95 



it all? Will you let Bonneville resell to the highest bidder once you 

 have left? Because that gives us the opportunity for potential re- 

 sales that let Bonneville emerge from this as a stronger entity also. 



If we are going to go down that road, we have to be able to take 

 it all the way for the end and not stop for the advantage of particu- 

 lar participants. 



Mr. Kreidler. It cuts both ways. 



Mr. Drummond. We would never, ever give up the right to re- 

 gional or public preference to the power. If in fact as Ralph sug- 

 gests someone wants to leave the system that power flows back 

 into the system for the benefit of the Northwest ratepayers. 



Mr. Kreidler. I kind of anticipated that response. 



Mr. Cavanagh. Just stay on the system. Bill, and keep benefit- 

 ing. 



Mr. Drummond. As long as there are benefits. 



Mr. Kreidler. Thank you, Mr. Chairman. 



Mr. DeFazio. Okay. 



Mr. Johnson. Mr. Chairman, could I ask one comment? 



The importance of this Competitiveness Project to Bonneville and 

 the corporation idea is to make sure that preference has value. If 

 the price of preference power goes over the price of market power, 

 then preference becomes not very important. We think it is vitally 

 important, but to remain a very valuable thing, Bonneville has got 

 to remain competitive. That is the whole point. 



Mr. DeFazio. We did a hearing where we devoted a substantial 

 portion of time to the issue of unbundling so I don't want to spend 

 a lot of time on it. Just some of Mr. Sherrill's points, this is an in- 

 teresting problem to approach, and the question is, how many 

 things can you unbundle to achieve competitiveness. 



I mean, some people want to unbundle fish and wildlife. Well, 

 okay, who is going to carry that? If you want to apportion certain 

 costs into all categories, and you just go to true costs of each and 

 every service, then you create a problem, and I would say particu- 

 larly for the preference customers on what happens to the base 

 load customers, because, you know, you say, we just want a little 

 transmission here, we don't want fish and wildlife stuff in the 

 transmission. There are certain costs that are going to have to be 

 apportioned across the entire system, even as you move to 

 unbundling. You seem to be nodding your heads in agreem.ent. 



Mr. Ramseyer. Two things I would like to comment on. One, 

 since cooperatives were mentioned for having declining block rates, 

 I would like to address that issue. 



Mr. DeFazio. We mentioned one. 



Mr. Ramseyer. But the issue is not the concept of declining block 

 rates, it is the rate that they have. And all the co-ops that I know 

 that have declining block rates, they are going from 5.7-5 cents or 

 from 5.2-4.5 cents, which is much higher than the normal rate for 

 other utilities that are putting demands on the resource require- 

 ments of the Northwest. So he needs to understand exactly what 

 the price is before he can say that they are putting more demands 

 on Northwest resource requirements than other utilities that have 

 flat block rates. 



The other issue relating to resource development, we all are in- 

 volved in taking the advantages that we can to identify what is 



