Ill 



Mr. Hardy. No, sir. Let me describe it to you, Congressman. I'm 

 perhaps more comfortable with the Canadian sources than you are. 

 We have an ongoing set of 



Mr. Smith of Oregon. I haven't said anything about Canadian 

 sources. I'm talking about development of equally cost-effective 

 American resources, that's all. 



Mr. Hardy. We have an ongoing relationship with the Canadi- 

 ans. I feel pretty comfortable given our ongoing business relation- 

 ship, particularly with BC Hydro, that we've got enough 

 interconnectedness. There are a series of issues on the table, but 

 I don't think that anyone would take any action in DC that would 

 disrupt those other commercial arrangements. 



Mr. Smith of Oregon. I'm just mSdng the point that in these 

 days of drastic reduction in job opportunities and a change from 

 the timber industry, evidently, to something else, what we do best 

 in the Northwest is grow trees, which we're not going to be allowed 

 to do, and we also develop energy cheaply. 



It seems to me that if we have potential, especially in Oregon 

 and the Northwest, to develop energy at least equally cost-effective 

 with the Canadians, create jobs in communities that are losing 

 jobs, that's where we ought to go. Is that wrong? 



Mr. Hardy. No, sir. 



Mr. Smith of Oregon. Thank you. 



Mr. DeFazio. I thank the gentleman. We'll engage in another 

 round here. Ms. Hickey stated that I guess the levelized computa- 

 tion, and I believe we're using 1993 dollars, is 38 mills for Tenaska. 



Mr. Hardy. That's true, 1993 dollars. 



Mr. DeFazio. That's an overall assertion, but some parts of the 

 information regarding the contracts are confidential. What parts 

 are confidential that relate to the price of gas and so forth? 



Ms. Hickey. In negotiating with the independent power pro- 

 ducer, they were seriously concerned that the specifics of their gas 

 prices and the nominal price stream, the year-to-year pa5Tnent that 

 we would make on a per-kilowatt-hour basis be kept confidential. 

 They felt that if that information would become available, then 

 their competitors could readily assess exactly how they had put to- 

 gether the deal, what kind of gas contracts they had achieved, and 

 their competitiveness would be eroded. 



Mr. DeFazio. So there are no escalators in your contract for fii- 

 ture gas price increases. 



Ms. Hickey. There is a fixed fee of prices year-by-year and there 

 are no escalators with those prices that can vary, no. 



Mr. DeFazio. So a fixed fee priced year-by-year which comes out 

 to the 38 mills levelized, 1993 dollars. 



Ms. Hickey. That's right. 



Mr. DeFazio. One other point before I go over to the Council on 

 this. My understanding is that sometime during either the Reagan 

 or Bush years that your proposal to apply externalities, CO2 or 

 whatever, to the cost of these in making estimates, that BPA made 

 a proposal and it was, shall we say, disapproved and that you at- 

 tributed, what was it, 1 mill or is it 2 mills to this project? 



Ms. Hickey. Actually, at this point, we were proposing to quan- 

 tify the damage estimates for carbon dioxide, and through a dia- 



