397 



Northwest Irrigation Utilities 



|503| 233-5823 



Fax (S03| 233-3076 



825 NE Multnomah, Suite 1015 • Portland, Oregon 97232 



October 28, 1993 



The Hcnorable Peter DePazio 

 U.S. House Representative 

 1233 Longworth H.OB. 

 Washington, DC 20515 



Dear Representative DePazio: 



At your September 25, 1993 hearing in Eugene, Oregon, I testified on behalf of the Northwest 

 Irrigation Utilities in st^jport of cost-based rate treatment for irrigation pumping loads. 

 During the comment exchange between yourself and members of Panel HI, you addressed a 

 statement to me that summer energy may have a higher value to the Pederal base system in 

 the form of exchanges with southwest utilities. We have discussed this issue with the 

 Bonneville Power Administrative market specialists. Based on these conversations, we would 

 like to share two major points relating to sununer energy values. 



Several factors effect the Bonneville- California Utilities Power Exchange. First, the available 

 secondary energy for export to California depends significantly on water conditions. During 

 an average water year, the available secondly energy to California exceeds their market 

 demand and the PNW-SW inertia capacity during the months of May and June. In July, 

 likely California market demand would be essentially equivalent to secondary energy. During 

 a low water or near low water period, there would not be any secondary power available to 

 California, except in May. Secondly, the price of the power being sent to California should 

 be considered. E>uring the months of Juty and August, power sales to California reflect the 

 variable costs of the resources being displaced by the California utilities - namely, the 

 variable costs for gas and coal-fired plants. These power prices are in the 10 to 25 mills/kwh 

 range, a price range that is similar to the summer energy costs for Bonneville's PP customers. 

 The timing and cpiantity demanded for power purchases determine whether prices to 

 California utilities equal or exceed in-region power prices. 



Thus, it appears as if the question you raised does not have a "simple answer," but one based 

 on assumptions and conditions. In that regard. Northwest Irrigation Utilities (N.I.U.) will 

 continue to work with Bonneville and other interested parties in the development, review, and 

 application of these planning parameters. 



IrngaDon • Agriculture • Energy 



