260 



Mr. DeFazio. Yes. I'm just curious. It's hard when people start 

 moving the levehzed cost years around. 



Mr. Eldridge. I agree. 



Mr. DeFazio. And talking about the cost of capital, you're saying 

 that you think the drive toward tiered rates is really just sort of 

 a symptom of the problems with the acquisition process. 



Do you think we can meet our objectives without the tiered 

 rates? What point were you making? 



Mr. Eldridge. The point I was trying to make is I think much 

 of the support for the tiered rates concept is that people have given 

 up on Bonneville improving their acquisition of resources, whether 

 it be generation or conservation. 



I'm not ready to do that. I would rather fix the present process 

 and then as we move ahead, if tiered rates becomes a tool to 

 achieve that, fine. But it seems to me we've chosen tiered rates as 

 the solution and now are trying to justify it or make sure that it 

 works. 



I'm involved in two committees on this competitiveness within 

 Bonneville and I have to say I'm more hopeful now that we can fix 

 these very real problems that we've had £ind continue to have with 

 Bonneville. There's such a deep commitment with the present Ad- 

 ministrator and his top staff that there's a real opportunity. 



I think we need to begin to look forward at what we are going 

 to achieve. You know, the past has been not too good and 

 Boardman is gone and I'm not going to lay awake nights about it. 

 It's time to go on to the next resource and I'm optimistic now that 

 we're making real progress. 



Mr. DeFazio. I would ask everybody to think about that and re- 

 flect on that because I want to ask that of everybody. Reflect upon 

 the problems and what we've heard about or what you've seen in 

 terms of changes happening. 



I just have one more question for you in particular. I just came 

 across something I should have asked the Council representatives 

 about, but one of your statements triggered it when you talked 

 about fuel switching and energy efficiency. 



I found a statement in the Council's testimony here where they 

 talk about "The Council, however, never has used thermod5niamic 

 efficiency as a planning criterion. Our plans are based on economic 

 efficiency, which is a much broader concept that focuses on total 

 costs rather than energy efficiency." 



What would you say to that given your statement about fuel 

 switching? 



Mr. Eldridge. Well, I think that it's not traditional cost-effective 

 calculations. It seems to me that the fuel switching we've seen in 

 our own utility is £ui example of what happens when cost alone is 

 the reason to change, and there's no increase in efficiency. Then it 

 just jumps fi*om one fiiel market into the other. 



On a residential level, they just don't have the resources to do 

 that. Then you have the other problems, like going fi-om electric 

 heat to wood heat. You have air quality problems. You have other 

 kinds of circumstances. 



I don't understand how changing, if it is 1,000 megawatts of elec- 

 tric heat to gas heat, the emissions are any different than building 



