Public Notification to Customers in Pacific Power's California Service Territory, printed on page 5 of a 6 page local Lost River Star February 22, 2006, by Pacific Power

Pacific Power, the Klamath Water Users Association, and the Department of Interior have reached an agreement on a transition rate plan to move existing Klamath Irrigation Project Customers in California covered by a 1956 contract from the current contract rates of $0.006/kWh (6 mills) to full tariff rates. This transition, if approved by the California Public Utilities Commission (CPUC), will begin on the day following the expiration of the existing 50-year rate contract, April 17, 2006. The rate transition will continue until April 17, 2010, when these Project Customers will begin to pay full applicable tariff rates.

This transition period is proposed by the parties in recognition of the rate shock that would be created by an immediate move to full tariff rates and in order to provide an orderly movement from contract rates to full applicable tariff rates while minimizing the economic dislocation for such Project Customers. The effective average rate for Project Customers under current Schedule PA-20 is approximately 100 mills, thus immediate movement to full tariff levels would require an increase of more than 1600 percent.

In order to minimize the economic impact of such movement on Project Customers the transition  period is proposed by the parties in recognition of the rate shock that would be created by an immediate move to full tariff rates. The agreement anticipates that other California customers of Pacific Power would pay rates during the 48-minth transition period sufficient to cover the differential between the phase-in rates and full tariff rate levels. Details of the proposal and transition plan can be found at  pacificpower.net/Klamath  and copies will be made available at local Pacific Power field offices.

The CPUC will be holding evidentiary hearings on the proposed transition on March 6 and 7, 2006, at the CPUC's headquarters at 505 Van Ness Avenue, San Francisco. Persons withing to participate in such hearings or to comment on the proposal should contact the CPUC's Public Advisor at (415) 703-2074 or via e-mail at public.advisor@cpuc.ca.gov and reference PacifiCorp Application No. 05-11-022.

PACIFIC POWER