369 



Mr. DeFazio. Clearly we have some discussion that could per- 

 haps take place on the panel, some varjdng views on a number of 

 issues. 



Mr. Carr, in talking about transition, you think that BPA should 

 assume common carrier status. I was a little curious how you envi- 

 sion this working. How do you reimburse someone for lost oppor- 

 tunity costs, seasonal exchanges, which could be displaced for their 

 contracted load, for their preference customers? I mean we are just 

 going to open this up to highest price bidders, is that the idea? 



Mr. Carr. No, I guess that was not my vision. I think it is more 

 along the lines of looking at what is needed in a competitive mar- 

 ketplace. The basic thing that is needed is for customers to have 

 the same ability to get transmission access from Bonneville at the 

 same price Bonneville would provide itself, to basically integrate a 

 new resource into a load. Let me just take a simple example 



Mr. DeFazio. I get it, I get it. That leads to another question. 

 We have had some discussion of the value of reserves, the variable 

 rate, somewhat critical, and we may get into that. The question 

 would be, given that viewpoint that everybody should have the 

 same access as BPA has to put its own load on, on the one hand 

 you are getting a preferred rate over here from BPA and on the 

 other hand you want to be able to access their system so that you 

 can go out elsewhere and see if you can find someone else to pro- 

 vide intemiptible power or whatever else, at a slightly lower rate. 

 You know, it just seems to me those things are kind of at cross pur- 

 poses. One is a very free market approach and the other seems to 

 me to be a subsidy approach. Now how do you reconcile those two 

 views? I have got a problem with that. I mean, on the one hand 

 you are exposing BPA, I think, to great risks. I have some grave 

 concerns about some of this access, and what it could means in 

 terms of hurting us for seasonal exchanges and things like that. 

 And on the other hand, in fact in your testimony you suggest that 

 we should have an even lower floor on the variable rate. You know 

 I have written a letter to the President asking that, with a whole 

 wide range of metals, he begin to deal with by dumping Russia. 

 Unless we do something about Russia, aluminum prices are not 

 going up until they fall apart over there, because it does not cost 

 them anything to produce it. They have no market economy. 



Mr. Carr. Let me take them one at a time. 



Mr. DeFazio. Sure. 



Mr. Carr. My sense on the Russian situation is that we are 

 going to see over-production from the old Soviet Union republics for 

 a long time to come. It is going to take a long time for their de- 

 mand internally to equal their current supply capability on alu- 

 minum. We are going to see in an international market sense, it 

 is about like having another smelter or two out there producing — 

 or a brand new smelter to come on line that would cause supply 

 to be greater than demand. But there are two sides to the equation. 

 The other one is demand, and I guess my sense is that over the 

 next several years — at least I am hopeful — we will see the other in- 

 dustrialized countries' economies picking up and demand picking 

 up there. That, coupled with the U.S. economy hopefully moving 

 ahead, will cause demand increase enough to eat into and really 

 make up for all that oversupply. 



