[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
BPA CONSERVATION PROGRAM REINVENTION AND UMATILLA ELECTRIC COOPERATIVE 
                              ASSOCIATION

                                 ______


                       HON. ROBERT F. (BOB) SMITH

                               of oregon

                    in the house of representatives

                        Friday, October 7, 1994

  Mr. SMITH of Oregon. Mr. Speaker, the engine that drives the economy 
of the Northwest is the Bonneville Power Administration. Established in 
1937, Bonneville markets and provides transmission for electricity 
generated principally at a series of Federal hydroelectric dams. It 
provides roughly 50 percent of the region's electric power and, through 
rural electric cooperatives, serves most of my district.
  Currently, BPA is going through a reinvention process that will 
ultimately lead to new power contracts with its customers. A new, more 
competitive, electric utility industry is driving many changes within 
Bonneville. One of them is the way in which it carries out its mandate 
to achieve energy conservation savings. Moving away from regionalized 
conservation spending, Bonneville is proposing to more closely match 
those who pay for and those who benefit from individual utility 
conservation programs.
  While I believe that Bonneville is moving in the right direction on 
conservation reinvention, I am concerned that it be implemented in a 
way that does not trample on the prerogatives of consumer-owned 
utilities. Out of a commendable concern that real conservation savings 
occur, some in the region have suggested that a strict command and 
control system of allocating conservation quotas be instituted. In 
addition, a system of penalties and benefits would be attached to 
individual utility performance.
  Mr. Speaker, this type of accountability mechanism misses the point. 
Cost-effective conservation measures are, by definition, in a utility's 
best interest. Instead of instituting an expensive, burdensome, 
centrally-controlled conservation program, we should be giving 
utilities the tools and information to make their own choices. Since 
they serve the least dense, least cost-effective areas, rural electric 
cooperatives are particularly concerned with choosing the lowest-cost 
power options for the future--whether that entails generating or 
conserving power.
  A burdensome accountability mechanism will take away the historic 
right of consumer-owned utilities to govern themselves. Because co-ops 
are governed by elected board members, you can bet that they take great 
care to choose the least-cost path in plotting their utility's long-
term resource future.
  I was reminded of this recently when I ran across the August edition 
of Rural Electrification Magazine. Included in its pages an article on 
Umatilla Electric Cooperative Association, which is the largest 
irrigation cooperative in the country. Its current and former general 
managers, Steve Eldrige and Russ Dorran, have seen the co-op through a 
time of rapid BPA rate increases. In order to keep its members 
competitive and in business, Umatilla needed to save itself and its 
customers money. Interestingly, it did so by employing wide-ranging 
conservation programs--particularly with regard to the energy and water 
costs involved in irrigating crops.
  I ask that the excepted article be printed in the Record following my 
statement. I commend the story of Umatilla Electric to my colleagues as 
a good example of the fact that people and organizations often make 
responsible decisions without heavyhanded Government mandates. 
Umatilla's board and management deserve to be commended.

                         The Water-Energy Link

                           (By Robert Gibson)

       On May 19, a cool, soaking rain started before dawn in 
     northeastern Oregon. The rain got heavier driving east from 
     Hermiston up into the rolling country around Pendleton, where 
     the wheat fields disappeared into the clouds.
       The rain brought satisfied smiles to the faces of the 
     area's cattle and sheep ranchers, and for the dry land wheat 
     farmers, it was a million-dollar downpour. Less than a week 
     earlier, they fretted about losing their entire crop to a 
     droughty spring.
       But for the farmers closer to the Columbia River on either 
     side of Hermiston, it didn't really matter whether it rained 
     on May 19, or any day. These farmers, working land that was 
     sagebrush desert just 20 years ago, don't wait for a soaking 
     that may never come. They grow their crops with water pumped 
     from the river or out of the ground. Here, electrically 
     driven irrigation machines slowly revolve, turning 125-acre 
     circles of dry land a deep, stunning green.
       These machines have created one of the richest agricultural 
     districts in the country. And they forced Umatilla Electric 
     Cooperative Association of Hermiston to grow up fast when the 
     irrigation boom hit in the early 1970s, and then to emerge as 
     a national leader among utilities in innovative service to 
     irrigators when that boom threatened to break apart in the 
     energy and farm crisis of the 1980s.
       Umatilla Electric sells more kilowatt-hours of electricity 
     for irrigation than any electric cooperative in the country: 
     263,509 MWh in 1992, or 46 percent of its total sales.
       ``Without irrigation, there is nothing and there was 
     nothing,'' says Russ Dorran, who retired as the co-op's 
     general manager in 1991. ``We get seven to eight inches of 
     rain a year. This was always country folks just passed 
     through on their way somewhere else.''
       Umatilla Electric sells more electricity for irrigation 
     than many co-ops sell for lighting peoples homes, but it is 
     not alone. There are more than 25 electric co-ops in the U.S. 
     with more than 1,000 irrigation accounts, and more than 50 
     co-ops that take in more than $1 million a year in irrigation 
     revenue. To keep this business, co-ops must keep promoting 
     smart ways to get their consumers to use water and energy 
     wisely.
       Until about 1980, it all seemed so simple: The partnership 
     of abundant water and cheap power was turning dry, bitter 
     land sweet and lush in large expanses of the American West. 
     The bounty it produced seemed limitless to the electric 
     cooperatives and their farmer-members.
       But then the geopolitical storms of the 1980's swept in. 
     the price of energy rose, shockingly high in places, while in 
     others apocalyptical warnings about the drying up of the 
     waters were proving true. Everywhere, crop prices plummeted 
     and the supply of farm credit shrank.
       Overnight, the key to survival changed from using more and 
     more water to conservation of both water and energy. 
     Necessity spurred advances in irrigation science, and farmers 
     and their electric co-ops became adept students.
       Conservation soon became widely accepted as the best and 
     most profitable way of doing business. Today, crop yields and 
     quality are up and the utilities are financially strong 
     again, even as the use of power and energy has 
     proportionately declined. But no one takes anything for 
     granted anymore.
       Even though Umatilla Electric Cooperative Association 
     irrigators have cut water use by 25 percent and power use by 
     half over the last 15 years, they wonder if that will be 
     enough to withstand the next likely jolt to their local 
     economy: a last ditch effort to save the Pacific salmon by 
     drastically cutting power production at the Bonneville Power 
     Administration's dams on the Columbia River.
       With the center pivots, the irrigated acreage in the co-
     op's service area grew tenfold, from about 20,000 acres to 
     today's 200,000. Frank Lamb and his partners bought their 
     10,000-acre tract in 1973 and started farming in 1974. It 
     took about three months to get all the required water and 
     irrigation permits, says Lamb, a process that ``would take 
     several years now'' if new water permits for agriculture were 
     even available; and they are not, neither in Oregon nor 
     across the Columbia River in Washington.
       Eastern Oregon Farming sucked water straight out of the 
     Columbia with intake pipes six feet in diameter. For Eastern 
     Oregon and the other corporate farms that came in, the water 
     was the elixir for high-value crops never grown in great 
     quantity in the region. Potatoes led the way (for a time, 
     every McDonald's french fry came out of the fields outside 
     Hermiston); then came peas, corn, alfalfa, onions, 
     carrots--more than 20 crops in all.
       The irrigated agriculture boom transformed the economy of 
     the Hermiston area, and it transformed Umatilla Electric 
     Cooperative Association. From 1971 to 1979, according to 
     Steve Eldrige, the co-op's current general manager and former 
     engineer, the utility saw its system demand increase from 28 
     megawatts to 188. The system went from being divided into 
     five substations to 23, and the value of its physical plant 
     grew from $6 million to $27 million. Staff was expanded, new 
     departments like engineering and customer service created and 
     the co-op borrowed lots of money from REA.
       Then in 1976, Bonneville Power sent a letter to its 
     wholesale power customers stating that in five years' time, 
     the co-ops, public utility districts and municipalities were 
     going to have to find other sources of power for any big new 
     loads.
       ``We were growing at 20 percent a year, and there was still 
     lots of new ground to farm, lots of water,'' says Eldrige. 
     ``It looked like there was no end to it.''
       The irrigation boom had a similar effect on Umatilla's 
     sister co-ops and PUDs in the region, and their collective 
     need led to the ill-fated decision by the Washington Public 
     Power Supply System (WPPSS) to build five nuclear power 
     plants at Hanford, Wash., about 60 miles north of Hermiston. 
     Only one of the plants made it online; the rest were 
     mothballed or shelved after costs skyrocketed.
       WPPSS caused a tremor on Wall Street when it defaulted on 
     $2.25 billion in bonds. The participants in WPPSS, including 
     Umatilla Electric, had a huge debt to eat, and paying it off 
     drove up the Hermiston utility's wholesale rates 600 percent 
     between 1979 and 1984.
       Farmers cried disaster and co-op employees recall a brief 
     period of panic, filled with talk of bankruptcy. Umatilla 
     Electric had its first and only layoff, 10 percent of the 
     work force.
       But it was also the beginning of the co-op's finest hour. 
     Dorran convened an agribusiness task force composed of 
     leading farmers and business people. Even as the doom and 
     gloom of the WPPSS crisis crested, the task force realized 
     that a way to emerge from the mess in good shape was to find 
     ways to make more efficient use of both water and power.
       ``Most utilities at that time saw energy by itself,'' says 
     Farahmand (Fred) Ziari. ``UECA in 1981 did what no other 
     utility had done; it recognized the importance of water as a 
     resource. They saw that water and the management of that 
     water was part of energy conservation.''
       Although water was still ``free,'' the delivery cost was 
     suddenly much greater. So Ziari became the agent of change, 
     the one who had to convince farmers that they could reduce 
     their costs by using less water and still get a good crop. 
     (Umatilla Electric won a national energy conservation award 
     for Ziari's work in 1986.)
       As it turned out, the farmer could get not just a good crop 
     with less water, he could get a great crop. Yields increased 
     two, three, four times during the 1980s as area farmers began 
     fine-tuning their irrigation techniques.
       ``We found out that when you over-irrigate, you push the 
     nutrients down below the root system,'' says Frank Lamb. 
     ``That costs money and it degrades the quality of the ground 
     water.'' It also can reduce crop yield and quality through 
     plant diseases that thrive in soggy, damp soil.
       Among the many changes urged by Umatilla Electric has been 
     the switch from high-pressure sprinkler systems to low-
     pressure ones, reducing the amount of water sprayed and the 
     horsepower of the electric motors required to move the water. 
     Further conservation is achieved in certain crops with drip 
     irrigation, which sends the water through plastic tubes and 
     out tiny emitters by the droplet. More electric energy is 
     saved through the installation of larger irrigation pipes or 
     the relining of existing ones (smoothing a rough interior 
     surface that causes friction).
       Bryan Wolfe converted from high-pressure to low-pressure 
     irrigation in the mid-1980s. ``My motivation? Green stuff,'' 
     he says. ``It makes no sense to waste water or energy.''
       What have all the changes added up to? In 1978, the average 
     Umatilla Electric farmer-member was annually applying 40 
     inches of water per acre with 3,000 kilowatt-hours of power. 
     Now water consumption has been whittled to 30 inches an acre, 
     and power consumption is down even more dramatically, to 
     1,400 kWh per acre. Farmers have had to invest some money to 
     achieve these results (though a good many investments have 
     been shared by Umatilla Electric and Bonneville Power), but 
     they've also benefited by dramatically increased yields and 
     better quality crops.
       When Steve Eldrige came to work at Umatilla Electric in the 
     1970s, ``it was a time when we had a sales-by-volume 
     mentality, when we said electricity was almost too cheap to 
     meter,'' he says. ``Since then, we've seen a real revolution 
     in the utility industry, and a tremendous change in the 
     attitude of how we use water and energy. Twenty-five years 
     ago, there was little concern about energy efficiency. Now, 
     it's the number one thing we tell our members. And they view 
     themselves as environmentally responsible, from how they 
     build their houses, to buying high-efficiency water heaters 
     and heat pumps to the farmers who follow the weather reports 
     they get by computer.''
       Umatilla Electric Cooperative Association survived the 
     1980s because it was willing to look at the Northwest's 
     greatest natural resource--the Columbia River and its 
     tributaries--in a new way. Now a new Columbia River crisis--
     the survival of the Pacific salmon--threatens utilities in 
     the region.
       In recent years, millions of dollars have been spent at 
     each dam to shunt the fish safely away from the Corps of 
     Engineers' hydroelectric turbines. At McNary Dam near 
     Hermiston a new $15 million bypass, looking like a carnival 
     ride with its colored curving pipes swinging high above the 
     ground, swirls the fish gently into barges which carry them 
     down to the sea.
       Nevertheless, fish counts continue to fall dramatically, 
     and there is strong political pressure for a drawdown of the 
     reservoirs--a release of more water over the spillways to 
     speed the flow of the river. More water over the dam means 
     less through the turbines and less hydroelectric power, which 
     translates to higher electric rates.
       John Hansell is checking a center pivot on a field of peas 
     with one of IRZ Consulting's computer irrigation printouts in 
     his hand. ``We've been having to adapt what we do every year 
     to gain efficiency,'' he says. ``But if the electric rates go 
     up again, and everything else remains the same, I don't know 
     how we're going to survive.''

                          ____________________