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Mr. DeFazio. Thank you. Mr. Olsen. 



STATEMENT OF BOB OLSEN 



Mr. Olsen. Chairman DeFazio, my name is Bob Olsen. I'm an 

 elected commissioner from Mason County Public Utilities District 

 3 in the State of Washington. We serve more than 40,000 people 

 and we are totally dependent on Bonneville for our power supply. 



I appreciate your invitation to share some thoughts with you re- 

 garding BPA's resource development and acquisition activities. You 

 have asked whether BPA is acquiring all cost-effective conservation 

 and renewables. Regrettably, in my opinion, the answer is no. Had 

 they done so, we would not be facing a rate hike of 16 percent. 



You are all familiar with the stated reasons for the rate increase. 

 Our energy siuplus is gone, the failure of nuclear facilities, poor 

 water conditions, the sagging price of aluminum, and fish costs. 

 However, the Administrator has failed to mention another very im- 

 portant reason for the sizeable rate hike; namely, BPA's failure to 

 aggressively acquire conservation in recent years. 



As a result, this past winter, BPA had to spend milUons of dol- 

 lars to buy power from outside the region in the range of 30-60 

 mills to sell to the aluminum smelters at 18 mills. No wonder Bon- 

 neville has a revenue problem. 



Both BPA and the Power Planning Council have wisely con- 

 cluded that conservation is the region's resource of first choice. 

 This approach requires aggressive programs to make our homes, 

 businesses and industries more energy efficient. 



Several years have passed since our planning body set forth its 

 conservation goals for the next decade. Despite that passage of 

 time, adequate programs are not currently in place and do not 

 seem to be on the immediate horizon. This is a matter of great con- 

 cern. 



BPA has many programs, but they do not always translate into 

 action. This, of course, is a waste of money and effort. BPA must 

 find ways to market conservation more effectively. Present methods 

 are slow, they're unproductive, and they^re costly. BPA's central- 

 ized programs are not conducive to flexibility, and you've heard 

 that a number of times already this morning, and they cannot ad- 

 dress the region's diversity. 



We have recommended that Bonneville look closely at using en- 

 ergy service companies. They offer programs that provide the fi- 

 nancing, the marketing and take the risks. This seems to be a log- 

 ical approach, especially with BPA's present fiscal restraints, bor- 

 rowing caps and conservation budget cuts. 



Mason #3 has always been a strong advocate of utihzing energy 

 efficient measures. We are excited about the prospect of doing 

 things and we're not alone in this. Countless utilities want to de- 

 liver cost-effective conservation, but are unable to do so because of 

 BPA's budget constraints. 



BPA recently took a number of actions to hold its rate increase 

 down. Among the reductions was a 12 percent decrease in their 

 conservation investment. I'm not sure about my mathematics, but 

 this would reduce BPA's rate increase by only a small portion of 

 1 mill. I think the region should have learned over the past decade 



