97 



Mr. Hardy. Absolutely. You will see a column in the fifth chart 

 that was passed out. Post 2000, there are basically two directions 

 you can go. One is without drawdown, where the costs increase 

 from $200 million a year to about $280 million. 



I think Senator Craig referenced it. The other option is with 

 drawdown, where the cost increment is a one-half a billion dollars 

 or more 



Senator Hatfield. Additional. 



Mr. Hardy [continuing]. Additional, over the $350 million we are 

 paying now. 



Senator Hatfield. Another one-half billion dollars? 



Mr. Hardy. Yes, sir. 



Senator Hatfield. What contract rights do you have now with 

 those various customers as they move out of the Bonneville supply 

 system? 



Mr. Hardy. We have in our existing contracts a 7-year notice pe- 

 riod before being able to leave the system. That requirement, how- 

 ever, has a number of offramps in it, which makes its use some- 

 what problematic. 



First of all, only our utility customers are included. Our indus- 

 trial customers can get off the system with 12 months notice. They 

 represent 3,000 megawatts of our 8,500 megawatt load and can 

 leave on a year's notice. 



For the remaining 5,000 or 5,500 megawatts represented by pub- 

 lic utilities, we have a 7-year notice period. But these customers 

 can get off each year if the system is in deficit. This year we were 

 200 megawatts in deficit, and Clark and Snohomish County PUD's 

 rapidly filled that void. 



As soon as we do the deficit calculation for next year, it is highly 

 likely, given the demands of the 1995 biological opinion that we 

 will have another deficit, and folks will have contract rights on a 

 first-come, first-serve basis, the right to get off Bonneville's system 

 up to the limit of the deficit that we have in that particular year. 



Finally, the contract right has a number of other offramps. For 

 example, if the resource to be moved off the system is a cogenera- 

 tion resource, there is only a ^Vi year notice period. 



The conclusion I come to is that the 7-year limitation has enough 

 holes in it that our ability to use it to, in essence, hold customers 

 more permanently, is problematic. 



Senator Hatfield. Mr. Hardy, some have argued that you could 

 enforce a contract right on those who leave on the basis of the in- 

 vestments made during their time with Bonneville. I think WPPSS 

 is one. What is your view? 



Mr. Hardy. The so-called stranded investment charge presents a 

 number of issues. First off, we need legislation to implement it. If 

 we could negotiate something with a willing customer to charge an- 

 other five or seven mills, we have the authority to do that, but I 

 think you can assess the likelihood of success of getting to such an 

 agreement. 



To impose such a charge on a unilateral basis would require leg- 

 islation. The difficulty that I see is how would one collect such a 

 charge, or given the authority to impose it, could one collect it? 



Clark County PUD is a good example. Senator. Here is a utility 

 that has already taken 200 megawatts off of our system and wants 



