370 



Mr. DeFazio. The question is how long does that take and how 

 long do the Northwest ratepayers eat it and how long before we get 

 to a point under the current system where we cross that line. 

 Under your proposal, if we drop it even lower in the short term for 

 the floor, I mean it seems to me it would take even longer into the 

 future before we recoup that investment. 



Mr. Carr. But I certainly was not arguing for dropping the floor 

 now. What I was saying is that come 1996 the variable rate ought 

 to be put on the table and it ought to be a bilateral discussion. My 

 thinking is that there probably are some changes in the variable 

 rate going both ways — some that benefit Bonneville's other cus- 

 tomers, some that make the variable rate better for industry — that 

 has everybody come out in a win-win situation. I certainly would 

 not argue for it being a subsidy; I do not think it is a subsidy now. 

 In fact, you know, I cannot help but observe that 3 years ago when 

 the variable rate was 6 mills above the IP rates and the companies 

 were paying $10-15 million more a month than they would have 

 under the IP rate, I did not hear anybody else out there arguing 

 that the DSIs were subsidizing the public utilities, and by gosh 

 that ought to stop right now. Things have turned around. 



Mr. DeFazio. No, but I can give you some other example. I think 

 my lumber and wood products folks would like to be able to get 

 onto a variable rate. I think Dow over in Springfield would like to 

 get onto a variable rate. They are having the same problems in the 

 international market that the aluminum companies are. I think 

 Teledyne would like to get onto a variable rate. I think Ormet 

 would like to get onto a variable rate. Probably Boeing would like 

 to get on a variable rate. 



I think all the IPs would like to, and the question is, you know, 

 at this point, in those discussions then maybe we should open up 

 this idea to all industrial consumers and large loads as opposed to 

 just one particular segment of the industry. 



Mr. Carr. I guess from my standpoint, I am not willing to pre- 

 judge it. I think a lot of people are taking positions — not a lot — 

 some people are taking positions on the variable rate as if it is a 

 unilateral negotiation, that it is just a thumbs up or thumbs down 

 by Bonneville. I guess I look at it as a bilateral negotiation. It has 

 to be good for us before we are going to sign up for it, and it had 

 better be good for the customers for them to sign up for it starting 

 in 1996. And I would make the same argument under the value re- 

 serves. Some people are talking about almost negotiating positions 

 where, as if it is a unilateral decision on Bonneville's part, only $20 

 million, only $10 million. My recommendation is we open up the 

 marketplace and make it a bilateral negotiation. If Bonneville's 

 customers only want to pay $20 million, but Puget and Pacific want 

 to get together, and for different pieces of their reserves, they are 

 willing to pay $50 million or $100 million, so be it. I mean that is 

 where I would have it come out. So that we put it out there in the 

 marketplace and see what it is worth. 



Mr. DeFazio. So that is your rationale for the transmission, why 

 you w£int this new free market transmission is so that you could 

 bid out, say, the value of reserves. 



