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of the 1980s into a period of resource acquisition in the 1990s. 

 Increasing constraints on the storage of water due to fish flow 

 requirements adds to the need for additional resources to meet 

 winter demand while causing additional low cost hydropower to be 

 available in the summer. 



Irrigation has not and it will not cause BPA to incur 

 additional resource costs. Irrigation is a non-growing summer only 

 load. BPA's irrigation load is projected to remain non-growing 

 indefinitely. Irrigation adds nothing to BPA's winter peak 

 requirements. Irrigation places demands on the BPA system only at 

 times when BPA's seasonal demand is low. 



Due to the seasonal nature of regional demand in the Northwest 

 and the way the federal power system is being operated, irrigation 

 has become an increasing valuable load for BPA. Irrigation 

 provides BPA with a reliable 24 hour a day load during June, July 

 and August, precisely when BPA's other regional loads are at their 

 low point. This is especially important because the requirements 

 for fish flows have increased the amount of hydropower which BPA 

 must market during the summer period. 



In short, continuation of the irrigation discount is justified 

 based on the cost of service to irrigation. BPA is not required to 

 incur new cost to serve irrigation. A seasonal irrigation rate 

 mirrors the seasonal nature of electric demand in the Northwest and 

 it complements the operational requirements of the federal system. 



II. History of Irrigation Discount. I would like to provide the 

 Committee with some history concerning the irrigation discount. 

 There may be a false impression that the irrigation discount began 

 in 1985. That is incorrect. With the exception of a six year 

 hiatus from 1979 to 1985, the irrigation discount has, in various 

 forms, been a part of the BPA general rate structure for over 50 

 years (see attached Exhibit 1, "History of Irrigation Discount", 

 from "Irrigation Discount Background Paper", BPA, November 21, 

 1991) . 



Historically, the irrigation discount was based on the low 

 cost and availability of surplus power in the summer irrigation 

 season. Beginning with the 1985 rate case, BPA has justified the 

 irrigation discount primarily as a response to economic uncertainty 

 in the agriculture sector and the need to preserve the revenues 

 provided to BPA by this load. Since 1985, BPA's justification for 

 the discount has not addressed the cost of serving this load and 

 its long term value to BPA and its ratepayers. 



It is unfortunate that BPA has chosen to justify the 

 irrigation discount primarily as a response to economic conditions 

 in agriculture. BPA's irrigation load has unique value to BPA and 

 it is justified on both a cost of service and system operation 

 basis. Irrigation loads occur only during the off-peak summer 



