From: Garance Burke, Associated Press
Published May 30, 2007 12:00 AM

Report Finds That Big California Farms Get Unfair Electricity Subsidy to Pump Water

FRESNO, Calif. -- Some of the nation's largest farming operations are paying rock-bottom rates for the electricity they use to pump federally subsidized water to their fields.


About 7,000 giants of California farming get their water from the Central Valley Project, a vast irrigation system that pumps water from mountain rivers through canals spanning the state's fertile interior.


But the system only charges irrigators about a penny per kilowatt-hour to move the water to their fields, a rate subsidized each year by about $100 million in taxpayer funds, according to a study released Wednesday by the Environmental Working Group.


In comparison, farmers that rely on a state-run irrigation system paid about 22 cents per kilowatt hour for wholesale electricity last year, Department of Water Resources officials said.


"This is essentially socialized agriculture supported by corporate welfare," said Bill Walker, vice president of the Oakland-based Environmental Working Group. "Most farmers in California receive no subsidies whatsoever, while this particular set of agribusinesses get crop subsidies, cheap water and now, cheap power."


By dividing the total cost of electricity used to move water at each of the system's pumping stations by the number of kilowatt-hours used, the nonprofit calculated the rate paid by each water district in 2002-03.


At a time when portions of the state were experiencing blackouts, they found irrigators paid about one cent per kilowatt-hour -- less than one-tenth of PG&E's agricultural rates -- to get their water delivered, Walker said.


The State Water Project also pumps water to about 755,000 acres of farmland, but most farms buy their power directly from private energy companies like PG&E, which charged farms an average 13.5 cents per kilowatt-hour in the same years.


Federal water officials bristled at the idea that farming operations fed by the nearly 500 miles of canals and pumping stations had a competitive advantage over other California farmers.


Congress mandates that the system sell electricity generated at its 20 dams to farmers at cost, said U.S. Bureau of Reclamation spokesman Jeff McCracken.


"They're trying to pull the wool over people's eyes with this study," McCracken said. "In the days the Central Valley Project was built it was very inexpensive to generate electricity, so to compare that to the cost you pay as a resident for your PG&E power is ridiculous."


For the farming giants that belong to the Westlands Water District, the largest in the nation, the subsidies came out to an average savings of about $165,000 per farm.


A Westlands spokeswoman did not dispute the figures, but said member farms like Tanimura & Antle, the nation's top lettuce grower, paid additional fees to reimburse the government for the cost of building and operating the project's dams and reservoirs.


"The water project is generating at-cost power which lowers overall food costs for the consumer," said Westlands spokeswoman Sarah Woolf.


Since any plan to modify electricity rates would need congressional approval, environmental advocates said they hoped to build political will in Washington to change the system. So far, they appear to have attracted one ally in the House Natural Resources Committee.


"This study raises serious questions about whether the American public should be guaranteeing bargain-basement energy prices for some of the richest farmers in the world," said Rep. George Miller, a Democrat.


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