Klamath Project A Canal

Water flows from Upper Klamath Lake into the A Canal, part of the Klamath Project. Two new draft reports look at ways to reduce the price of electricity within the project, where costs have soared.

KLAMATH FALLS, Ore. — The U.S. Bureau of Reclamation has released two draft reports seeking to curb rising power costs for farmers and ranchers in the Klamath Project.

For decades, water users in the 210,000-acre irrigation project purchased low-cost electricity from PacifiCorp in exchange for building and operating the Klamath River Hydroelectric Project, which includes J.C. Boyle, Copco 1, Copco 2 and Iron Gate dams.

Those contracts, however, expired in 2006, and since then power costs have soared by as much as 2,500% in some cases.

"Under the old power contract, (irrigators) were paying 0.3 to 0.75 cents per kilowatt-hour," said Mike Neuman, a natural resources specialist and special projects manager for the Bureau of Reclamation office in Klamath Falls. "They've really been hit with a large power cost increase, up to 20-fold."

The Klamath Project dates back to 1906 with the construction of the A Canal. Today, it includes 185 miles of canals and 490 miles of lateral ditches, providing water for more than 1,200 family farms in Southern Oregon and Northern California.

Unlike other Reclamation projects, the Klamath Project does not generate its own electricity. In 1917, the bureau allowed PacifiCorp's predecessor, the Oregon-California Power Co. — or Copco — to build the Link River Dam in exchange for selling low-cost power to irrigators.

The contracts were extended for another 50 years in 1956, when Pacific Power approached the Federal Energy Regulatory Commission for a license to operate the full Klamath River Hydroelectric Project.

In 2018, Congress passed the America's Water Infrastructure Act, requiring the bureau to come up with a plan for restoring affordable power. Regulators released two reports on Nov. 8 — one that compares power costs in the Klamath Project to those of similar projects across the Northwest, and one that looks at alternatives to lower costs.

The first study, dubbed the Power Cost Benchmark Report, found that irrigators on the Oregon side of the Klamath Project paid 9.7 cents per kilowatt-hour on average for electricity in 2016. On the California side, irrigators paid 12.9 cents per kilowatt-hour.

That is much higher than the benchmark of 6.002 cents per kilowatt-hour found elsewhere around the Northwest, putting farmers in the Klamath Project at a competitive disadvantage.

With the power cost benchmark clearly established, Neuman said the bureau can begin to focus on ways to bring Klamath Project costs closer in line with the benchmark. A second study, called the Affordable Power Measures Report, is fairly conceptual but does identify several potential cost-saving methods.

Some measures the report highlights include: development of small-scale and community-scale solar power installations; small hydroelectric projects; purchasing federally marketed power; irrigation equipment and energy efficiency upgrades; and negotiating directly with PacifiCorp for new purchase power contracts, similar to the old agreements.

Neuman said specific projects would require the bureau to conduct a separate feasibility study, but the Affordable Power Measures Report will help to lay the groundwork.

"I think we're going to be pretty well prepared to go forward and figure out how we're going to solve this problem," Neuman said.

Both reports are still in draft form, and the public has until Dec. 2 to comment. Neuman said he expects the bureau to complete its final reports by Dec. 13, which will then be sent to Washington, D.C.

"At that point, it will be up to Congress to determine what happens next," he said.

Members of the Klamath Water Users Association have worked closely with the bureau on the latest draft reports. Ben DuVal, KWUA vice president and power committee chairman, said the organization is happy with how the process has unfolded.

"Our congressional delegation gave us a great start by requiring this report," DuVal said. "We will need to take that roadmap and use it to get to where we need to be on affordable power."

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