405 



shielding our customers from even the effects of inflation. As I said 

 in my testimony, we've been a BPA customer since 1949. We bid 

 on BPA big time in the 1960s when we did not buy into the Mid- 

 Columbia, and we bid on BPA again in the 1970s when we bought 

 into the supply system projects. 



Frankly, we're two for two and we think we just escaped another 

 one. But the reality is that a market — the market forces do work. 

 I've been supplied information from the Washington Natural Gas 

 Company for our service territory and the numbers that they gave 

 us indicated that there were 3,000 conversions in our service terri- 

 tory last year, electric furnaces and hot water tanks, for which we 

 paid nothing. 



At the same time last year, we ran a $12.5 million BPA prescrip- 

 tion program which saved somewhere between 3.5 and 4.5 average 

 megawatts. The conversions also saved between 3.5 and 4.5 aver- 

 age megawatts. 



Now, you don't have to be a rocket scientist to figure out which 

 way you ought to go. We have weatherized 50,000 homes that were 

 electrically heated £uid very successfully with the BPA program 

 and we now suspect the gas company is coming along right behind 

 us and converting those homes where they are on the gas lines, in- 

 creasing the savings and, I think very much to the region's benefit, 

 substantially, but at no cost to us. 



We have needs. We have growth needs. We have needs to mod- 

 ernize our system. We have needs now to pay BPA about $19 mil- 

 lion or more and we just thought it was the time for us to take a 

 pause and reexamine not our commitment to conservation, but the 

 method for us to acquire it and the costs that we ought to be pay- 

 ing as a utility. 



Mr. DeFazio. Ivan, you said something which intrigued me and 

 I just wanted to get at it. You said that essentially you felt that 

 the Act already sets out or mandates a tiered rate. Are you talking 

 about the large new load requirement? 



Mr. Jones. That's correct. 



Mr. DeFazio. But are you sajdng that anj^hing other than the 

 large new load requirement of the Act — I mean, a lot of our growth 

 isn't coming that way. So how would you deal with efficient 

 growth? 



Mr. Jones. Well, we have had experience with that in particxilar. 

 It's a detriment to economic growth. In essence, if a proposed new 

 large load comes into your region and they look at that, you either 

 go get something else or you lose the load. 



Mr. DeFazio. So you're saying that, therefore, you don't support 

 tiered rates because you think that's an example of what we're 

 headed toward. 



Mr. Jones. Yes. 



Mr. DeFazio. I would hope we could develop something. That's 

 one of the keys, to me, in developing a tiered rate, is how do you 

 distinguish between — I mean, you've got growth, economic develop- 

 ment, those sorts of things. They're inevitable and desirable. 



How do you construct a rate that distinguishes between — ^in de- 

 veloping tiered rates or multiple rates, whatever BPA is looking at 

 here, and I'm always asking people to provide me with models. 

 WAPA has done some small- scale stuff with tiered rates and there 



