177 



CaUMBlARim 



AasoKi-mndptapkiaitfdislna 



64001 Cotumbu River Highway 



Pon Office Box 1193 



Si. Helou, OTC^on 97051 



TESTIMONY BEFORE THE U.S. HOUSE OF REPRESENTATIVES 



(M3)397-IM4 

 (SO])M}-«000 



COMMITTEE ON NATURAL RESOURCES 



FAX (503)397-5215 



by 

 Columbia River People's Utility District 



September 25, 1993 

 Eugene, Oregon 



♦ 



Board of 

 Directors 



Donald Nys 



Agnes Petersen 



Richard Sahagian 



Richard Simpson 



Arnold Tarbell 



G«nerai Manager 



Fergus A Prion 



1. Why is it important for Bonneville to become more 

 "competitive"? How likely is it that Bonneville will become a 

 higher cost supplier of energy to the region than other 

 providers? Are there other reasons for Bonneville to undertake 

 its competitiveness initiative? VJhat principles should guide 

 Bonneville in this effort? 



As we speak today, Bonneville is no longer perceived as the 

 lowest cost provider of electric energy in the Northwest. Recent 

 negotiations with prospective industrial customers who want to 

 locate new manufacturing facilities in the service territory of 

 one of our members, revealed that they are planning their own 

 generation because of the tucertainty surrounding Bonneville's 

 electric rates. The plemt will be a net producer of electricity 

 because they can generate their own electricity for less thim the 

 present retail rate, now and in the future. 



Bonneville must continue its competitiveness initiative and cost 

 savings must come from that study. Even if the competitiveness 

 initiative is successful it will provide only modest rate 

 relief. The major "principle" that should guide us all is, 

 Bonneville can not continue to be the deep pocket for everything 

 in the region that various Interest groups think needs funding 

 even if remotely related to the hydroelectric system. There must 

 be accountability for the dollars being spent. 



2. Should Bonneville adopt tiered rates? If not, why not? If 

 so, how should these rates be structured? If there is a specific 

 model or framework for Bonneville tiered rates that you support, 

 please describe it in detail. What principles should be used in 

 the development of these rates? Can tiered rates be designed so 

 that they do not discourage development of new industry in areas 

 served by customers of Bonneville? Should federal base system 

 resources be allocated through a tiered rate system? 



First, we believe tiered wholesale rates will be the death knell 

 for public preference as we luiow it in the Northwest. Tiered 

 rates will create two classes of Bonneville customers, the haves 

 and the have nots. The haves are those larger utilities who have 

 the capability to develop and system size to support their own 

 generation and the have nots are the smaller utilities who will 



NAT RVSE/QEN.MSR 



Pnntcd on nxycled (uper 



