52 



Mr. Hardy. That is true. If you are talking about the $150 mil- 

 hon, roughly, that we will receive from other utilities who would 

 purchase their own ownership shares of the 50 percent of the third 

 AC Intertie we have constructed. 



Right now, the problem that we have is that we have committed 

 to the Congress, the Appropriations Committees and to 0MB that 

 we will handle that money in a particular way; namely, we will 

 take it in and use it to retire outstanding debt obligations. We have 

 committed to that in this year's budget to both the Appropriations 

 Committees and 0MB. 



That being said, what I have told the customers is, if they can 

 prevail upon the forces that be in Congress and in the Administra- 

 tion to change the treatment of that, recognizing that this is an 

 emergency kmd of situation, we will do all we can to try to treat 

 the money in that way. 



I would tell you frankly, I am in a position of having made com- 

 mitments to both the Congress and 0MB that I feel I cannot uni- 

 laterally change. So that ball is squarely in the customers' court to 

 take and run with and try to muster the political wherewithal to 

 get those changes. 



That being said, it is worth 3-4 percentage points on this year's 

 rate increase if we were able to use the full $150 million that 

 would make a significant difference. Now that would push the 



Eroblem into 1996, which would affect next period's rate increase, 

 ut if we had good water and better aluminum prices and things 

 like that, we might be in a little better position to deal with it at 

 that time. 



Mr. DeFazio. I thank the gentleman and go on to my next round 

 and come back to him if he has more questions. 



Just to reflect on some of the questions about conservation, I 

 think I am supportive of the direction you are headed, which is 

 that you want to keep the targets but look at something that may 

 be dnven in different ways, driven with different sorts of incen- 

 tives. Are we looking at something a little more decentralized? 



You know, one of the common complaints I have heard — and I 

 think we will be looking into some of these things in future hear- 

 ings and hearing from customers — is that some of your customers 

 have developed what they consider to be credible and ambitious 

 conservation plans, but the negotiation process with BPA was just 

 so onerous that many of them ultimately abandoned those plans or 

 otherwise curtailed or changed them undesirably. 



Are we going to be looking at something perhaps that is driven 

 a bit more by targets as opposed to process and bureaucracy? 



Mr. Hardy. We are. Basically, we have done two things. When 

 I first came to the agency a year and a half ago, we started to de- 

 centralize our conservation acquisition operation to give more re- 

 sponsibility to our area offices to acquire conservation. That has 

 been a difficult process with a staff the size we have and with a 

 fairly highly centralized mode of running conservation programs up 

 to that time. 



Now I think we have now pretty well defined for the area offices 

 the so-called envelope within which they can operate. That is, if 

 they can negotiate a contract with certain cost parameters and cer- 

 tain contractual provisions, the area manager has the authority to 



