California Big Agriculture's $100 Million Energy Subsidy

• CVP power rates were 10 to 15 times lower than PG&E's industrial, agricultural or residential rates.

• In Westlands Water District, the largest and most politically powerful irrigation district in the CVP, power subsidies in 2002 were worth about $165,000 per farm.

• The CVP power sold to farms by the U.S. Bureau of Reclamation is essentially unregulated. No government agency, other than the Bureau itself, oversees its rates.

EWG's Senior Analyst Renee Sharp, the lead investigator for the report, put it this way: "In an era 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. These subsidies are not helping small farms survive, but padding the profits of the biggest and richest farms."

Cheap power is just the tip of the iceberg of federal subsidies to the CVP:

• Department of Agriculture data show that from 1995 to 2004, CVP agribusinesses received more than $890 million in direct commodity payments, mostly for cotton and rice.

• An earlier EWG investigation conservatively estimated the value of CVP water subsidies at $416 million in 2002.

• In total, federal subsidies to the CVP easily top more than half a billion dollars a year and could well reach $1 billion Ð all at taxpayers' expense.

The report recommends that CVP agribusinesses should be required to pay prices approximating market rate for the power used to store and move irrigation water. A federal agency should regulate power rates to ensure system fairness, and should make these rates publicly available. CVP contractors, and contractors in other federal water projects, should not be allowed to "double-dip" and "triple-dip" on federal subsidies.

Bill Walker is the West Coast Director of the Environmental Working Group. EWG is a nonprofit research organization based in Washington, DC that uses the power of information to protect human health and the environment. The group's research on Power Subsidies is available online at http://www.ewg.org/reports/powersubsidies/.