The generator at Farmers Irrigation District’s Plant 3, one of two hydropower facilities that annually produce an average of 22,200,000 kilowatt hours of electricity.
One of 10 water diversions managed by Farmers Irrigation District in the Hood River Valley. Water gets channeled from the mainstem Hood River about 80 cubic feet per second, then travels through a 300-foot tunnel, a custom fish screen and finally into two pipes.
The generator at Farmers Irrigation District’s Plant 3, one of two hydropower facilities that annually produce an average of 22,200,000 kilowatt hours of electricity.
HOOD RIVER — Around 2,000 customers in the northwest part of Hood River County saw a sharp increase in this year’s bill from Farmers Irrigation District (FID), a change the small, non-potable water provider largely couldn’t control, but one with 15 years’ worth of implications.
The district, established in 1874, manages two hydropower plants, the Kingsley Reservoir, multiple diversions and irrigates 6,000 acres in the valley through 68 miles of pipes, all with seven employees. FID heavily depends on revenue from the hydroelectricity it produces to maintain solvency, but its buyer, Pacific Power, offered a much lower rate when the two parties negotiated a new Purchase Power Agreement (PPA), signed in December 2023.
Beginning in 2026, FID will receive 4.8 cents per kilowatt hour of power generated instead of the previous 8.2 figure, almost an $800,000 yearly loss through 2040. In November, FID informed patrons that their annual account fee would rise from $350 to $550 in 2025, along with the per acre operation and maintenance fee from $130 to $190.
“It was a very abrupt change,” said District Manager Alexis Vaivoda, who joined FID in April 2024. “I was trying to get my hands wrapped around the current budget cycle. In hindsight, I would have begun preparing the 2025 budget much earlier to give myself more time to communicate the upcoming changes to patrons.”
However, the district didn’t have any other viable options, nor the leverage to demand better.
Under the Public Utility Regulatory Policies Act (PURPA) of 1978, and the state’s parallel legislation, companies such as Pacific Power must buy electricity from qualifying facilities like FID for a “standard avoided cost rate.” It’s essentially the lowest price a utility would have otherwise paid to generate the power itself or buy it from another source.
“We have no negotiating power over that number,” said Pete Siragusa, board chair of FID. “For us to produce the power we have and sell it at a reduced rate now, and then in addition to that, pay triple the rate to get it back just to run our own system, makes no sense whatsoever.”
Since Oregon’s Public Utility Commission (PUC) calculates and sets the avoided cost rate, Pampi Chowdhury, a communications specialist at Pacific Power, said the company doesn’t have any say in the process either. She also offered more context on the price of Pacific Power’s electricity.
“Pacific Power has to maintain sufficient generating resources to serve customer demand at all times, along with the transmission and distribution lines and substations to deliver that power to customers,” Chowdhury wrote in an email. “Retail rates recover all of the costs associated with serving customers. The generation from FID is just one component of retail electric service.”
“Although PURPA does provide some authority to adjust the utility’s avoided cost to take into account certain characteristics of the qualifying facility (QF), this flexibility is limited for standard avoided cost prices because they are by definition ‘standard,’” Kandi Young, the PUC’s public information officer, wrote in an email.
FID explored several different options before agreeing to the new PPA: selling its hydropower directly to the market or a large industrial user, transitioning to hydrogen or solar, contracting with Pacific Gas & Electric and more. In each scenario, the upfront infrastructure costs were too high, or the return over time was worse.
If FID sought to sell its power to Pacific Gas & Electric, for instance, the district would have to pay Pacific Power "wheeling fees" to use their transmission lines, which would be cost-prohibitive.
One of 10 water diversions managed by Farmers Irrigation District in the Hood River Valley. Water gets channeled from the mainstem Hood River about 80 cubic feet per second, then travels through a 300-foot tunnel, a custom fish screen and finally into two pipes.
Nathan Wilson photo
“There’s only one set of transmission lines, and they belong to Pacific Power,” said Siragusa. “If there was some competition and another set of transmission lines, the competition would help us ... but when you’re dealing with a monopoly, you’re stuck.”
Bernie Yoo, a residential ratepayer who has a small property, highlighted that Sprague Hydro, another marginal producer in Klamath County, Oregon, signed a PPA with Pacific Power that had nearly identical terms and rates to FID’s PPA.
Still, customers are understandably upset — not only for the increase itself but for how the district structured it. Teunis Wyers, an 11-year residential patron of FID, argued the district should’ve raised the operation and maintenance fees, which are based on acreage, more than the flat account fee since agricultural customers use more water anyhow.
“The goal of the increase was to make the percent increase roughly the same irrespective of acreage,” said Vaivoda. What she sees as distributing “the burden across all patrons,” Wyers sees as a “subsidy to the big water users.”
In any situation, Yoo noted that some FID patrons will face greater impacts, and others less. He’s heard from some agricultural users that their bills are approaching $10,000.
“One of my biggest nightmares is if FID constituents get caught up in internal conflicts like that,” said Yoo. “That takes away our attention and energy from the root cause, which is Pacific Power reducing their payments to FID.”
Likewise, Wyers doesn’t intend to spur division between growers and residential users, he simply wants more transparency from FID and its decision-making process. Wyers is also a member of Pacific Power’s Blue Sky program, meaning he pays extra per month to get all his electricity from renewable sources.
“Pacific Power is advertising that they’re supporting renewable production specifically to get a premium, and then they’re turning around and more or less putting this local producer in the red,” said Wyers. “It doesn’t seem to be a fair or equitable situation.”
“Generally, the revenue from the Blue Sky program supports community-based renewable energy projects, beyond those that are already part of Pacific Power’s portfolio used to serve customers,” Chowdhury wrote in response.
Around a dozen customers questioned the district’s management and talked potential solutions at FID’s Jan. 15 meeting, including privatization, halting hydropower generation and installing meters in order to charge based on water usage.
As FID’s five-member board consists of ratepayers, Siragusa said selling the district off to a profit-motivated entity would only hurt customers more. Regarding hydropower, FID’s two plants still generate over $1 million annually, so eliminating them would just put the district in a deeper hole.
“That would add mass quantities of expense and additional upkeep on the district to maintain those,” Siragusa said of installing meters. If climate change-induced drought occurs, for instance, they might be necessary in the future, but meters would further encumber patrons in the short term.
And FID is already more than $14 million in debt.
“Farmers irrigation has always been one of the most progressive irrigation districts in Oregon. We moved forward with a lot of these projects early on when nobody else was doing them,” said Siragusa. “Before any of these new grants that are out today were available, we moved forward.”
Siragusa explained how FID pressurized the entire system, installed fish screens, converted nearly all its irrigation ditches to underground pipes and improved overall efficiency, putting more water back into rivers and benefiting fish. The district also expanded the Kingsley Reservoir, which bolstered climate resiliency, but had to rely on loans for every project.
FID is slowly paying those loans back as part of a years-long process, but Vaivoda confirmed that any additional infrastructure improvement projects will be grant-funded.
“Farmers irrigation has gone through a lot of changes. They’ve faced a lot of challenges,” said Yoo. “I hope all the FID constituents will keep that 150-year history and perspective — recognize that what we’re facing today is just another challenge among many that FID has overcome.”
In the meantime, Vaivoda is exploring different debt forgiveness alternatives, and FID is considering how to best communicate with customers. Both Siragusa and Vaivoda, however, stand by the decisions made and the work FID does.
“This irrigation district has done a fantastic job over the years,” said Siragusa. “It’s a testament to how great the group is that we have here — that we’re able to do all the things that we can do with such a small group of people.”
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