283 



Mr. DeFazio. I'll just ask you questions and let you go. I was cu- 

 rious that twice you mentioned that there's too much emphasis and 

 costs placed on externalities, yet we heard from earlier witnesses 

 that they — because of policies developed by the Reagan and Bush 

 Administrations, in fact, BPA was prevented from assessing envi- 

 ronmental externalities at anything that — it came out to about a 

 mill, I think, on Tenaska. I'm cxirious why you chose to mention 

 that twice and yet we had earlier testimony that, in fact, they were 

 prevented from doing that. 



Mr. WiLKERSON. My testimony is based on the fact that cost of 

 conservation, the actual cost is reduced not just by the ten percent 

 in the Act, but also for some other reasons that have been adminis- 

 tratively included, supplementing that, and the cost of generation 

 which conservation is compared against has been artificially in- 

 flated through the use of externalities which are speculative, at 

 best, as far as the actual impacts. 



For instance, for an existing plant that's going to operate any- 

 way, applying an externality in the comparison of whether you're 

 going to acquire it or not seems a little bit ridiculous because the 

 actual cost of acquiring Boardman would have been substantially 

 less than other resources. 



Mr. DeFazio. And I had asked the previous witness about the 

 Boardman example and I'm not sure, and perhaps we'll hear it 

 from the Administrator later. But, again, we were told that it was 

 the policy of the previous Republican Administrations to not coimt 

 environmental externalities, since they didn't believe in global 

 warming, they didn't beheve in other problems. 



So my question is what have they applied. I'm not aware that 

 they have been applying any discriminatory — I understand what 

 you're saying about the conservation side and we'll get into that. 

 But you're talking about something that other people are saying 

 they're not applying and I'm just curious whether they really are 

 applying it or not. 



Mr. WiLKERSON. With other resources, sulftir dioxide, nitrous 

 oxide, they also put in some penalties having to do with location, 

 those kinds of things. But the externalities mostly have to do with 

 the pollutants that go in. I think when— my view is that when the 

 Act was passed and the word "quantifiable environmental impacts" 

 was put in there, it meant those things which you can estimate the 

 cost of controlling, which the Congress and the Federal agencies 

 have determined are, in fact, pollutants and that there is a cost of 

 mitigation, a cost of scrubbers, for instance, those kinds of things, 

 of meeting the laws of the land. 



Mr. DeFazio. Like the Clean Air Act. 



Mr. WiLKERSON. As it is now, many states are going to use of en- 

 vironmental externalities, but there is no consistency among states. 

 Federal agencies or anyone as to how much is going to be assessed 

 for various kinds of environmental impacts. 



Mr. DeFazio. So you would like to see it done on some sort of 

 uniform basis across the country, so as to take out any sort of mar- 

 ket distortion. 



Mr. WiLKERSON. If it is going to be done, it should be. But if Con- 

 gress, which is societys decision-maker, you might say, if they de- 

 cide that there are, in fact, penalties that should be put on certain 



