179 



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 3 of 7 



3. Bonneville is considering unbundling the services it 

 provides such as transmission, storage, load-shaping and 

 integration services. What are the potential benefits and 

 drawbacks of unbundling? If Bonneville pursues unbundling, what 

 services should be unbundled and how should the price for these 

 services be calculated? Are there some Bonneville services that 

 cannot be unbundled? 



Are you aware of any examples in either the public or private 

 sectors of unbundled wholesale power services? 



Dnbtindling oould provide Bonnevllla with a new revenue source for 

 services if it is presently providing these services at no or 

 little charge. The bundle of services presently provided to full 

 requirements custoBsrs are paid for through the Priority Firm 

 rate on a average system cost basis. However, unbundling could 

 lead to market pricing which could further disadvantage full 

 requirements customers. Also, if Bonneville is unable to 

 correctly price these unbundled services, there will be an 

 increase in the duplication of facilities and a move away from 

 one utility planning. 



4. How should the costs of environmental externalities, 

 including the costs of restoring endangered fish and other 

 species, be distributed in tiered rates and/or unbundled 

 services? What must Bonneville do to ensure that competitiveness 

 efforts such as tiered rates and unbundling do not diminish its 

 commitment to statutory requirements such as the protection of 

 fish and wildlife? 



How can the region maintain the benefits of regional coordination 

 and planning if resource acquisition an transmission become more 

 decentralized as a result of tiered rates and unbundling? 



Costs must follow the resource. That is, fish and wildlife costs 

 associated with the hydroelectric system must be recovered by the 

 tier I rate. All new resource costs, including conservation must 

 be recovered by the tier IX rate. Transmission system costs must 

 some how be allocated among the tiers and the unbundled 

 services. Under this scenario, regional planning will certainly 

 be diminished because the decision making for resource 

 development and transmission system requirements can and will be 

 made independent of Bonneville. 



NAT_IIVSE/QEN.MGR 



