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As our contracts require, the drought forced us to restrict 25 percent of the 

 interruptible portion of aluminum companies' loads in order to meet the firm 

 power needs of all our region's customers. Regretfully, this put people out of 

 work, damaging the region's economy. 



The listing of three species of Snake River salmon as threatened or endangered 

 has also had a deleterious effect on our net revenues. Much of the costs of 

 measures to protect listed salmon is associated v^ith changing the hydrosystem's 

 operation to increase streamflows. The cost of implementing these measures is 

 significantly increased in years when streamflows are low. For example, the cost 

 of meeting our Columbia and Snake River flow obligations for these listed 

 Species is roughly $110 million in 1993. 



Unfortunately, this year has illustrated our extreme sensitivity to weather 

 conditions and aluminum prices. Our system planning incorporates flexibility 

 and safety to ensure reliable system operation; however, the number of severe 

 and unusual simultaneous events occurring this year is clearly unprecedented. 



Should our projected revenues be hammered further by unanticipated events 

 such as extended drought conditions, or the loss of a generating facility, this 

 could seriously Impact our ability to make a full Treasury payment this year. 



