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ates, as an example, higher rates on those things that would create 

 a barrier for us to acquire additional resources, use a transmission 

 which we do not own to bring to it to our system, therefore we may 

 be efficient but we as a utility do not have an efficient way to go 

 out and acquire resources and bring them to our system. 



Along with them becoming efficient, the utilities, if they have the 

 methodology of keeping Bonneville competitive by having alter- 

 natives potentially available, then that creates the market force. 

 And our concern is that through the power sales contract and 

 through rate structure, an unbundled rate system, they could arti- 

 ficially manipulate those things to prohibit us or create additional 

 barriers. 



So what we are sajdng is, yes, we are very interested in Bonne- 

 ville being efficient, but we have to be able to have reasonable 

 ways to create the market forces on Bonneville to force that to ac- 

 tually occur. 



Mr. Kreidler. What percentage does your agency's group rep- 

 resent right now of BPA's power? 



Mr. Sherrill. The 14 utilities that make up our coalition pur- 

 chased 25 percent of Bonneville's power sold to the public utilities. 

 Most of that goes to a couple of large utilities, but generally speak- 

 ing, we have, like I indicated earlier, very little generation as far 

 as the total is concerned. So right now we have a number of small 

 utilities that are 100 percent Bonneville requirement to the cus- 

 tomer. 



Mr. Johnson. I would like to add to that, I think the idea of 

 unbundling is probably a good idea, if what it means is you appro- 

 priately price the variety of services and an increasing variety of 

 services that Bonneville is going to be providing in the future, 

 transmission and load mixing and all of those kind of things. 



And I think the bundled services has, including for the require- 

 ments customers, my members, 12 of them are 100-percent-require- 

 ments customers of Bonneville, have often been disadvantaged by 

 the bundled service where they were small and could not take ad- 

 vantage of the transmission system, for instance, but I think the 

 key here is that a competitive Bonneville and an efficient Bonne- 

 ville has got to appropriately price those services. Then unbundling 

 I think could be a good thing. 



I am probably not as concerned as Jim is that somehow there 

 will be unjustified subsidies in one or the other of those unbundled 

 services. I think you could put more focus on them and more accu- 

 rately price what Bonneville does provide to its customers. 



Mr. Drummond. I don't have anything to add after this point. I 

 might after Ralph speaks. 



Mr. Cavanagh. That is fair, because he will. But it ought to 

 work both sides. These guys are going to have many more competi- 

 tive opportunities, as the transmission system opens up. 



My argument is, if Bonneville chooses to go to PG&E for its serv- 

 ice, they ought to be able to resell the power it is using free of any 

 nonmarket restrictions. And regional preference which for years 

 acted to protect region is now acting like just that kind of restric- 

 tion. 



So what I say to my friends from the Public Power Council as 

 they are invoking the virtues of the new market is, will you take 



