104 



Ms. HiCKEY. We're also saying in this case we're even willing to 

 take the risk if the customer is because the risk is actually on them 

 when the environmental work is over. If it ends up being defeated 

 as an acceptable environmental document, then that extends the 

 timeframes. But if they're willing to take that risk, we're willing 

 to go forward on that basis. 



Mr. DeFazio. Because a number of potential contractors have 

 said we feel we have done the work and BPA is rejecting it, requir- 

 ing an entirely new review. 



Ms. HiCKEY. Definitely. 



Mr. DeFazio. So you're going to say to them, okay, here is the 

 disclaimer. 



Ms. HiCKEY. That's right. In addition, we've drafted contracts al- 

 ready and billing credits that will be essentially standard-offer con- 

 tracts that take care of a lot of the small resource concerns. Billing 

 credits is not the best example of risk aversion because it's actually 

 a situation where Bonneville has some of the lowest risk. 



But we've moved dramatically to take care of the concerns that 

 were raised in that report. It was a very helpful report for us. 



Mr. DeFazio. I don't know if you had an opportimity, for in- 

 stance, to read Mr. Berggren's testimony. Well hear from him 

 later, but he talks about the experiences of EWEB in dealing with 

 BPA and the fact that they had not even yet had a negotiating ses- 

 sion. Their proposal has been on the table quite a long period of 

 time; yet, you've acquired Tenaska during that interim period. 



He raises the question which I think is impHcit in all this. Can 

 we assume there's no risk with Tenaska or that somehow the risks 

 related to Tenaska are of some lesser degree. It seems to me these 

 small projects proposed by individual utilities have inherently less 

 risk than this one massive project with the secret clauses attached, 

 which we'll get into later. 



Ms. HiCKEY. I think that's definitely the case. We're protecting 

 against very different risks in different cases. Could I try to set 

 sort of a model up for you. Bonneville has viewed itself as a bujdng 

 agent. We're generally buying from one customer for the benefit of 

 all customers, and we're trying to balance getting benefit for all 

 customers against that one resource developer. 



On the generation side, we've principally been concerned about 

 capabiUty-type contracts, the kind of contract we signed for the nu- 

 clear plants in the 1970s, where whether or not they ever produce 

 a megawatt of energy, we were paying the cost. So the generating 

 projects we're signing tend to be more output oriented. 



On the conservation side, our concern has always been about ver- 

 ification, to assure that we're getting reliable savings. On the com- 

 petitive bid, I have read Mr. Berggren's testimony and he's bring- 

 ing up a special instance that is particularly embarrassing. 



We went out for a competitive bid and had much more difficulty 

 than a retail utility would have had because we were soliciting for 

 energy service companies to operate within our own customers' 

 service areas. So we had a couple of additional hoops to jump 

 through. But I really would not extend too far trying to make ex- 

 cuses for us. This is actually an area where we just have not done 

 well in responding to the competitive bids for conservation. We're 



