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Last year, as the potential for a large rate Increase became clearer, Bonneville 

 conducted it's public budget review process. Programs in Perspective. As a 

 result of Programs in Perspective, we reduced costs by $270 million and were 

 able to reduce an 1 8 to 20 percent projected rate increase to the 1 1 .6 percent 

 initial rate proposal announced in January. 



The events of the last three months, however, have put us in a crisis situation. 

 Due to the continued drought conditions and depressed aluminum market, we 

 are now estimating our rate increase will be significantly higher-substantially in 

 excess of 20 percent if no further action is taken. In addition, we are in the 

 "danger zone" concerning our ability to make a full Treasury payment this year. 

 These levels of Treasury payment risk and rate increase are simply not 

 acceptable. 



COST REDUCTIONS 



Extraordinary measures are needed to meet this extraordinary situation. To 

 meet this unprecedented situation, we are taking three immediate actions. 



First, we will cut administrative costs by 50 percent for the remainder of fiscal 

 year 1993. We will do this by: 



• Limiting travel; 



• Eliminating most training; 



• Reducing use of overtime; 



