374 



Mr. Carr. I do not think the issue of the reserves, the variable 

 rate, I do not think those are getting punted to 1996. I think those 

 will be all part of the unbundled services that we talk about. In 

 terms of whether you think about it from Bonneville's term, it is 

 a marketing plan, or you think about it from the buyer's stand- 

 point, a purchaser's plan, but that has got to be part of the whole 

 package that goes in the new power sales contract that is offered 

 in late 1995. I think those issues will be on the table and I think 

 over the next year and a half to two years, that they will get a full 

 debate, and I am looking forward to it. 



Mr. DeFazio. Go ahead, Mr. Clayhold. 



Mr. Clayhold. Mr. Chairman, the concern I have about this dis- 

 cussion, it sounds like we are going down a track here that sug- 

 gests that the FBS, or a piece of it, be put out to the highest bid- 

 der. And I think that would probably 



Mr. DeFazio. No, he is offering a new construct and I am trying 

 to get other people to react to it to see where we are headed. 



Mr. Clayhold. I understand that. If I understood John Carr cor- 

 rectly, it centered around the DSI being able to market their re- 

 serves somewhere else, and I am wondering really where that re- 

 serve comes from. That is a piece of the FBS. Is there an ownership 

 right in that, that they could just simply auction off? 



Mr. DeFazio. How would you respond to that — he's saying that 

 it is a piece of the FBS that you want to market essentially. 



Mr. Carr. I do not think so. I guess what I am talking about 

 marketing is the interruptibility feature of our loads, and having 

 both a market on the supply side, which I think the Chairman was 

 alluding to earlier from Boeing or whoever else wants to — or even 

 a new combustion turbine, somebody — there are all kinds of ways 

 of providing reserves. And then on the demand side, I was arguing 

 that Bonneville should not be the unilateral buyer, we need more 

 buyers in there. But it would not be marketing away any of the 

 FBS; it is only the rights to restrict the DSIs' load or the reserves. 

 Now again I said it earlier, I think those reserves are very valuable 

 and that they are best suited to the federal system loads, but it 

 cannot be a unilateral discussion or we are going to get to an ineffi- 

 cient result. 



Mr. DeFazio. Okay. 



Mr. Clayhold, a question for you. You know, I think there are a 

 lot of arguments to be made for an irrigation rate, you know, rural 

 communities, agriculture and that, but I have got a problem with 

 the one key argument which you reiterated a number of times, 

 which is the argument about the seasonality, because things have 

 changed a little bit since the first environmental exchange agree- 

 ment. Seasonal agreements were negotiated a number of years ago 

 by then-Administrator Jura with California. We are finding that 

 there is at this point great value in being able to provide firm 

 power to California markets during their peaking season and to get 

 compensated during our peaking season. So the seasonality issue 

 I think has changed quite a bit, given that. And then there are two 

 other corollary issues: One would be that in addition to the change 

 in the seasonality, the other major change we are looking at is we 

 want to keep water in the river. And if we encourage withdrawal 

 of the water through inefficient use, then we have to make up for 



