160 



form for salmon recovery. It will provide a long-term solution and 

 can be achieved without endangering BPA and its customers. 



In addition to the direct economic problems facing BPA and the 

 region, there is a growing interest in shifting some of the economic 

 burden to other revenue-gathering mechanisms, such as trans- 

 mission or exit fees. 



In no way will the DSI's support any schemes to shift unjustified 

 fish costs to transmission access charges or other devices designed 

 to preempt competition. 



In conclusion, we fear there are painful consequences for the 

 Northwest economy if the ESA regulatory agencies continue to look 

 to BPA as the endless deep pocket for fish recovery, this, despite 

 the fact that many factors have contributed to the salmon's decline. 



But the power marketing agency and its customers plainly shall 

 not have to offset other factors, such as overfishing, poor hatchery 

 practices, spawning habitat destruction, and uncontrollable ocean 

 conditions that have collectively depressed Northwest salmon runs 

 even in coastal rivers where there are no Federal hydrosystems to 

 blame. 



Mr. Chairman, we appreciate your leadership that you are pro- 

 viding and the understanding you are bringing to finding a solution 

 to this very emotional issue. 



PREPARED STATEMENT 



We certainly pledge our support to work with you toward a bal- 

 anced and credible solution that serves both the environment and 

 the economy. Thank you, sir. 



Senator Hatfield. Thank you, Mr. Holder. 



[The statement follows:] 



Prepared Statement of Richard G. Holder 



Thank you Senator Hatfield. I am Richard Holder, Chairman and Chief Executive 

 Officer of Reynolds Metals Company. Thank you for the opportunity to discuss salm- 

 on protection — which I support — and the impact on the Bonneville Power Adminis- 

 tration and its customers. Reynolds Metals Company is one of 10 companies that 

 produce aluminum, titanium and other metals and chemicals in the Northwest. We 

 are collectively known as the Direct Service Industries because we have historically 

 been permitted to buy our power directly from the Bonneville Power Administration. 

 As a group, we contribute $2.3 billion to the region's economy and employ 10,500 

 people. 



We have been an economic force in the Northwest for over 50 years and we hope 

 to remain strong regional contributors into the next century as well. At full produc- 

 tion, the 10 Northwest aluminum plants produce over 40 percent of all aluminum 

 made in the United States. Aluminum producers are leaders in the Northwest in 

 balancing both environment and economic interests through recycling and energy 

 conservation program. But our companies are facing tremendous competitive chal- 

 lenges from regulation and rising power costs which jeopardize the viability of the 

 Northwest aluminum industry. 



We provide about 30 percent or $560 million of BPA's power revenues. Our plants 

 are the only customers who buy continuous blocks of power, both day and night, 365 

 days of the year. This unique characteristic of our power load avoids the need for 

 shaping or other expensive aspects of tracking the ups and downs of a more typical 

 customer group. In addition, a quarter of our load may be dropped when BPA lacks 

 sufficient power to serve everyone, allowing BPA to avoid building costly backup 

 generation. Power rates are a significant factor in the cost of producing aluminum. 

 Our continued economic contribution to the region depends on maintaining afford- 

 able, reasonably stable and predictable power rates for our industry — since our sur- 

 vival is ultimately determined by the world-wide price of aluminum. 



