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Mr. DeFazio. Thank you. Questions, let's start with Ms. Van 

 Dyke. You just alluded to your conservation power plant effect if 

 you couldn't reach agreement with BPA on that. What were the 

 major barriers, if you can define them? 



Ms. Van Dyke. We've had a lot of barriers and we've gotten 

 through many of them, but we're unable to reach an agreement. I 

 guess some that stick in my mind are that we haven't had a prob- 

 lem with how to verify the measures and we were basically asking 

 to do what the current residential weatherization program is; same 

 measures, do the same thing, same savings would result. 



Bonneville wanted to go through a new verification process, for 

 example, and reverify all those measures. We just said we're asking 

 to do the very same thing, why should we have to separately verify 

 these different measures when we're asking to do what you've al- 

 ready agreed are verifiable measures. 



Mr. DeFazio. Is that because of the Oak Ridge report? Did they 

 say this is because we are now questioning whether these meas- 

 ures are delivering what we projected they are delivering? 



Ms. Van Dyke. We ended our negotiations. We were negotiating 

 fairly strongly last fall. So we didn't have any negotiations, I think, 

 before that report came out, although they may have had access to 

 that. 



Mr. DeFazio. It seems to you at least that this was just another 

 bureaucratic step, saying, here, one segment of what we're propos- 

 ing to you is to expand efforts that you've already approved and 

 you already measure them this way, and thej^re saying no, we 

 want to reapprove them and measure them. 



Ms. Van Dyke. Exactly. Some measures that have been approved 

 for the residential weatherization program, I believe, weren't going 

 to be sdlowed as part of our program. I know we had an issue, the 

 famous lost revenue problem, which we never did resolve as we 

 came down to it. 



I think we finally broke off negotiations over the master financ- 

 ing agreement; basically we threw our hands up and said that's not 

 appropriate for Bonneville. We're a large utility. We go out and fi- 

 nance other projects. We finance our own capital bonds. We don't 

 need Bonneville telling us how to do a financing agreement. 



Mr. DeFazio. I foimd that particularly odd — why they would get 

 into the details of your financing agreement. 



Ms. Van Dyke. And although other people have said, well, we're 

 going to have an agreement with Bonneville without that, Bonne- 

 ville basic^ly told us if we didn't sign this master agreement, we 

 could go no fiirther. Frankly, also, that agreement was proposed to 

 us after we had started negotiations. 



So it wasn't like, agree to this and then we'll go on and negotiate. 

 We had been negotiating for 6 or 7 or more months and then the 

 master finguicing agreement came up. It was like the people who 

 we were negotiating with hadn't talked to the people in the legal 

 department and the financial affairs office about this agreement 

 coming. 



So it was partly, I think, a surprise. Also, just the detail was sur- 

 prising, and we didn't think it was appropriate for them to have 

 that level of supervision over our decisions. 



