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Power deliveries yet to be finalized. Group will explore innovative avenues for cheaper power

by LACEY JARRELL, Herald and News 11/6/14

A new process is underway to identify what irrigators bargained for in the Klamath Basin Restoration Agreement.

The Bureau of Reclamation (BOR) and Sacramento engineering firm CDM Smith are leading a committee designated to evaluate options for affordable power and to develop a Comprehensive Agriculture Power Plan (CAPP).

The committee consists of nine on-project irrigators, two off-project irrigators, Klamath Water and Power Association (KWAPA), Klamath Water Users Association, Energy Trust of Oregon, and California PUC, according to KWAPA Executive Director Hollie Cannon.

“The committee is trying to look at all the options to see what’s going to be the best fit for the community,” said KWAPA Board Member Ed Bair, at a KWAPA board meeting Tuesday.

The CAPP committee was formed about three months ago, Bair said.

The 2010 Klamath Basin Restoration Agreement (KBRA) settlement 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.

In the KBRA, Project irrigators negotiated to give up water or to receive less water in exchange for power benefits.

Power costs skyrocketed in 2006 when a low-cost power delivery contract with PacifiCorp expired. Cannon noted that the CAPP group is still getting organized, but its goal is to design a comprehensive plan for achieving what irrigators bargained for in the agreement.

“We need to define what it is irrigators agreed to, as far as what is affordable power,” Cannon said.

BOR representative Mike Newman said stakeholders should look at the target power rate in a number of ways.

“I want the CAPP to support what you want,” Newman said.

According to Cannon, the authority for the BOR to fund CAPP dates back to the first authority the agency was given to build the Klamath Project in 1905. Irrigators later reimbursed the BOR for Project construction costs.

Cannon said the BOR will explore the concept of “reimbursability,” and whether or not irrigators will be required to reimburse the agency for costs of a new power program.

“My problem with reimbursability is: What are you paying for? If CAPP moves forward and offers something above and beyond what I can make available to myself, perhaps. If the end product of CAPP is something that is currently available, then I don’t know where the value lies in CAPP,” said KWAPA board member Gary Derry.

“It’s still possible that reimbursability might go away,” Newman said.

KWAPA, BOR and other agencies have recently worked with PacifiCorp, the parent company of Pacific Power, to explore receiving Project power deliveries from a less expensive federal provider. Talks stalled in July when Dean Brockbank, vice president and general counsel of PacifiCorp, announced a possible 2- to 3-cent per kilowatt hour transition fee, which would essentially erode savings gained by adopting a new provider.

According to Cannon, CAPP is just another avenue to accomplish goals of the KBRA and federal power is still an option.

PacifiCorp is not currently part of CAPP discussions, but the power provider has asked to be involved, according to Newman.

“It’s pretty clear that as long as PacifiCorp is a monopoly power provider in the Basin, they have to be involved in any solution,” he said.

Cannon noted several questions about the program and how it may be implemented haven’t been answered yet. Cannon foresees more answers surfacing in the coming months.

A technical working group meeting is scheduled for Nov. 19.

ljarrell@heraldandnews.com ; @LMJatHandN

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