180 

 Mr. DeFazio. Thank you. Mr. Canon. 



STATEMENT OF KENNETH CANON 



Mr. Canon. Thank you, Mr. Chairman. My name is Ken Canon, 

 executive director of Industrial Customers of Northwest Utihties. 

 That is a trade association that represents 24 Northwest industries 

 that purchase power both from investor-owned utihties and from 

 pubhcly owned utihties in the Northwest. We have the pulp and 

 paper, aerospace, chemicals, cement, electronics, and wood products 

 firms as part of the association. 



I think as we look at this issue and the issue that you and the 

 task force pose, what it comes down to is a question of who devel- 

 ops resources in the future. Essentially, both Bonneville and the 

 utilities have the same resource options. You have conservation, re- 

 newables, thermal power resources. 



Bonneville does have the advantage of having a large hydro sys- 

 tem to be able to do the melding that John mentioned, but that 

 hydro system has also suffered its own constraints. So Bonneville 

 is losing some of that capability. 



And there are more options out there for the other utihties to 

 look at developing their own resources. So if you assume that both 

 do have the same resource option, then what's going to be the dif- 

 ferentiation in the future? 



To us, it seems like it's going to be a question of who can best 

 manage and balance both the short-term and long-term costs of a 

 wide variety of resources. I think that's something that we see all 

 the utihties going through as they go through their least-cost 

 plans. Now we're starting to see Bonneville and we're very encour- 

 aged about Bonneville going through it as they go through both 

 their function-by-function review and also their competitiveness 

 project. 



It's going to boil down to those two processes, I believe, being 

 BPA's best hope of remaining competitive and, therefore, becoming 

 and essentially retaining its role as a major resource developer as 

 far as an acquirer of resources in this region. 



If they fail, then I think we're going to have a much more 

 bulkanized type of system which is not the regional system that we 

 foresaw in 1978 through 1980 as the Regional Act was developed. 



Let me spend a few moments talking about something that is 

 specific to the people that I represent, and that's industrial con- 

 servation, because there we see a glimmer of hope as far as Bonne- 

 ville recognizing new ways of doing business and we would like to 

 encourage that. 



In the Lower Columbia Region Office, they have developed a pro- 

 gram which is called "major plants." They, very smartly, we be- 

 lieve, identified most of their industrial conservation was going to 

 come from about 13 major industrial plants and they formed a 

 major plants program. 



It was a program and is a program which has a considerable 

 amount of flexibility. It's premised on a long-term look and inter- 

 action between Bonneville, the utility, if they want to become in- 

 volved, and the industry. So far we've had one plant, the Gardner 

 Plant of International Paper, that has gone through that process. 



