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7. Should the low-density discount be eliminated or modified? Please 

 provide an estimate of the cost and/or benefit to regional ratepayers of 

 continuing to provide these discounts. 



We favor continuation of the low density discount. As we have 

 indicated earlier, Bonneville's role in the region has been to provide 

 "integrated" service to the remote areas of the region. The low density 

 discount is a recognition that some small systems need some additional 

 support to assure that Bonneville's original charter is continued -- that is to 

 assure the widest spread use of Federal power. Further, it is important to 

 remember that the low density discount is specifically provided for in the 

 Regional Power Planning Act (Section 7. (d)(1)). Again, the ultimate test is 

 the competitiveness of all requirements customers, including those 

 customers with difficult service areas, not just that of BPA wholesale costs. 

 While Bonneville must become more business like in its approach, we can 

 not favor eliminating the low density discount. Obviously, BPA must 

 continue to evaluate the application and cost benefit to individual utilities to 

 assure fairness to its other customers. This is in keeping with the provisions 

 of the Bonneville Act and the Regional Act. 



8. Are there any other subsidies or discounts that Bonneville provides to 

 certain customers that should be eliminated? 



We hope that Bonneville, in becoming more competitive, is able to 

 continue to remember its basic role in the region. The requirements 

 customers of Bonneville represent its core business. If BPA becomes a 

 "profit maximizer" in the model of some mainstream business organization, 

 the small outlying areas will suffer tremendous negative economic 

 consequences. In the utility business, there are what some would term 

 "subsidies". Are lOU ratepayers in Portland subsidizing ratepayers in 

 Condon, Oregon? The point is that the universal availability of power in the 

 region at fair rates should be a given. The ratepayers in Portland have a 

 stake in the economic success of Condon in the same manner that the public 

 power ratepayers in Seattle have a stake in the economic success of 

 Republic, Washington. 



Page 7 - TESTIMONY OF FERGUS A. PILON 



