in the transmission system (which could obviate the need for some generation). The Southwest would be able to offset some oilfired generation and, perhaps, delay the construction of new generation. The potential environmental costs could outweigh the benefits. There are, first, the site-specific costs of new transmission additions. These could present problems in both the Northwest and California. Additionally, should the surplus sales be supported by new thermal generation (rather than conservation) the Northwest would have to suffer the consequences of those perhaps to the benefit of the California facilities environment. The environmental costs, however, may be far outweighed by the unnecessary burdens placed on the ratepayers if a surplus firm sales policy is developed that is not cost-effective. QUESTION 4: Do the constituent organizations of the Coalition oppose construction of new transmission lines, if necessary for additional economic power transfers among these regions? in I am unaware of any NCAC member organizations which oppose, principle, new transmission lines if they are necessary to support cost-effective power transfers. However, that does not mean that the member groups can agree that there is, in fact, a benign transmission route available for this purpose. Neither does it mean that, when the economic and environmental costs of a specific transmission route are factored into the costs and benefits of surplus firm sales, those sales will be found to be cost-effective. I cannot at this time respond to specific corridor options. The Coalition and its member organizations have not had sufficient time to analyze the options presented. STATEMENT BY HONORABLE ARCHER F. PUGH VICE-MAYOR, CITY OF REDDING, CALIFORNIA PRESIDENT, M-S-R PUBLIC POWER AGENCY CHAIRMAN, NORTHERN CALIFORNIA POWER AGENCY BEFORE THE U. S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON MINING, FOREST MANAGEMENT, AND BONNEVILLE POWER ADMINISTRATION EUGENE, OREGON JULY 11, 1983 STATEMENT BY THE HONORABLE ARCHER F. PUGH BEFORE THE SUBCOMMITTEE ON MINING, FOREST MANAGEMENT, AND EUGENE, OREGON Introduction Mr. Chairman and Members of the Subcommittee. My name is Archer F. Pugh. I am Vice Mayor of the City of Redding which operates a California municipal utility, President of the M-S-R Public Power Agency. (M-S-R), and Chairman of the Northern California Power Agency (NCPA). The Members of M-S-R and NCPA include the Modesto Irrigation District, the Cities of Santa Clara and Redding, nine other cities in Northern California, and one rural electric cooperative. Our combined peak power requirements now total approximately 1,200 MW and we serve about 200,000 customers throughout Northern California. limited portion of our power supply comes from the Federal Central Valley Project, marketed by the Western Area Power Administration (Western). The overall power supply from Western has included power from the Pacific Northwest for the last 15 years. The balance of our power comes from purchases from Pacific Gas and Electric Company and power projects that we are developing. A Background In both the Pacific Northwest and in Northern California, federal power has played an important role in the development of regional resources and economies. In the Pacific Northwest, the role of Bonneville Power Administration (BPA) has been an important factor in the development of the region and its economy. In Northern California the Central Valley Project has provided us with flood protection, water for irrigation, and economic federal power. This federal power has also been of major importance in allowing us to provide economic energy to our customers. Unfortunately, federal power is a finite resource and each year provides a smaller share of the total requirements. We in Northern California have, for several years, been actively developing conservation programs and power resources to meet our customers' requirements. The City of Redding, for example, is active in small hydroelectric development and is participating in a project to obtain coal-fired generation from the southwest. addition, the Members are developing other resources on their own and through M-S-R and NCPA. Federal power is crucial to us since it provides the base of our power supply. In In the Pacific Northwest and the Pacific Southwest, federal transmission has been the path that allows access to federal power and facilitates economic exchange arrangements between the regions. Federal transmission is the vital link for these transactions. To solve the immediate surplus power situation in the Northwest, BPA and Western must fully utilize federal transmission to assure the marketing of all available federal power for the mutual benefit for both the Pacific Northwest and the Pacific Southwest. In addition, BPA and Western must offer "their good offices" in developing arrangements for distribution of federal power beyond the reaches of the federal transmission system to assure the most widespread use of that power. The entities that I represent are ready, willing, and able to provide a reasonable share of financing for federal transmission system improvements or constructing additional transmission on a cooperative basis with other utilities. My comments, that follow address certain of the questions included in your letter of June 13, 1983. Questions and Responses Q. What are the economic and environmental benefits and costs of A. expanded transmission capacity between the Northwest and Expanded transmission capacity would provide a wide variety These include: Diversity exchanges In California most loads peak during the summer, in July and August, while the Northwest has a winter peak. Because of this diversity in peak loads, utilities can share generation and realize mutual economic benefits. Surplus energy sales The expansion of markets to utilize energy that would otherwise be sold at spill 25-181 0-83--27 |