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region. The Council believes that the guiding principle should be that the cost of the reserves 

 to the region should reflect their value as closely as possible, whether those reserves are 

 provided by the direct service industries or through other means. We believe there may be 

 creative options that serve the interests of the aluminum industry and the region as a whole. 



Power Sales Contracts 



The power sales contracts renegotiations are where many of the issues discussed 

 above will be confronted. The power sales contracts will define the terms and conditions of 

 transactions between Bonneville and its customers for many years to come. This process is 

 critical to the region. 



Tlie Council is participating in the power sales contracts pnxess, although we are not 

 a party to the contracts. The Council's goal in participating is to see that, at a minimum, the 

 new contracts do not impede achieving the goals of the Power Act, the Council's plan, and 

 the fish and wildlife program. More affinnatively, the power sales contracts could enhance 

 achievement of the goals of the Act and the plan, particularly as the region and the utility 

 industry more generally enter what may be a new era. 



As noted in our opening, the changes going on in the utility industry portend a 

 regional electrical system considerably different than the one contemplated when the Power 

 Act was passed. The investor-owned utilities have never turned to Bonneville for new 

 resource acquisition. Clearly, if changes like tiered rates, unbundling of products and 

 services, and wholesale transmission access come to pass, Bonneville quite probably will not 

 be acquiring new resources for some of its public agency customers, let alone for the 

 investor-owned utilities. The effect of these changes will be to provide individual utilities 

 the opportunity for greater autonomy in the development of resources, should they choose to 

 exercise it. 



However, the fact that the structure of the utility industry in the Northwest may be 

 different than the assumptions underlying the Power Act does not mean that the goals of the 

 Act are invalid. The goal of an adequate, efficient, economical and reliable power supply, 

 utilizing long-term, least-cost, environmentally sound resources is still valid. The goal of 

 protection, mitigation and enhancement of the fish and wildlife of the Columbia and its 

 tributaries is still valid. The independent check on the need for power provided by the 

 Council's plan is still appropriate. And the goal of publicly accountable planning and 

 decision-making is also still valid. 



Greater autonomy in the development of new resources must not imply freedom from 

 regional responsibility. No utilities are proposing forsaking their access to the federal base 

 system. The federal base system will continue to be a resource of tremendous value to the 

 region. It will be the services provided by that system — transmission, storage, reserves. 



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