269 



programmatic environmental impact statement (EIS) the various possible roles the BPA might pl^ in 

 the Pacific Northwest power supply system. The five volume. 3200 page document has served as a 

 reference to many who wish to better understand how the electric power system operates in the 

 Pacific Northwest. Another special assignment was to manage the preparation of the Federal EIS on 

 the Coalstrip coal-fired generating project and its associated transmission lines constructed by 

 Montana Power Company and its four investor-owned utility company partners in Eastern Montana. 

 Since 1988 I have been associated with the cooperatives in Montana in my current position. 



I am pleased to have the opportunity to share my views on how the Regional resource acquisition 

 effort is proceeding. You are to be commended, Mr. Chairman, along with the other members of 

 your Task Force for recognizing that things are not all well in the Pacific Northwest with regard to 

 power supply planning and implementation. Without question, the reasons why things are not well 

 will be in some cases exceptionally complex, but nevertheless, such an effort should lead to better 

 understanding and perhaps some improvement. You are undoubtedly aware there is a high level of 

 frustration among the BPA-served utilities these days. It is difficult to explain to consumers why 

 their electric power rates are beginning to rise at a rate much faster than normal inflation. 



As I was preparing my testimony, it was difficult to consider BPA's resource acquisition performance 

 in isolation from the Northwest Power Planning Council. The Council is a key player because it is 

 driving events in a direction which influences the outcome. Because of this, my testimony will 

 address activities of both BPA and the Council. 



Today I will address; 1) whether the Regional Act is succeeding; 2) reasons for the Act's failure to 

 produce results expected; 3) resource acquisition strengths and weaknesses; 4) acquisition 



processes sharing of costs and benefits, and BPA conservation acquisition; 5) acquisition of the 

 output of the Tenaska Project, 6) environmental externalities; and 7) the experience of Montana 

 cooperatives with the resource acquisition process. My testimony will not address the fish and 

 wildlife program which I understand will be the subject of a subsequent hearing. 



The Regional Act; A Success — NOT! 



If you have reviewed the Council's Aimual Report to Congress over the past few years, you 

 understand the Council assesses its own activities as being outstandingly successful. Certainly some 

 of the recipients of the extravagant funding provided as a result of the Act would probably agree. 

 The utilities I represent, however, see it differently. The BPA system is short of resources — under 

 the Power Plan this was not supposed to happen. Electric power rates charged by BPA are 

 beginning an exponential increase wdiich will almost certainly exceed investor-owned utility rates 

 within a few years. Under the Act the cost of power was supposed to remain economical. 



The Act was intended to allow the Pacific Northwest to continue to benefit from the highly efficient, 

 low cost Federal hydroelectric (renewable) system and to insure a future adequate, economical power 

 supply by developing the lowest cost resources to keep power rates low. Conservation was given 

 emphasis, but only as a tool for achieving the objective. Renewables were also emphasized, but only 

 when they met the cost comparison test. It appears the Council has lost sight of the intended 

 objective and is pushing the Region in a direction of shortages and unwarranted high rates. BPA is 



