Pacific Power customers still smarting from last winter's formidable electric bills can expect even more bad news in the days ahead.

Pacific Power customers still smarting from last winter's formidable electric bills can expect even more bad news in the days ahead.

A recent ruling by the 9th U.S. Circuit Court of Appeals led the Bonneville Power Administration Monday to suspend a residential exchange credit, which has provided an average savings of $28 million monthly for residential, small-farm and irrigation customers.

As a result, Pacific Power customers will see an immediate 13.1 percent rate spike — Pacific Power serves most of the Rogue Valley with power. That means a $9.62 addition to the bill for a typical customer who uses 1,000 kilowatt hours monthly. Customers of publicly owned utilities, such as the City of Ashland Electric Department, will see no change.

The residential exchange credit allows benefits from the low-cost federal hydroelectric system to pass through to residential and small-farm customers of private electric companies in the region. While Industrial and most commercial customers won't see higher rates because of the court's ruling, local agriculture operations that rely on pumps to irrigate orchards and fields will see hefty increases.

"I think it's going to be a bad deal, from what I'm seeing," says Jeff Eicher, secretary/manager of the Rogue Valley Irrigation District, whose customers primarily flood-irrigate. "It will hurt the guys who sprinkle."

That means a big jump in rates for the likes of Harry & David Operations' Bear Creek Orchards unit, Associated Fruit and Naumes Inc.

"The Sunday irrigator trying to keep an acre or two green is going to notice it, but the commercial operators that heavily rely on pumping are going to really see their costs go up," says Jim Pendleton, secretary/manager at Talent Irrigation District. "That's going to get into their profit margin, depending on the volume and lift. If you're moving water on the same level Point A to Point B, it's not quite as bad. But if your lifting 100 feet that's when you're really going drive up power consumption. "A 13 percent increase any place is a hard hit for a farmer or ag person."

A three-judge 9th Circuit panel ruled May 3 certain actions BPA took in entering into settlement agreements with the region's utilities are inconsistent with the Northwest Power Act. That law requires BPA to give household and small-farm customers served by private utilities an equitable share of the Northwest's federal power benefits. By law, 100 percent of the BPA credit payments are passed through utility customers.

Avista, Idaho Power, NorthWestern Energy, Pacific Power, Portland General Electric, Puget Sound Energy and Rocky Mountain Power issued a joint release, defending their agreements with BPA and called the court's rulings flawed.

"Even under the settlement agreements now in question, customers of the affected utilities, who make up 60 percent of the Northwest's population, receive less than 15 percent of the regionwide consumer savings provided by the Northwest's low-cost federal hydropower," the group stated.

The annual benefit to Northwest residential and small farm customers is $2 billion. Of the 10 utility companies, Rocky Mountain Power customers in Idaho will see the highest rate jump at 25.3 percent. NorthWestern Energy of Montana will see just a 1.5 percent increase.

Monte Mendenhall, local spokesman for Pacific Power, said the utility will go before the Public Utility Commission either Friday or early next week to request the BPA credit be suspended on customer bills.

In the joint statement, the utilities said they will pursue judicial, administrative or legislative options to restore their customers' federal power benefits. Payments made under nearly 30-year-old agreements between BPA and the utilities represent the 3.35 million customers' share of power-cost benefits from the Northwest's federal hydropower system.

Mendenhall said the group will first seek a 9th Circuit Court of Appeals rehearing of the May 3 decision.

"We've been huddling with BPA to look at long-term implications," Mendenhall said. "But those implications are yet to be determined."

Reach reporter Greg Stiles at 776-4463 or at business@mailtribune.com