12 



In summary, in generation, I think it will be pretty clear after 

 today that we've had process difficulties. We've been in the genera- 

 tion business for only 2 years. We probably got out a bit ahead of 

 ourselves with some of the experiments we were running. 



We feel we've learned substantially from each process to the 

 point that we think our current billing credit process is a model for 

 the way we might want to do things in the future. We're pleased 

 with the results that we've achieved. We have a good portfolio of 

 resources by type, by size, by location, as well as by the customer 

 sponsorship of proposals. 



Our prices are 10-15 percent below what we anticipated they 

 would be when we entered the market. So we're extremely pleased 

 with the prices. We're on target to purchase the megawatts that we 

 committed to purchase. In fact, we might be a Uttle bit ahead. 



We think we've been advantaged considerably by what's going on 

 both with gas turbine technology, as well as gas prices in the mar- 

 ket. It's helping us create a real competitive atmosphere both for 

 conservation and generation, and the gas resources, as Randy 

 pointed out earUer, add substantial advantages in being 

 dispatchable, which is an excellent fit with the hydro system. 



Finally, in going through the 6(c) review with the Council on our 

 large CT project, we're feeling that this portfoHo is substantially 

 consistent with the Council plan. 



Mr, Hardy. I'd just like to finish by making three points in con- 

 clusion. First, we are absolutely committed to the 660 megawatt 

 conservation goal and to go beyond that if, in fact, there is more 

 cost-effective conservation out there to be achieved. 



I would make one point relative not just to conservation acquisi- 

 tion, but to almost all of our programs, and you'll probably hear 

 more about this in the competitive hearing next month. For most 

 of the 1980s, the measure of effectiveness for our conservation pro- 

 grams was amount of money spent. That is no longer a vaUd meas- 

 ure of effectiveness, in and of itself. 



The valid measure of effectiveness for conservation or any other 

 resource acquisition program ought to be number of cost-effective 

 megawatts acquired. It's not the amount of money you throw at the 

 problem. It's the results you get that determine yoiir success. 



We're focused on the results and there is probably no better indi- 

 cator of that than what our expenditure levels are versus what ef- 

 fect tiered rates might have relative to a megawatt acquisition tar- 

 get. 



Finally, I'd just make the point we think our generation program 

 is a balanced mix of resources that optimizes both the cost and the 

 reUability and the risk associated with the system and we think 

 that, too, is the best way to go about acquiring the resources. 



Thank you, Mr. Chairman. 



[Prepared statement of Mr. Hardy follows:] 



