48 



cil's planning capability, we do believe, is going to be an important 

 tool in managing that change. 



There are different ways by which these futures could unfold. 

 One scenario is a future in which the changes result in a region 

 fragmented into a collection of individual utilities, independent 

 power producers and others all competing to produce the cheapest 

 kilowatt hour of electricity. There is nothing wrong with cheap 

 electricity. Low-cost electricity has been a major benefit for the re- 

 gion. Maintaining those low costs is a goal for which we all strive. 

 The concern is that in the competition to be the lowest-price pro- 

 ducer and provider in the short run, that we not sacrifice the goal 

 of low-cost electricity in the long run. 



In this worst-case scenario, regional cooperation is sacrificed, 

 cash flow becomes 2dl important. Like many other U.S. industries, 

 short-term return becomes more important than long-term invest- 

 ment. So research in investments in renewables or energy effi- 

 ciency improvements are eliminated for investments that are less 

 costly in the long run but can have higher near-term rate impacts. 

 Natural gas would be the only new resource of choice. Potential 

 benefits of greater system diversity and a regional integrated re- 

 source plan become history. 



But even in this scenario, all utilities would have to rely on re- 

 gional resources to a considerable extent. Bonneville would still 

 control its widespread transmission system; although, as Randy ob- 

 served, access would be available to other parties. And even in the 

 decentralized world, the federal hydro system would continue to 

 have substantial value. The reserves, the storage capability, the 

 shaping services that can be provided by the federal-based system 

 are essential to developing new resources in an economical fashion. 



How should they best be employed to leverage a future consistent 

 with the goals of the Act is one of the questions we have to con- 

 template. Another one — how should we treat a utility that proposes 

 to become independent from the region? It invests in a new re- 

 source and then because of market forces or legislative changes or 

 other effects, the power from that resource becomes uneconomical 

 or unreliable. The customers of that utility will not be left without 

 electricity. Instead, the regional system will have to provide the 

 power, what costs and what risks will the region, in fact, be carry- 

 ing in a world of disconnected decision making and how should the 

 region be compensated for carrying those kinds of risks? The over- 

 all point is that these utility decisions are not made in isolation. 

 However, some of the utilities might regard themselves as capable 

 of making them in isolation. 



We can make other choices as a region. There is an alternate sce- 

 nario. The future utility world can include changes which target 

 the goals of the Power Act and more accurately reflect the intent 

 of the Congress while still capturing the benefits of competition. In 

 this version of the future, we need to capitalize on Bonneville's 

 strengths, on the hydro system and the transmission grid. Receiv- 

 ing the benefits of the federal-based system would carry with them 

 some responsibility to act in the long-term interest of the region. 

 For instance, environmental mitigation, participation in the re- 

 gional integrated resource planning process and coordinated re- 

 gional system. 



