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Economic and dam related articles

Idaho Power Rate Plan would Hurt Farmers

by Ralph C. Burton, Guest Comment
Capital Press, April 30, 2004

Generally speaking, the Idaho Power rate increase proposal has been considered mainly from the perspective of how it would affect homeowners, especially in the state’s cities. But urban and rural Idaho still rely on each other, and what happens to one affects the other.

The proposed rate hike will have an affect on businesses and industry located in major cities. A lot of that industry is food processing whose raw material is now sourced from Idaho farms. Cities are where people go to buy cars, appliances, obtain medical care and other services that are not available in rural areas.

If Idaho Power is allowed to raise rates on irrigators by 25 percent as it wishes, that will pretty much spell the end of a large part of Idaho’s economy. Our sugar beet grower/owners have approximately 500,000 acres statewide relying on Idaho Power electricity for water to grow various crops, including sugar beets. Hard hit will be Southern Idaho, where affordable electricity is essential to sustain sugar beet production.

For example, the Bell Rapids Irrigation Company, a farmer-owned business, uses 62 million kilowatts to pump water vertically 550 feet out of the Snake River near Buhl. About 18,500 acres of farmland rely on the water, and those acres produce nearly $12 million in crops. A 25 percent rate hike would put Bell Rapids out of business and wipe out the sugar beet production tied to it.

Since 2000, electricity has almost doubled in cost. Fertilizer, gasoline and diesel have also escalated. Prices for sugar remain at low levels, and prices for other commodities have also been at or near historical lows in recent years.

Farmers do not have the mechanism in place to pass along their increased production costs to the consumer, as Idaho Power does. If a farmer’s costs become more than what he receives for his products, the only choice is to go out of business or drastically scale back his farming operations. This surely will happen to many farmers should the proposed power rate increase become a reality.

This will have a serious economic impact on Amalgamated Sugar Company’s processing plants in Nampa, Twin Falls and Paul, Idaho, and at Nyssa, Ore., and adversely affect its 1,200 grower/owners and 2,000 employees.

Idaho Power says it must raise rates to pay for power plants needed to keep up with growth. The real injustice of the rate hikes is that irrigators are not the cause for the increasing needs for electricity.

Raising energy rates 25 percent on irrigators will damage the economy and seriously impact livelihoods throughout the state. On behalf of Idaho’s agricultural community, I urge you to contact the Idaho Public Utilities Commission and ask them to reject the 25 percent rate hike.

Ralph C. Burton is president and chief executive officer of the Amalgamated Sugar Company LLC, with offices in Idaho and Utah.
Idaho Power Rate Plan would Hurt Farmers
Capital Press, April 30, 2004

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