55 



December 1993. Recently, with newer information on forecasted stream flows, BPA 

 felt that it could be in a position to offer special service to the first quartile through 

 that period. 



The planning assumptions used in preparing the 1994 Budget and the Initial Pro- 

 posal of the Rate Case do not become operational standards. They are only forecasts 

 of operations based upon the most current information. In the Rate Case, BPA is 

 not stating what will happen during the rate period; instead, BPA is only trying to 

 estimate what revenues and costs would be, based on the most recent input. 



Mr. DeFazio. At least in my recollection, the last major problems 

 we had was some time in the mid-1970s. My recollection is McCall 

 was governor, or maybe it was Straub, but I think it was McCall. 

 There was a great outcry in Oregon for voluntary curtailment of 

 energy use. There was a big debate about car lots, over whether 

 they should be required to turn off their lights at night because it 

 was a security issue, because people might steal the cars, and 

 about outdoor advertising, and other calls for curtailment. I am a 

 little puzzled as to why we didn't ask for some voluntary curtail- 

 ment this year. 



I think the people of the Northwest are extraordinary and un- 

 usual in this country, exhibiting a different spirit than I see in the 

 East in terms of neighborliness and cooperative sorts of responsibil- 

 ity that I think people in the know now would respond well, and 

 I'm curious why we didn't call for some voluntary curtailment while 

 we are in this huge deficit situation and purchasing so much 

 power. 



Mr. Hardy. That is an excellent question, Mr. Chairman. Let me 

 try to explain why we didn't. 



In terms of when we proceed to call for voluntary curtailment, 

 we have reached an agreement with the region's utilities to do that, 

 and it is the governors that do that. It is not Bonneville or the re- 

 gion's utilities; the governors have to make that call and make that 

 request. We have agreed to do that only when we have a genuine 

 power supply emergency as opposed to a severe revenue problem. 

 Right now, we don't have a power supply emergency; we have a se- 

 vere revenue problem. 



If we would have gone out in mid-January when the cold snap 

 hit and called for region-wide curtailments, we would have exacer- 

 bated our revenue problem. The reason that would have happened 

 is just what you have alluded to — the people of the Northwest are 

 very conservation conscious. They would have responded just like 

 they did in 1977, and we would have had about 5 or 10 percent 

 tj^iically less kilowatt hour sales. We would have had the same 

 amount of fixed costs spread over a smaller kwh sales base, and 

 rates would have been forced up even more. 



That is exactly what happened to utilities like Seattle City Light 

 in 1977 when we had region-wide curtailments. We had them in 

 1977 because we had a genuine power supply emergency. City 

 Light and others had a 50 percent drought surcharge. The citizens 

 did their duty, they conserved, and they got hit with a 50 percent 

 surcharge on their power bill. You can imagine the public reaction 

 in Seattle and other places when that became manifest. The conclu- 

 sion that we reached here was that unless we had a genuine power 

 supply emergency we would simply make an already bad revenue 

 problem even worse if we did that, so we have stopped short of 

 doing that. 



