245 



STATEMENT OF DAVID PIPER 



Mr. Piper. I am Dave Piper, the general manager of the Pacific 

 Northwest Grenerating Cooperative. We are a generating and trans- 

 mission cooperative that serves 27 distribution co-ops in the Bonne- 

 ville service area, primarily serving the rural areas, the hard-to- 

 serve areas, and the costly ones with few customers. 



These systems are not-for-profit; they are controlled by elected 

 directors elected from the membership. 



PNGrC owns 10 percent of the Boardman project. We have sold 

 the output on a long-term basis to Turlock Irrigation District £ind 

 we are participating in Bonneville's Third AC in order to move that 

 power into California. 



In addition to looking for new resources at this point, we also are 

 basically informal agents of our members, tr5dng to deal with the 

 issues before Bonneville, looking out hopefully for their best inter- 

 ests and power supply. 



Rather than echo all of the things that been said about the need 

 for Bonneville competitiveness from this morning's session, I 

 thought I might give you some practical experience, things that we 

 are going through right now in dealing with these issues at PNGC 

 on behalf of our member systems. 



We are required to do least-cost planning. The federal agency 

 under which we have borrowed money historically, REA, requires 

 a least-cost plan for co-ops that are financing any generating re- 

 source. And certainly from our members' standpoint, it makes 

 sense to do least-cost planning. We are not in business to do any- 

 thing other than provide them with the least-cost and most reliable 

 power. 



As we look at resources, the 30 mill resource has been thrown 

 around this morning, and people are accurate when they say that 

 is a busbar cost. There would have to be added to that the services 

 that are appropriate and necessary. But I can tell you there are 30 

 mill resources — at least people are telling us they can develop 30 

 mill resources — ^with relatively firm gas prices. To that you have to 

 add the services that are necessary, and there are a lot of those out 

 there. They may not be the best thing in the world, but as Bill 

 Drummond said this morning, there is risks in staying where we 

 are. And so what we have to evaluate is the forecast for the Bonne- 

 ville rates in the future under the present structure of average 

 costing. We have to evaluate not just today's price of 27 or 28 mills, 

 but we have to evaluate where we think that is going. The uncer- 

 tainties surrounding that right now put a tremendous delta or 

 range band-width in what those future costs can be. 



Granted there is uncertainty when you are dealing with combus- 

 tion turbines and any other resource as well, and we have to face 

 those and make hopefully consciously good decisions. 



Our strategic plan at PNGrC is to provide 25 percent of our mem- 

 bers' total load by the year 2000, if we can do it effectively on a 

 cost basis. I am not here to tell you that that is possible, but we 

 are certainly evaluating and tr3dng to find any of those resources 

 that we can do that. That is under the present pricing structure 

 from Bonneville. 



Alternatively, if and when we go to tiered rates, we are convinced 

 that we can provide resources cheaper than Bonneville and we will 



