's national
wildlife refuges during peak waterfowl migrations, leaving <BR>both birds and
hunters high and dry.
<P>But relief is in sight for Oregon's ratepayers and the communities dependent
on a <BR>healthy Klamath: The subsidy may soon expire. PacifiCorp has signaled
it will cease <BR>operating the federal dam on Upper Klamath Lake and has moved
to normalize <BR>Klamath power rates. Klamath agribusiness interests are again
fighting against the <BR>change.
<P>The PUC should refuse demands to continue this discriminatory subsidy.
Instead of <BR>asking others to subsidize water use and the accompanying
economic and <BR>environmental damage, Klamath irrigators should support a
federally funded golden <BR>parachute for subsidy-dependent farmland owners who
wish to sell, and should reserve <BR>water saved in the process to support
struggling fish and wildlife.
<P>Then all of the Klamath Basin's communities can equitably share the water
they need <BR>to prosper.
<P>Jim McCarthy is a policy analyst with the Oregon Natural Resources Council in
<BR>Ashland.
<P>Copyright 2005 Oregon Live. All Rights Reserved.
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