372 



The load at that point in time that was estimated was needed 

 was about 1,288 megawatts and this is back in 1981. In the rate 

 hearings in the 1993 rate case, Bonneville's people estimated that 

 the load needed to be somewhere between 600 and 800 megawatts. 

 At the time that the methodology was put together, the interest 

 rate at that time was 14 percent and that currently is still what 

 the interest rate is. That has been frozen. So what we are looking 

 at is that (1) the load is inflated, and (2) the interest rate is way 

 out of line. And it should have been adjusted sooner. 



Mr. DeFazio. Well how about the idea Mr. Carr has put forward, 

 which is if indeed it is valuable to Bonneville to have these re- 

 serves, and I think there is certainly some arguments about that, 

 that we essentially, as we make the next rate case, put out the re- 

 serves for bid. That is, DSIs could bid on providing power in that 

 kind of load shaping, interruptibility, whatever, to BPA, and other 

 industries could bid. Would you think that is a way to get at this? 



Mr. Scarborough. I think we need to get it back at market 

 rates, yes. The thing that I have a concern is that we have frozen 

 it. 



Mr. DeFazio. Well yes, I mean that is doing it on a calculated 

 basis for one industry. What he is proposing is a very different 

 model, which would be, hey, if say even Boeing wants to take a risk 

 or someone wants to take a risk, they may be able to get a discount 

 on their power but they are taking a risk. I mean in the past, it 

 has been more suitable for the aluminum industry because of the 

 way pot lines work and that, but there may be other industries out 

 there that are interested in bidding on this, and to put it out for 

 bid, maybe you want to establish a floor value of reserves, you 

 know, or something through the evaluation process. But instead of 

 just fixing the value, see what the market would provide. That is 

 an alternative. 



Mr. Kittredge. 



Mr. Kittredge. Mr. Chairman, I think Mr. Carr is representing 

 the people that employ him very well, but I think that some of his 

 comments are somewhat disingenuous. It is certainly true that the 

 DSIs paid more for electricity at some point. However, every single 

 moment of that time, they were making money for their stockhold- 

 ers and they were doing that from the FBS. The idea that somehow 

 or another the transmission should be used to help them raise the 

 value of reserves, which is essentially what he has proposed, pre- 

 supposes two things. It presupposes first that the DSIs have an ac- 

 cess right to the transmission system and it almost presupposes, I 

 think you have to suppose in order to go along with that, that they 

 have a footing equal with PF customers in terms of having a right 

 to the federal-based resource in the first place. 



I do not think either of those things are necessarily true and I 

 think that that changes the basis on which Mr. Carr argues. 



Mr. DeFazio. Okay. Mr. Carr wants to respond. Gro ahead, Mr. 

 Carr. I like it when the panel starts having a discussion and I do 

 not have to provoke things. That is good. 



Mr. Carr. Well maybe I am going to surprise you with the an- 

 swer, but I am a lot more concerned about customers, the public 

 utility customers, having access to Bonneville's transmission sys- 

 tem, than I am about the DSIs. I want to see the situation where 



