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Introduction 



Irrigated agriculture is unique among BPA's industrial 

 customers. Although representing only 7% of the agency's total 

 power sales, the industry's use of electricity to withdraw water 

 from the Columbia River system complicates pumping power 

 ratesetting issues. Not only does irrigation use power in pumping, 

 but the consumption of water by agriculture — 90% of all 

 consumptive use of water in the Basin — entails hydropower 

 opportunity costs in so far as water withdrawn from the system is 

 unavailable for hydropower generation. Withdrawal of one acre-foot 

 of water from behind Grand Coulee, for example, entails that 1016 

 kWh of generation are lost from 11 downstream dams. 1) 



When one considers that an estimated 35 million acre-feet of 

 water are currently withdrawn from Columbia River sources to 

 irrigate over 4.9 million acres in the Basin, and that the State of 

 Washington estimates that 50% of all irrigation water now withdrawn 

 in that state is in excess of crop requirements, issues pertaining 

 to irrigator efficiencies and the potential role of BPA's pumping 

 power rates in accomplishing those efficiencies assume special 

 significance for all ratepayers in the Pacific Northwest. 2) 

 Conservation by irrigated agriculture not only offers public 

 benefits in the form of reduced energy demand, but because 

 irrigation water may be recovered for hydropower generation, 

 conservation-induced savings in the agricultural industry hold out 

 the promise of significant public benefits in the form of increased 

 hydropower capacity. Conversely, inefficient usage of power and 

 water by irrigators exacts disproportiately high costs on the 

 hydropower system in the form of lost hydropower opportunity. 



Since 1985 EPA has provided irrigators with a pumping rate 

 discount, currently projected at 4.7 mills for fiscal years 1994- 

 1995 and producing a revenue deficiency of roughly $30 million for 

 the biennium. Compared to total agency revenues around $1.5 

 billion and distributed over all ratepayers in the Pacific 

 Northwest, the revenue deficiencies generated by the pumping 

 discount appear insignificant. But the significance of the 

 discount is magnified when considered in terms of its effects on 

 irrigation's continued inefficiencies, and the implications of 

 those inef f iciences , in turn, for lost hydropower generating 

 capacity and continued degradation of water resources on the Basin. 

 The discount has had the effect of partially insulating irrigation 

 from regional rate increases, thus suppressing irrigators' 

 demonstrable tendencies to decrease water consumption in the face 

 of rising energy costs and depriving the system of recapturable 

 water for hydropower generation. These and other hidden costs of 

 the discount require articulation in BPA's review of energy pricing 

 to this industry, both from a public policy standpoint and also 

 because they clearly illustrate the stake all other ratepayers have 

 in the issue of energy and water conservation by irrigated 



