367 



Mr. DeFazio. I would hope — back to a point I made earlier — that 

 as you're making these changes or have made these changes in the 

 agency, that we aren't just going to wait for that. And it sounded 

 very good when you talked about sort of the range of rates or serv- 

 ices that are more discriminate that will be available and provide 

 a lot more flexibihty. 



But there's going to be a two or three-year time period before we 

 reach — I guess 1995 might be the objective for that. Would it be for 

 that sort of a 



Mr. Hardy. I think that 1995 will probably be the latest that 

 we'll do it. If we can do some of this sort of stuff earher, we will. 

 We're having the first meeting on tiered rates this week to start 

 the process. 



I'm relatively confident we will conclude the development of a 

 methodology for tiered rates by this time next year. We then have 

 to go through some sort of a 7(i) rate process. The question then 

 is — it's really two questions. One, how does it fit with the overall 

 market segmentation strategy and the timelines associated with 

 that, and, secondly, can we go through some sort of a special 7(i) 

 process and restrict it just to a tiered rate or a series of rate design 

 kinds of changes. 



The problem you typically run into is when you go back to FERC. 

 It will have been a year since we've done a revenue requirement 

 study and FERC — since the basic thing that FERC does is review 

 our rates for revenue sufficiency, the first question we usually get 

 asked is have you updated your revenue requirement study. 



Well, if the requirement fi*om FERC is going to be that we up- 

 date our revenue requirements, we have just stepped into the 1995 

 rate case in 1994, with all of the panoply and TV ads and every- 

 thing else associated with that sort of tWng. 



So we need to ascertain fi*om FERC if we can limit their review 

 to rate design changes. If we can, then we will probably proceed 

 more quickly. If we can't, then we may be stuck with 1995 before 

 we can actually implement these things. My hope in the case of 

 tiered rates would be to have the methodology developed, and stip- 

 ulated in the initial proposal of the 1995 rate case, so that it's a 

 given and there isn't really much argument or, hopefully, con- 

 troversy about it. 



Mr. DeFazio. But, of course, there would still be an interim pe- 

 riod and obviously we're not going to totally discourage these other 

 tools even in the future with the rate structure perhaps providing 

 more or less emphasis. So I guess my concern, in part, is the near 

 term. 



I realize that this report is fi*om the beginning of the year in 

 terms of the assessment and tier credit, BPA did, as for the evalua- 

 tion report itself. 



What I'm hoping is that we're going to see some movement in the 

 near future on some of the problems we've been hearing about. 

 We'll get more contracts signed. The EWEBs of the world mil actu- 

 ally have their negotiations that they've been waiting for. 



This one sort of ray of hope I heard was the Gardner — the de- 

 scription of the industrial project with the Gardner plant. That 

 sounded like ideal. The idea of having something that's in the 

 range of a megawatt, where you've given the discretion down to a 



