76 



However, fish is far and away the fastest growing segment of our 

 budget. Fish expenditures have changed from 1991 to 1995 and are 

 projected to increase through 1998. 



It is no accident that the three Snake River stocks were Hsted 

 in November 1991, and that cost escalation that has occurred from 

 1991 to the present has been about $200 milHon a year from 1991 

 to 1994. As many have observed, the cost will go up another rough- 

 ly $160 million over the next 3 to 4 years. 



We are grateful for the administration's help with 4(h)(10)(c) that 

 Dr. Rivlin announced, and that we announced formally yesterday. 



The 4(h)(10)(c) credit will be of significant assistance, but as 

 many of you observed, and as Dr. Rivlin observed, it is not a long- 

 term solution. It needs to be a bridge to something else. It buys us 

 some time, both for the salmon and for our own competitiveness 

 problem. 



Basically, absent some action on your part, Bonneville has three 

 tools to deal with this problem. One tool is 4(h)(10)(c), whatever as- 

 sistance we can get; the second is the cost cutting that I just an- 

 nounced, and further cost cutting, if necessary; and the third is es- 

 sentially debt rescheduling by missing a portion of our planned 

 Treasury payment, or at least in this case, lowering the probability 

 that we will meet the planned Treasury payment each year. 



Those tools and modest contributions from new revenues, which 

 are problematic in today's marketplace, are the tools we have. 

 Those are the tools we will use to manage ourselves to a stable 5- 

 year rate level, but that begs the question of what is the long-term 

 solution, which is the purpose of today's hearing. 



I have two final notes. First, because of good water and because 

 of the 4(h)(10)(c) assistance, we are in relatively good shape for 

 making our fiscal year 1995 planned Treasury payment. 



I think we have a good probability of making the payment, and 

 I am not worried. Fiscal year 1996 is more problematic, but, again, 

 with 4(hX10)(c) assistance, that will be helpful, and if we get a de- 

 cent break on water conditions, I am optimistic we can make that 

 planned Treasury payment as well. 



Finally, Mr. Chairman, I will conclude by saying, as is obvious, 

 we are in a very competitive market. We will do whatever it takes 

 to meet the market, because that is what is necessary for us to re- 

 main viable in the fashion that Senator Murray and others have 

 described, and execute the missions that we have. 



But that may not and probably will not be enough. That is the 

 purpose of today's hearing, and I am optimistic that you and other 

 members of the delegation will help us as we work toward solu- 

 tions for the longer-term issues. 



Thank you, Mr. Chairman. 



[The statement follows:] 



