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Claim: Taxpayers foot electricity bills for Central Valley farmers

Monday, September 21, 2009

Central Valley Business Times

Published May 29, 2007

Some Central Valley farms are paying pennies for the electricity needed to deliver irrigation water, claims a report Wednesday from the Environmental Working Group, which describes itself as “a non-profit, non-partisan organization” that gets the majority of its funding from private charitable foundations.

“In 2002 and 2003, agribusinesses in the Central Valley Project (CVP) paid only about one cent per kilowatt-hour for electricity to transport irrigation water,” the group’s report says.

“Compared to Pacific Gas & Electric's agricultural rate, that's an annual energy subsidy of more than $100 million from federal coffers - to farms that also receive hundreds of millions of dollars a year in crop and water subsidies,” it says.

"At a time when other Californians have been rocked by volatile electricity prices and the constant threat of rolling blackouts, a few thousand agribusinesses are guaranteed dirt-cheap power, courtesy of U.S. taxpayers," says EWG Senior Analyst Renee Sharp, lead investigator for the report. "These subsidies are not helping small farms survive, but padding the profits of the biggest and richest farms."

The EWG says CVP agribusinesses should be required to pay prices approximating market rate for the power used to store and move irrigation water. It is also calling for a federal agency to regulate power rates “to ensure system fairness,” and should make these rates publicly available.

But under the law, the operator of the Central Valley Project, the Bureau of Reclamation, cannot charge more for power now than it did when its 11 California hydroelectric plants were built in the 1950s and 1960s.