327 

 Mr. DeFazio. Thank you. Mr. Johnson. 



STATEMENT OF STEPHEN F. JOHNSON 



Mr. Johnson. Good afternoon, Mr. Chairman. I'm Steve Johnson, 

 Executive Director of the Washington PUD Association. I'm accom- 

 panied today by Steve Romjue, who is the Manager of the Grays 

 Harbor PUD and is Chair of the Board of a conservation and re- 

 newable energy system, or CARES. 



Collectively, the Washington PUDs are the largest customer of 

 the Bonneville Power Administration, We serve 1.5 miUion people 

 in the State of Washington and 22 electric PUDs there, five of 

 which generate the majority of their own power, seven purchase 

 the majority of their power from Bonneville, and 12 are 100-percent 

 requirement customers of the Bonneville Power Administration. 



The focus of our testimony today is on how and why a joint oper- 

 ating agency, CARES, was created to acquire efficiency and renew- 

 ables and on what role similar JOAs and third-party financing 

 mechanisms can play in assisting utilities and Bonneville in more 

 effectively acquiring new resources. 



I should tell you that I may not be fully responsive to the ques- 

 tions that were sent in the letter inviting the panelists, because I 

 was added late to this panel, but would be happy to address those 

 where you see them relevant to this testimony, which I think you 

 will find interesting. 



The conservation and renewable energy system is a joint operat- 

 ing agency organized under the laws of the State of Washington. 

 It's current members are eight small and medium-sized Washing- 

 ton PUDs; Benton, Clallam, Franklin, Grays Harbor, Klickitat, 

 Okanogan, Pacific and Skamania Counties. Washington's cities, as 

 well as PUDs, are eligible for future membership. 



The agenc/s major objective is the acquisition of energy re- 

 sources which are least-cost, economically and environmentally, for 

 the northwest. CARES' mission is to develop conservation, renew- 

 able and high-efficiency energy projects consistent with the man- 

 dates of the Pacific Northwest Electric Power Planning and Con- 

 servation Act. 



Another CARES goal is to spread economic benefits of energy re- 

 source development across the state by fiinding projects in rural 

 coimties. One of the most significant benefits of CARES is provid- 

 ing Bonneville and the region a third-party financing mechanism. 



CARES will be able to finance projects at a lower cost through 

 use of tax-exempt bonds, helping reduce BPA resource acquisitions 

 costs and Treasury borrowing. In Oregon, by the way, an effort is 

 underway to organize an agency similar to CARES and Bonneville 

 is supporting that effort, as it did to financially support the organi- 

 zation of CARES. 



The need for CARES grew out of the recognition that significant 

 barriers were preventing PUDs from participating in Bonneville 

 conservation and resource acquisition programs and from develop- 

 ing their own energy resources. These barriers to participation 

 stem, in part, from weaknesses in Bonneville conservation pro- 

 grams, but also, in a large measure, from the nature of PUDs and 

 other pubhc utilities. 



