217 



AFTERNOON SESSION 



Mr. DeFazio. Will the persons on the next panel please come for- 

 ward. You do not have much of an audience, but you are being re- 

 corded for posterity, so we will be fine. Let us get started, we will 

 start just in the order on the list here. So Mr. Can* will go first. 



PANEL CONSISTING OF JOHN D. CARR, EXECUTIVE DIRECTOR, 

 DIRECT SERVICE INDUSTRIES, INC.; JEFF SHIELDS, GEN- 

 ERAL MANAGER, EMERALD PEOPLE'S UTILITY DISTRICT; 

 DAVID E. PIPER, EXECUTIVE VICE PRESIDENT AND GEN- 

 ERAL MANAGER, PACIFIC NORTHWEST GENERATING COOP- 

 ERATIVE (PNGC); KERMIT W. SCARBOROUGH, CHAIRMAN, 

 CANBY UTILITY BOARD; DONALD R. CLAYHOLD, MANAGER, 

 BENTON COUNTY PUBLIC UTILITY DISTRICT, WASHINGTON, 

 ON BEHALF OF NORTHWEST IRRIGATION UTILITIES (NIU); 

 AND WILLIAM P. KITTREDGE, DIRECTOR, SPRINGFIELD 

 UTILITY BOARD 



STATEMENT OF JOHN D. CARR 



Mr. Carr. Good afternoon, Chairman. I am John Carr, with the 

 Direct Service Industries, the customers that purchase approxi- 

 mately 30 percent of Bonneville's power. I will even stand in today 

 for the shareholders of 30 percent of the power since we are end 

 users. I point out that approximately 60 percent of Bonneville's 

 total sales ultimately go to large industry and some agriculture. 



I will not spend much time on the need for the changes in the 

 competitiveness side, I think Randy and other people did a real 

 good job of lajdng that out. I will try to put a different twist on it 

 though quickly. 



For Bonneville to be competitive, it must participate in a com- 

 petitive market. And it is as important that the market is competi- 

 tive as it is that Bonneville makes efficiency changes. I find when 

 I look in my crystal ball that there are basically four things that 

 need to happen to have a competitive market. 



First, tiered rates need to be established. I strongly support the 

 concept of tiered rates, but I think we should not use them to try 

 to do everjrthing. We should try to keep their means simple. 



What I would recommend is that we basically vintage the rates, 

 we vintage the existing costs into tier 1. When I say existing costs, 

 I mean fish and wildlife, I mean exchange costs, and all the other 

 costs that go with the hydro, supply system costs, all those go into 

 tier 1. Tier 2 then becomes the costs of new resources, whether it 

 be conservation programs or generation resources. And in the best 

 of all those worlds, those would be sold on a bilateral basis. If Bon- 

 neville could actually contribute a service for a new resource or a 

 conservation program that was better than the alternative in the 

 marketplace, a utility could purchase that. 



The second thing that needs to happen is, at least in the region, 

 common carrier status on the Bonneville transmission system. We 

 need to have access for DSIs and other customers, so that if they 

 want to bring in their own resource, they have access to the trans- 

 mission in an unbundled way, to get that to their load in a cost- 

 effective way and in a non-prohibitive way. 



