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STATEMENT OF DONALD R. CLAYHOLD 



Mr. Clayhold. Thank you, Chairman DeFazio. My name is Don 

 Clayhold, I am the manager of the Benton County Public Utility 

 District with its main office located in Kennewick, Washington. 

 That is in southeast Washington. I appear here on behalf of the 

 Northwest Irrigation Utilities, referred to sometimes as NIU. Ben- 

 ton PUD is a member. 



NIU is a utility association. NIU is not an association of 

 irrigators; it is a utility association for utilities that have signifi- 

 cant irrigation pumping loads, made up of PUDs and REA coopera- 

 tives throughout Washington, Oregon and Idaho. We are all pref- 

 erence customers of BPA; most of us are full-requirements cus- 

 tomers of BPA. 



A large percentage of the annual power sales of NIU members 

 is to irrigation consumers. The vast majority of irrigation usage in 

 the Northwest occurs during the summer months of June, July and 

 August — and that is important. Virtually no irrigation occurs dur- 

 ing the winter, and I will expand on why that is important. 



NIU members represent about 90 percent of Bonneville pref- 

 erence customer irrigation load. We have submitted a written 

 statement on this matter. Many of our NIU members, most all of 

 us belong to the other organizations that you have had appear here 

 today, such as PPC, the Public Power Council, Pacific Northwest 

 Generating Company for our co-ops, PNGC, the non-generating 

 utilities, NGU, we belong to that and others. Basically we support 

 the comments and response to the questions that you have sent to 

 these associations. 



We are going to focus on the irrigation discount because that is 

 what we are about. That is this association's focus and the reason 

 why NIU exists. 



Two points I want to make today. First, this is a unique load — 

 irrigation load. It happens during the summer time, £ind it goes 

 away in the winter. No other load that we know of does that or has 

 those kind of characteristics. Because of that, it offers benefits to 

 the system; it offers benefits to Bonneville. A large portion of Bon- 

 neville's costs are incurred to design a system that is winter peak- 

 ing. Irrigation loads normally do not add to winter peaking; they 

 take away from the peak somewhat in that they disappear during 

 the winter. It is our belief that, on a cost-allocation basis, there is 

 a justification for rate treatment for irrigation loads. 



It is probably unfortunate that the term irrigation discount is 

 used. We would prefer an irrigation rate. Discount implies a sub- 

 sidy, and in fact in the last rate case, it was argued by some that 

 we must get rid of these subsidies because they burden other rate- 

 payers unfairly. And our point is, and I think a point made by most 

 of the folks here today testifying, that it ought to be cost-based. If 

 it is truly cost-based, then there will be an irrigation rate that re- 

 flects a lower rate than the general all-around preference rate 

 which has to support the costs of a winter-peaking system. 



The other point that I want to leave you with today is that many 

 of our members of NIU are very rural in nature and upwards of 

 70 percent of their revenue comes from pumping, irrigation pump- 

 ing. And if that were to cease to be there, these very rural utilities 

 would be in deep trouble — they probably could not survive. And 



