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Answer a: The issue of a one-year surcharge for FY 1994 is pending in the current rate 



proceeding, a formal, on-the-record, quasi-judicial hearing At the conclusion of 

 the hearing, the BPA Administrator is required to determine this issue, among 

 others, based on the evidence in the record. The Administrator is precluded by law 

 fi-om determining issues pending in the rate case before it is concluded and 

 therefore cannot yet state what the Administrator's position or decision will be on 

 this issue. 



BPA staff, however, stale that a surcharge would reduce the overall relative rate 

 increase for the two-year rate period A rate surcharge would assign risk 

 coverage funds to the year in which they are needed. This would reduce the 

 overall relative rate increase compared to a rate design where risk coverage is 

 ievelized over the 2-year rate period BPA's customers universally oppose the 

 surcharge concept, arguing that the first year rate would be too high and 

 disruptive 



A number of other proposals aimed at reducing the rate increase have also been 

 made by parties to the case. These are under review as well. 



Answer b: Since this issue is pending in the current rate proceeding as well, the Administrator 

 is precluded by law from determining issues pending in the rate case before it is 

 concluded and therefore cannot yet state what the Administrator's position or 

 decision will be on this issue. BPA staff, however, states that the cost of the 

 irrigation discount does not affect the level of BPA's revenues. This is because the 

 cost of the discount is made up by BPA's other customers. Therefore, lowering 

 the amount of the discount or elimination of the discount merely shifts part of the 

 rate increase to irrigators from all other power purchasers 



