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of getting at it? How would you assure me on this issue, Mr. 

 Shields? 



Mr. Shields. We submitted comments before this hearing and 

 also one on July 12 addressing least-cost planning. I guess the first 

 distinction I would like to draw is the difference between least-cost 

 planning and least-cost acquisition. You can have regional plan- 

 ning, which I think is the value of the least-cost planning models 

 that the few of us in public utilities that have least-cost planning 

 believe that you do not want to get away from centralized planning. 

 I think the Council's role is a vital role. I think we need a least- 

 cost plan. I also think though that you can have decentralized ac- 

 quisitions of resources and have a least-cost planning process 

 where such as Emerald, who has a least-cost plan, submits that 

 through a review process to ensure that there is consistency with 

 the regional goal. And I think you can get there. 



Mr. DeFazio. But that does not happen. 



Mr. Shields. It does not happen, no, but I think the institutions 

 are in place to see that happen. I do not think you need to create 

 a new wheel — maybe you need to clean a few spokes. 



Mr. DeFazio. Okay, so you would say basically a review for con- 

 sistency much like what BPA has to do now in dealing with the 

 Council, theoretically. 



Mr. Shields. Theoretically, yes. 



Mr. DeFazio. Right, okay. Mr. Scarborough, do you want to com- 

 ment on this? 



Mr. Scarborough. Mr. Chairman, no. We have not really even 

 discussed or talked about that issue to be prepared to talk about 

 it. 



Mr. DeFazio. Okay, that is fine. Mr. Kittredge. 



Mr. Kittredge. Mr. Chairman, the Springfield Utility Board 

 supports least-cost planning. We believe that consistency with the 

 Council's plan needs to be part and parcel of the new unbundled, 

 tiered-rates world, and we think that least-cost plans that are re- 

 viewed for consistency by the Council, if a utility chooses to go for- 

 ward with a resource that does not meet that review standard, they 

 would certainly be free to do so. But we think that in doing so, they 

 should reduce their tier 1 allocation by the same amount. That 

 way, the region is held harmless for their decision, and we get the 

 accountability that SUB feels is lacking under the current system. 



Mr. DeFazio. So they would have essentially a permanent, vol- 

 untary ceding of the tier 1. How would you redistribute the tier 1? 



Mr. Kittredge. The tier 1 would be redistributed, a portion 

 through the tier 1 ratepayers, or tier 1 customers. 



Mr. DeFazio. Proportionately? 



Mr. Kittredge. That is correct. As would any reduction or in- 

 crease. For instance, if the fish flow requirements were to lower the 

 capacity of the system to produce tier 1 resources, then some pro- 

 portional decrease would be passed through. 



Mr. DeFazio. Do you have any reflections on that, Mr. Clayhold? 



Mr. Clayhold. Least-cost planning came up a couple of years 

 ago in the State legislature I believe in Washington State, and the 

 PUDs committed to the concept of least-cost planning. It was not 

 embedded in the state law, however. We encouraged it not to be. 

 I am troubled with this — not the least-cost planning, I think it is 



