The reduction comes as Pacific Power requested in February that the Oregon Public Utility Commission approve a 10% increase in base rates for irrigation. KWUA intervened in the OPUC proceeding to oppose the increase, and the OPUC issued its decision last week.
“We are very pleased with this outcome,” said KWUA Power Committee Chairman Ben DuVal. “It’s beneficial for irrigators and districts throughout the Klamath Project, and for our neighbors outside the Project in as well.”
Investor-owned utilities such as Pacific Power can only charge rates that have been approved by the OPUC. A utility proposing to change its rates typically submits the proposed new rates to the OPUC, and parties supporting or opposing the change are allowed to participate in the resulting rate case. Pacific Power’s last general rate case prior to this year was in 2013, where it obtained approval for a rate structure that has remained in effect since that time.
Roughly half of Pacific Power’s retail irrigation customers in Oregon are in the Klamath Basin, and only some of these are represented by KWUA’s membership. The organization partnered with the Oregon Farm Bureau Federation, which is interested in protecting Pacific Power’s irrigation customers in other parts of the state.
According to DuVal, most of the disputed issues of special concern to irrigators were resolved through the negotiation of two separate rate stipulation agreements, and the OPUC approved these agreements in its order issued last week. Other disputed issues went to a hearing and were resolved in the order as well.
“We appreciate Pacific Power’s constructive approach to negotiation and settlement,” he said. “We were able to resolve irrigators’ most important issues efficiently and cost-effectively.”
Under the OPUC ruling, there will be an increase in base rates and adjustment schedules of less than one-half of one percent, which contrasts favorably with the ten percent increase that had been proposed in February. Also, due to an annual adjustment factor, the net cost of power for irrigation will actually decrease on Jan. 1, by 3.5%.
KWUA Executive Director Paul Simmons said the adjustment factor is based on a number of variable costs and changes every year. He said much of this year’s decrease came from tax credits granted to Pacific Power through investments in renewable energy. While adjustment factors will vary over the next few years, Simmons said the low base rate will remain in effect until the utility decides to initiate another rate case.
“Customers are getting economic benefit from smart investments that Pacific Power has made in meeting its renewable energy requirements in the state of Oregon,” DuVal said.