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Mr. DeFazio. Thank you. And our cleanup witness, Ivan Jones. 

 STATEMENT OF IVAN JONES 



Mr„ Jones. Thank you, Mr. Chairman. My name is Ivan Jones. 

 I'm the president of the Clatskanie People's Utility District Board 

 of Directors. We want to thank you for the opportunity to testify. 



Our PUD offices are located in Clatskanie, Oregon. The PUD was 

 organized in 1940. It is the seventh largest revenue producer for 

 Bonneville in the region. The PUD provides electric service to the 

 northwest portions of Columbia County and the northeast portions 

 of Clatsop County and is currently debt free. 



I will address my remarks to two subject areas; first, general 

 comments concerning what we consider critical issues that will 

 confi*ont Bonneville and the region over the next few years, and, 

 second, the Bonneville new resource acquisition policies and proce- 

 dures. 



My general comments have been developed by consultation with 

 our entire board and our staff. Bonneville was established in the 

 1930s for the purpose of marketing power from the dams built and 

 operated by the Corps and the Bureau of Reclamation. 



As time passed, Bonneville was given new authority in legisla- 

 tion such as the Regional Transmission Act passed in the mid- 

 1970s. This legislation made Bonneville a self-funded agency and 

 allowed Bonneville greater flexibility in financing extensions and 

 betterment to the regional transmission system. 



In 1980, the Regional Power Act was enacted by Congress. In 

 many respects, the Regional Act was a compromise among compet- 

 ing interests, including the different types of customers of Bonne- 

 ville, with states and the region and other political entities. 



We beUeve that the passage of the Act has resulted in signifi- 

 cantly higher Bonneville rates and if the cost to Bonneville Power 

 continues to increase at a rapid rate as predicted, certain of the in- 

 dustries served by public utilities in the region may be unable to 

 remain competitive. 



We feel that a rational approach to minimizing the projected 

 Bonneville rate increases requires an examination of the primary 

 factors that caused the increases, and we offer the following 

 thoughts on this subject. The control over escalating rates is hin- 

 dered by a political process set up by the Regional Act of 1980, and 

 let's resolve these political issues and focus on controlling rates. 



We must face the fact that Bonneville cannot fund ^1 fish and 

 wildlife programs that may be envisioned by either the Council or 

 the environmental community out of rates. We are presently nego- 

 tiating a new power sales contract with Bonneville. Some of the 

 critical issues and our preliminary views on these matters include 

 the following. 



Number one is tiered rates. Each publicly owned utihty should 

 be entitled to purchase the amount of Federal Base System re- 

 sources required to meet the loads of the utility. The needs of the 

 utility to exceed its first year allocation above the new large single 

 load definition would be met by one of two alternatives; the utility 

 could build resources to meet the load or the utility could acquire 

 more power fi*om Bonneville. It is our opinion the Regional Act al- 

 ready sets out a tiered rate definition. 



