57 



has to look at 5-year contracts if it is going to compete in the en- 

 ergy marketplace. 



This is a 2-year proposal, and we are looking at the biological 

 opinion of National Marine Fisheries Service, and they are suggest- 

 ing a substantial increase annually, $160 million, and up to $280 

 million by the year 2000, and this is not the end of it yet. This is 

 just this particular proposal. 



Based on a case that we think can and has to be made in the 

 preservation of Bonneville, is this administration going to be re- 

 sponsive in assisting us in trying to accommodate a much longer- 

 term approach toward resolution of this problem, and does not just 

 include Bonneville, but includes others in the region, which in- 

 cludes other power producers in the region, who do not have the 

 luxury of being bailed out of their problems by the Federal Govern- 

 ment being driven by a law that has brought us to the table today. 



Ms. RiVLIN. I do not think this is the end of this story, nor is 

 it the complete story. We certainly want to be responsive to the 

 broader cause and longer-run implications. 



Let me just say, however, that while part of this agreement is 

 a 2-year agreement, part of it is also permanent — the direct cost 

 portion. Thus, we believe we have contributed to the solution of the 

 long-run problem of Bonneville. 



Senator Craig. Ms. Rivlin, we have created an environment not 

 just with the Endangered Species Act, but with some deregulatory 

 efforts that we have all been a part of on the Energy Committee 

 over the last several years to create a much more competitive mar- 

 ketplace out there, that Bonneville is going to have to be as respon- 

 sive as any other producer of power as it can. 



Are you willing to look at other alternatives or other approaches 

 that we may come up with to create greater competitiveness in the 

 marketplace, so that Bonneville can be a competitor? 



Ms. Rivlin. Senator, we are willing to look at anything. We very 

 much want to be part of the conversation. 



Senator Craig. Thank you, Mr. Chairman. 



Senator Hatfield. Senator Baucus. 



Senator Baucus. Thank you, Mr. Chairman. 



Senator Hatfield. Do you have questions for Ms. Rivlin? 



Senator Baucus. Yes; thank you very much. Mr. Chairman, I 

 want to thank you, and do thank you very much for holding this 

 hearing. 



Director Rivlin, I thank you for the effort that you have under- 

 taken to try to solve, at least on a short-term basis, the problems 

 of potential rate increases in the Bonneville system. 



You worked hard, you and Mr. Hardy, of Bonneville, and I per- 

 sonally thank you very, very much. I think you have come up with 

 a good solution, that is one that will assure all ratepayers in the 

 Pacific Northwest, at least in the lower 48, I cannot speak to Sen- 

 ators Stevens and Murkowski, that there will be no rate increase 

 over the next 2 years above the earlier increase that was an- 

 nounced by Bonneville several weeks ago, due to reasons other 

 than salmon recovery, and I thank you very much for that. 



I would like to followup a little bit with a point raised by Senator 

 Murray, namely, what is next. I would like you to tell us now some 

 ideas you have as to what we could do to be sure that this contin- 



