Energy

In 2006 Upper Klamath Basin water users faced the expiration of contracts with PacifiCorp which provided affordable electrical energy for irrigation, water conservation, and wildlife needs in the Upper Klamath Basin. Representatives from PacifiCorp are currently engaged in the Federal Energy Regulatory Commission's (FERC) re-licensing process for their Klamath River power generation facilities. As early as 2002 overtures to KWUA indicated PacifiCorp's willingness and intent to renegotiate the 50 year power contract with Upper Basin irrigators. Instead through filings and procedures at the Oregon and California Public Utility Commissions, the company proposed and received rate increases resulting in up to a 2500% cost increase for the Klamath Project's family farmers and ranchers.

The Klamath Project was authorized in 1905 for irrigation and power development. The United States and PacifiCorp's predecessor (California Oregon Power Company) agreed that private power development on the Klamath River would be used to supply the Klamath Project with energy to Project lands and facilities in addition to the benefit (low cost hydro-electricity) it provided the company's other rate payers. The 1956 power contract was required by the Federal Power Commission as a condition of PacifiCorp's original license to compensate the retained interests of the United States on behalf of the Project water users, and the States of Oregon and California. The legislatures of California and Oregon, with ratification by the United States Congress, created Federal Law with regard to the matter, "The Klamath River Compact" mandated that the waters of the Klamath River provide for " the lowest power rates which may be reasonable for irrigation and drainage pumping". Klamath Basin pumping interests used less than 15% of the current Klamath River generating capacity and all rate-payers in PacifiCorp's service area received rate cost benefit from the United States allowing PacifiCorp to operate in the River.

Having lost promised power rates in 2006, KWUA is working to secure affordable power for irrigators through several avenues. As a part of the Klamath Basin Restoration Agreement (KBRA) KWUA is seeking supplemental federal power to bring down Project energy costs, as well as promoting the development of an entity which could assume the powers of a Public Utility District (PUD). The Klamath Water and Power Agency (KWAPA), is a separate entity from KWUA has now officially been formed by districts in the Klamath Reclamation Project. The purpose of KWAPA is to develop or invest in renewable energy projects and to distribute benefits and/or power to its members. Ultimately KWAPA may play an active role in the management of water within the Klamath Project.