GRANTS PASS - The Oregon Public Utility Commission on Wednesday put Klamath farmers on a seven-year road to paying full market rates for electricity to pump irrigation water, ending nearly a century of bargain basement rates that have been an issue in battles over water and salmon.

In denying farmers' arguments they qualified for a special below-market rate, the commission put them on a schedule of increasing electric rates enacted by the Legislature to soften the shock of higher costs. It goes into effect Monday following the expiration of a 50-year contract. Increases will be 50 percent a year for seven years. The bargain rates had been in place since 1917.

The commission left open the possibility that farmers on the Klamath Reclamation District could regain some credit on rates if they can prove that they benefit PacifiCorp by sending more water down the Klamath River through hydroelectric turbines, but noted it would be difficult to prove.

“We didn't get a home run, but we certainly hit a double,” said Tulelake, Calif., horseradish farmer Scott Seus from his fields. “We can sustain this for a year or maybe the next two years. After that the crunch starts to come. What this decision gave us is roughly three or four years to work this out with PacifiCorp to recognize the value of what we provide.”

Salmon fishermen and conservationists who have been battling farmers over water allocations called the decision a victory that will eventually provide more water to struggling salmon runs in the Klamath River in Northern California, where a continuing decline in adults returning to spawn has triggered a practical shutdown of 700 miles of the West Coast to commercial salmon fishing this summer.

“I think we'll see a lot of new incentives for greater water conservation and more interest in programs to help landowners with marginal lands and put more water in the river,” said Steve Pedery, spokesman for the Oregon Natural Resources Council from Portland. “This is shaping up to be the year of decision for the Klamath River in a lot of ways.”

Salmon advocates have been happy to see a federal judge recently order the federal government to put more water down the Klamath for threatened coho salmon, and federal fisheries agencies advise the Federal Energy Regulatory Commission to require PacifiCorp to install fish ladders and turbine screens on a series of hydroelectric dams on the Klamath River that block salmon from 300 miles of spawning habitat.

Glen Spain of the Pacific Coast Federation of Fishermen's Associations, which represents California commercial salmon fishermen, said the farmers deserve time to make the transition to higher rates, but that the PUC made it clear they have no justification for below market rates that force other PacifiCorp customers to pay more.

PacifiCorp spokesman Dave Kvamme said from Portland that the utility was pleased by the PUC decision, and that all the stakeholders on the issue were involved in developing the legislation that ramps up electric rates for the farmers.

Authorized in 1905, the Klamath Reclamation Project provides water for about 1,000 farms on about 180,000 acres straddling the Oregon-California border on the eastern side of the Cascade Range. The primary reservoir, Upper Klamath Lake, flows into the Klamath River. Water diverted to irrigate the project is returned to the river, along with water from Lost River and wells pumped to benefit salmon.

On most federal irrigation projects around the West, the U.S. Bureau of Reclamation built dams to provide low-cost power for irrigators. But on the Klamath Project, they ceded that responsibility to California & Oregon Power Co., which built dams to produce electricity. Copco has since been taken over by PacifiCorp.

PacifiCorp has said electric rates of 0.6 cents per kilowatt hour were 20 percent below market when they were negotiated in 1956, and are now 99 percent below the 6 cents per kilowatt hour charged for irrigation power in Oregon. Similar rates have been in place since 1917. The rate in California is 8 cents per kilowatt hour.

Lumping together the 220 customers on the project in California, 720 on the project in Oregon, and 300 off the project in California - including a golf course, cemetery and schools that pay 0.75 cents per kilowatt hour - PacifiCorp has said it loses $8 million to $10 million a year.

Seus said he expected a decision from the California Public Utility Commission this week on a proposal to impose the rate increase over four years for California farmers on the project.