07/09/1980 Meeting - Laserfiche WebLink

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--- generating plant's designed capacity instead of the actual production. . The 22-page bill has many subtle aspects. Proponents of the bill claim that customers of investor-owned utilities, 80 percent of all Oregonians, would receive supposedly lower-cost melded rates from the Bonneville Power Authority. They also feel that regional conservation and generation are necessary. One of the questions regarding Eugene's mandatory weatheriza- tion plan is why Eugene should do it when other jurisdictions nearby are not. The answer locally has been that they will receive a larger economic benefit from recovery by conservation and EWEB will not have to invest in new generation. Opponents of the bill state that there has been a rate disparity since EWEB customers get low-cost power and PP&L does not. With the bill, there would be less of a rate disparity. Opponents also believe that local planning and conservation as well as local control for new generation will be eliminated. Local programs in the northwest supposedly are already better than what would be mandated by the Federal government. EWEB's primary objection is the loss of local control and the additional requirements necessary to finance new generation. They do not feel that new generation will be easily financed due to Federal controls for compliance. They also think local control is more important than any benefits that would be gained by regional planning. Mayor Keller apologized for limiting this presentation and noted appre- ciation for the work done by Mr. Page. He stated there obviously are two sides to the issue and he is not sure the council has had all of the information before them. . In response to Mr. Lieuallen's question about net billing, Mr. Page responded that net billing is an arrangement by which BPA guarantees to purchase the capacity of a plant. When Trojan was built, SPA entered into an agreement to purchase the capacity of that plant. If it had not operated, SPA would still have paid for it through its rates. With BPA guaranteeing the capacity of the plant, the plant will receive a more favorable reading on the bond market. This is similar to how the Washington Public Power Supply System (WPPSS) plants 1, 2, and 3 were financed in Washington. They were not able to do this because of an IRS ruling on the remaining two plants, numbers 4 and 5. This is important, because of the cost overruns experienced by those plants. 'SPA will assume the financial liability for the cost overruns of those first three plants but not for plants 4 and 5. Some proponents of the bill are trying to include plants 4 and 5. Pebble Springs and other nuclear plants might also be included. Mr. Lieuallen then asked if people who build plants would be insulated from financial risk. Mr. Page responded that that is correct. Mr. Delay asked if it is true that the net billing will no longer be available. One of the bill's features would be to reconstitute a net billing arrangement establishing a mechanism for new construction. They could sell the capacity of the plant to the system according to Mr. Delay's understanding and Mr. Delay asked for clarification. Mr. Page responded that that is true for nuclear plants and other plants. People . 7/9/80--11 - -