380 



ordinated development would occur in the highest probability load 

 growth — that is, from medium low to medium high. 



So that we think that 11 years after the Regional Act assumed 

 that there were benefits to coordinated regional development, that 

 that assumption is still valid and still vindicated and that it would 

 be a tragedy if the region walked away from those benefits. 



The final thing that I wanted to chat about is this whole question 

 of the efficiency of conservation programs. This is one on which I 

 think any fair-minded person has to be at least two, if not half-a- 

 dozen minds. We share a number of the frustrations that have 

 been expressed here today. 



We've been trying to put together a third-party conservation fi- 

 nancing agreement with Bonneville since the day I arrived at City 

 Light about a year ago. At the beginning of this year, there had 

 been hopes that we would get that concluded and have bonds out 

 on the street today. 



In real Ufe, it was only last week that we first received a draft 

 financing agreement, contractual language from Bonneville. I wish 

 that were moving faster. It took far, far too long for us to negotiate 

 a multi-family targeted acquisition program agreement with Bon- 

 neville. 



The uncertainty of future Bonneville fiinding continues to be a 

 problem in planning our future resource developments and it con- 

 tinues to be a problem for our customers who cannot be certain 

 whether or not we will be able to fund their projects. 



But I've got to say that I think you have heard more than 

 enough of that today £uid I do want to emphasize that, in our view, 

 there is no case that this system is a total flop. I think we need 

 to get down to some real basic facts and numbers here about what 

 this resource acquisition system has produced in the way of con- 

 servation savings and at what cost. 



Bonneville's conservation costs since 1981 in real leveUzed 1993 

 dollar mills per kilowatt hour by sector are as follows; agricultural 

 conservation, 13 mills, that's 1.3 cents; commercial conservation, 20 

 mills; industrial conservation, seven mills; residential conservation, 

 36 mills, but I think it is worth noting that in every year since 

 1989, 1990, 1991 and 1992, Bonneville's residential conservation 

 costs have been less than 25 mills and I think compared to the pre- 

 vious program performance, that's a substantial indication of the 

 progress that has been made in making these programs more effi- 

 cient and more cost-effective. 



The overall total price of all of the conservation that Bonneville 

 has developed since 1981 is 28 mills, and, again, indicating the in- 

 creasing efficiency of that program. In every year since 1989, the 

 total cost of Bonneville's conservation acquisitions has been imder 

 20 mills. Think back, I ask you, to the costs that Sue Hickey gave 

 you early in this hearing, about the costs of competitive generation 

 and resources, and reconsider the question of whether we have a 

 fatally damaged program here. 



I would conclude that, of course, there are opportunities to im- 

 prove the efficiencies of these programs. These programs would be 

 more efficient today had we not underfunded capability-building ac- 

 tivities in the 1980s, had we sufficiently experimented to learn 

 what worked and what did not work. Instead, we're having to learn 



