178 



TESTIMONY BEFORE THE U.S. HOUSE OF REPRESENTATIVES 



COMMITTEE ON NATURAL RESOURCES 



by Columbia River People's Utility District 



September 25, 1993 



Eugene, Oregon 



Page 2 of 7 



be dependent on Bonneville for both tier I and tier II. The have 

 nots will have unattractive alternatives for any new commercial 

 or industrial customers in their service territory. 



Second, it is our view that our blended wholesale cost of power 

 will increase more rapidly with tiered rates than with the 

 historically sufficient average system cost based rates. Tiered 

 rates will require an allocation of the Federal Base System (FBS) 

 emd if recent history is any indication, the FBS will continue to 

 shrinX, thus forcing even a non-growing utility to purchase more 

 and more of its resource needs at the tier XI price. 



Third, and certainly not the least, tiered rates and the 

 allocation of the FBS necessary for tiered rates will certainly 

 maXe it more difficult for new public preference customers to be 

 formed. Do we want to bring the option of public power to an end 

 for the vast majority of Oregonians? 



We do not deny that things need to change if Bonneville is to 

 remain competitive and we propose the following alternatives to 

 tiered rates. Consezrvation is the least cost resource and must 

 be pursued, we simply must lower our per-capita consumption of 

 electric energy. First, we propose a conservation surcharge on 

 utilities that do not capture a certain percent penetration of 

 their conservation "technical potential" over a set time period. 

 Each individual utility would decide how that would be 

 accomplished and without funding from Bonneville. Bonneville's 

 role under this proposal would be research and development and 

 auditing for surcharge determination. There would be no 

 conservation implementation or incentive money in the Bonneville 

 budget, not one dollar. 



Second, Billing Credits needs to be operated as the main resource 

 acquisition tool. Billing Credits would work if Bonneville 

 really wanted it to work and really wanted partnerships with its 

 customers. Billing Credits could become the major third party 

 financing mechanism for Bonneville. Under a functioning Billing 

 Credits resource acquisition program, regional resource planning 

 remains intact. With tiered rates, regional resource planning 

 will be in jeopardy and billing credits makes little sense. 



If these two recommendations were implemented, conservation 

 implementation surcharge and a functioning Billing Credits, 

 Bonneville could remain under the present debt cap and would not 

 need access to the private bond market. Also, the pressure on 

 rates because of resource development (including conservation) 

 would be relieved. There might even be the possibility for a 

 rate reduction. 



NAT_RVSE/GEN.MGR 



