187 



cency in this area, and I want to preface this with that. There is 

 plenty that Bonneville can do to deliver its services more efficiently 

 and Bonneville knows that. 



But I think it's important to emphasize just how competitive 

 Bonneville is as a wholesale supplier and I don't think any of the 

 changes that Mr. Carr described, which I'm quite familiar with 

 also, are going to eliminate the need for wholesale suppliers of elec- 

 tricity. 



And if there is an analog to digital for electricity, it hasn't 

 popped up on my radar screen yet. I think we're a society that's 

 going to continue to need electrical energy services. 



Within that framework, it's comforting, at least, to recognize that 

 the Tenaska plant is a useful proxy for the kind of competition that 

 John was talking about, where someone basically offers to build a 

 stand-alone generator and let someone bj^ass Bonneville and hook 

 up to it. 



By our calculation, and I think Randy showed you the numbers 

 earher today, Tenaska is still at least 50 percent higher in life cycle 

 costs than the current increased costs of Bonneville wholesale 

 power after Randy has absorbed the increases that he has just 

 dealt with. 



And, remember, that is before you make any accounting at all for 

 the kind of fossil energy taxes that, as you correctly point out, may 

 very well be out there on the horizon, Bonneville is selling a very 

 different kind of product, one in a world increasingly concerned 

 about greenhouse gases, that is the very best kind of product to be 

 selling. 



So my own view is John is right to be putting constant pressure 

 on Bonneville to deliver its services better and more efficiently. But 

 the notion that, for example, we're brushing up against, a price 

 level per kilowatt hour that might send Bonneville customers 

 scrambling toward another supplier, I understand why they're say- 

 ing it. 



It is in their competitive interest to do it and it is in their com- 

 petitive interest to be very convincing, Mr. Chairman, to you and 

 to Bonneville that they're about to (kop off. But I step back and 

 look at the objective indices, as indicated, for example, by the 

 Tenaska contract, and I reach a sKghtly different conclusion. 



I also woTild note that it would be our hope in the renewables 

 and conservation area. I think Ken said something that I abso- 

 lutely agree with, which is you've got to look at where your areas 

 of comparative advantages are in tiie modem competitive world in 

 terms of which resources you acquire. 



I can see large comparative advantage, rather, for Bonneville in 

 aggregating the regional efficiency acquisitions £ind regional renew- 

 able acquisitions because of the breadth of Bonneville spread 

 through the region and the continuing existence of a hydro-power 

 system, which, while less flexible, and John is right about that, as 

 a result of the fisheries problems, is still a system that allows for 

 integration in renewables. 



I think there are real competitive opportimities and comparative 

 advantages there for Bonneville. I must say I see them much less 

 clearly in the area of fossil fuel generation acquisitions. 



