29 



Mr. DeFazio. Thank you, Mr. Hardy. 



I would first recognize Mr. Thomas if he has any opening re- 

 marks. 



Mr. Thomas. No, thank you, Mr. Chairman. 



Mr. DeFazio. Thank you. 



We will proceed to questions, and we will try and hold to the 

 five-minute rules, and I would expect multiple rounds. I could fill 

 up a lot of five-minute segments. So we will begin, and I will take 

 the first five minutes on the settlement discussions. 



The concern is that you formulate a two-year budget, the Council 

 has put forward a program independent of that in but response. 

 You develop a budget; the budget is cleared through, I guess, DOE 

 and 0MB. The concern and part of the reason for holding this 

 hearing is that as you get into rate settlement — and, again, we are 

 not going to discuss the pending rate case or your intentions there- 

 in—but the point is that it seems that policy is potentially made 

 by financial decisions. I am just concerned that we don't break the 

 link here between accountability outside of the agency to the Coun- 

 cil or outside of the region to the Congress and to the administra- 

 tion in those sorts of discussions. I might just leave it at that. If 

 you want to comment on that, you can. Otherwise, I will go on to 

 other questions. 



Mr. Hardy. I would say I agree with you, Mr. Chairman. I as- 

 sume that that is one of the purposes of this hearing and of suc- 

 ceeding hearings. 



I might also observe that in making these program reductions, 

 particularly in the conservation, generation, and fish and wildlife 

 area, we are working very closely with the Power Planning Council 

 to try to make sure that we keep that linkage between policy and 

 our current financial circumstances as tight as possible. 



As a matter of fact, the Council is holding a hearing tomorrow 

 on the Northwest on just this subject. I expect the hearing will be 

 very well attended, and we will have a very spirited debate. We 

 have encouraged the Council to do that, and they were, as a matter 

 of fact, the first group that I sat down with once I concluded that 

 I needed to do something of this nature to try to make sure that 

 we, to the maximum extent possible, could go down this road to- 

 gether. 



Mr. DeFazio. The airlines love us for scheduling these things 

 this way. I assume a lot of the audience will be back there for that 

 hearing tomorrow, although I guess you will be here for other hear- 

 ings. 



Mr. Hardy. Yes, sir. 



Mr. DeFazio. Just a couple of comments before I get to my for- 

 mal questions. 



When you talked about your scope of control and you were talk- 

 ing about the pie chart and pulled out your 25 percent, which does, 

 in fact, to some extent, mirror the Federal budget when we talk 

 about entitlements, but I am curious on a couple of points. We have 

 the other entities, the Corps and Bureau, and you said you could 

 request reduction but you have no control. Have you anticipated or 

 entered into any discussions with them to deal with that? 



I don't know, are they that whole 18 percent, or does some of 

 that 18 percent — ^where does WPPSS operations come in? We have 



