300 



Introduction 



Thank you Congressman DeFazio for inviting me to testify before your Natural Resources 

 Committee Task Force. I appreciate the opportunity to express the views of my company on 

 several issues regarding the Bonneville Power Administration (BPA). 



I am Gerald Alderson, President and Chief Executive Officer of KENETECH Corporation, a 

 diversified supplier of products and services to the electrical generation industry. KENETECH 

 is involved in wind energy, gas-fired cogeneration, biomass, energy efficiency and the 

 construction and operation of electric generation plants. I am also a Vice Chairman of The 

 Business Council for A Sustainable Energy Future. Today I will focus my remarks from the 

 viewpoint of U.S. Windpower, the KENETECH subsidiary which manufactures wind turbines 

 and constructs and operates electrical generation plants utilizing wind energy. USW was 

 founded in 1974 and installed its first wind energy electric generating facility in 1981. Since 

 that time, USW has grown to be the largest manufacturer and developer of wind energy projects 

 and has installed over 4,200 wind turbines equaling 420 MW of installed capacity. USW's 

 installed base represents over $500 million of private capital investment including investors from 

 the Northwest such as subsidiaries of PacifiCorp and Northwest Natural Gas. Annually, USW 

 produces over 800 million kilowatt hours or enough energy to meet the annual needs of 130,000 

 homes. 



To further reduce the cost of windpower, USW has recently developed a new wind technology 

 in a consortium with the Electric Power Research Institute and two investor-owned utilities, 

 Pacific Gas & Electric and Niagara Mohawk. This advanced turbine, the 33M-VS, is cost 

 competitive against many other forms of electrical generation and produces electricity at 5C/kWh 

 on average. It can produce power for as low as 3.5C/kWh with the right wind resource and 

 utility financing. 



Pacific Northwest Wind Projects 



It is the advent of this cost effective new technology that has paved the way for the 

 announcement of two commercial-scale wind energy projects in the Northwest. In fact, one of 

 USW's projects was selected out of 2500 megawatt of proposals from all types of fossil fired 

 and renewable resource bids in Puget Sound Power and Light all resource competitive 

 solicitation. On August 12, 1992, Puget Power, PacifiCorp, Portland General Electric and Idaho 

 Power announced their intention to co-own a 50 megawatt wind energy facility with USW as the 

 manufacturer and developer. Negotiations are ongoing for a facility to be installed by January 

 1, 1996 in eastern Washington. 



The other current project USW is developing in the Northwest is in conjunction with BPA. 

 PacifiCorp, USW, EWEB and Idaho Power submitted a bid to BPA in their "wind-only 

 solicitation" to develop a 50 to 75 MW wind project, contingent on BPA taking a portion of the 

 power. In February of 1993, USW and its co-bidders were informed that BPA intended to 

 negotiate a 25 MW power contract. The project is slated to be 50-75 MW facility with 



