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TESTIMONY OF DON CLAYHOLD 



ON BEHALF OF 



NORTHWEST IRRIGATION UTILITIES 



BEFORE THE 



UNITED STATES HOUSE OF REPRESENTATIVES 



COMMITTEE ON NATURAL RESOURCES BPA TASK FORCE 



My name is Don Clayhold. I am the Manager of the Benton 

 County PUD. The Benton County PUD is a Washington municipal 

 utility district headquartered in Kennewick, Washington. The PUD 

 provides retail electric service to consumers in Benton County, 

 Washington. The Benton County PUD is a full requirements 

 preference customer of the Bonneville Power Administration ("BPA") . 

 Approximately 18 to 20 percent of the Benton County PUD's annual 

 power sales are for irrigation usage. 



I provide this written testimony on behalf of the Northwest 

 Irrigation Utilities ("NIU") , of which Benton PUD is a memtoer. NIU 

 is a utility association comprised of public utility districts and 

 rural electric cooperatives in Washington, Oregon and Idaho. All. 

 NIU members are preference customers of BPA. All NIU members 

 purchase the majority of their power from BPA and most are full 

 requirements customers. A significant percentage of the annual 

 power sales of all NIU members is for irrigation usage within the 

 BPA service area. More than half of the region's irrigation load 

 served with BPA power is seirved through NIU members. NIU members 

 represent about 90% of BPA's preference customer irrigation load. 



NIU appreciates the opportunity to present its views to the 

 Committee. Your letter of August 25, 1993 inviting NIU to testify 

 at this hearing identifies a number of important issues facing BPA. 

 One of those issues, the irrigation discount, is the principal 

 focus of my testimony. However, consistent with your letter, I 

 will refer to other issues mentioned therein as an overall 

 framework for my comments. In particular, I will address the 

 continuing justification for the irrigation discount in light of 

 BPA's top to bottom review of BPA operations, which has come to be 

 known as the "Competitiveness Project". 



I. Summary . BPA has had an irrigation discount as part of its 

 general rate schedules for approximately 50 years. Historically, 

 the irrigation discount was based on the low cost and availability 

 of surplus power during the summer irrigation season. Continuation 

 of the irrigation discount, or an equivalent summer only rate, 

 remains justified based on BPA's low cost of service during the 

 "off-peak" summer period, and the system benefits provided by this 

 unique summer only load. 



The key fact about BPA's budget is that costs are driven by 

 the obligation to acquire additional resources and transmission 

 capacity to serve BPA's growing winter period loads. This will be 

 increasingly true as the Northwest moves from the power surpluses 



