customers lie both in the application of research results and in the opportunity afforded to influence research decisions.

There are some specific benefits of our EPRI participation. EPRI is developing a new material, amorphous metal, which has the potential of reducing distribution transformer losses by 50 percent, a tremendous benefit to utilities. A recently developed quality control process will significantly reduce the failure rate of buried cables. A cathodic protection guide book developed by EPRI is now available. A wood pole inspection and treatment process will extend pole life 10-years, a significant savings to distribution systems. A remote entry computer system for preparing load forecasts and planning distribution systems is available and expected to save utilities considerable time and money.

EPRI's research and development strategy reflects the dynamic electric utility environment. Thus, in recent years, as a direct response to the changing needs of the industry, EPRI has increased its research emphasis on energy conservation, renewable energy systems, biological and health effects, and the human environment. The results of this shift in emphasis have already benefitted BPA and its customers in dealing with the specific energy problems of the Pacific Northwest.

Question: Please describe how financial participation in EPRI "complements BPA's in-house research and development program."

Financial participation in EPRI provides a natural complement to BPA's in-house research and development program for several reasons. Perhaps most significant is that through EPRI's pooling of research and development funds and expertise. BPA, as an EPRI member, influences the selection and execution of many research projects of a magnitude too large to be done in-house. Active involvement in the EPRI advisory structure provides, among other benefits, a forum for national research and development coordination which assists in the formulation of BPA's in-house research and development program and minimizes the probability of duplication of efforts. Also, the experience gained by BPA's EPKI advisors, continues to contribute significantly to the effectiveness of the in-house research and development effort.

Question: How was BPA's proposed FY 1985 contribution of $6.7 million determined?

Answer: In recognition of the continuing financial problems facing the region, BPA has committed to hold the 1985 contribution to no more than the FY 1984 level of $6.7 million.

Question: Please describe any contractual obligations that exist in this budget component.

Answer: BPA has an agreement with EPRI for its FY 1984 contribution and plans to execute the FY 1985 EPRI Agreement in the fall of 1984. There are no other contractual obligations in this budget component.

Question: The Administration has proposed legislation to shift the funding responsibility for the Mitchell Act anadromous fish hatcheries from the National Marine Fisheries Service to the Bonneville Power Administration (HR 5052). The present level of funding (FY 1984) for the 24 hatcheries and rearing ponds is $8.2 million. If Bonneville Power Administration (BPA) is responsible for funding these facilities in FY 1985, would you anticipate maintaining current production levels at all facilities? Would you expect this to continue for the forseeable future?

Answer: The Administration's bill to transfer funding
responsibilities for the Mitchell Act hatcheries specifies that BPA
shall give due weight to the recommendations and expertise of the
Secretary of Commerce in determining necessary hatchery production
levels. It is my understanding that the National Marine Fisheries
Service which has been operating the hatchery system since its
inception, would still be the fisheries management entity that
would develop recommendations for annual hatchery funding and
therefore production levels. BPA would utilize such

recommendations as the basis for determining the amount of funds to
be budgeted for transfer annually to NMFS for hatchery management.
I would not anticipate BPA initiating any significant changes in
the operation of the hatcheries by NMFS, provided the information
supplied to BPA is sound and prudent.

Question: If H.R. 5052 is adopted by the Congress, does BPA intend to increase it fisheries staff or to rely on the expertise of State agencies and National Marine Fisheries Service?

Answer: BPA, as a power marketing entity with new fish and wildlife responsibilities, does not intend to supplant the management authorities or capabilities of State fishery agencies or National Marine Fisheries Service. BPA recognizes that if H.R. 5052 is adopted a small increase in staff effort may be necessary, particularly at the outset, to effect a smooth and efficient tranfer of the funding responsibility. Reliance on the fisheries staff expertise of State and federal fishery agencies is BPA's intent.

Question: Would BPA credit the expenditures associated with H.R. 5052 against the fisheries enhancement and mitigation responsibilities mandated by the Pacific Northwest Power Act? If so, why?

Answer: Yes. H.R. 5052 directs that BPA's expenditures be credited against our mitigation and enhancement responsibilities under the Pacific Northwest Power Act, and we believe this is sound policy. The Act directs BPA to protect, mitigate, and enhance the fish and wildlife resources of the Columbia River Basin to the extent affected by hydroelectric projects. Historically, the Corps of Engineers and the Bureau of Reclamation have provided mitigation

costing more than $500 million and BPA is repaying that investment as well as reimbursing the Treasury for Corps and Bureau operation and maintenance at fish and wildlife facilities to help discharge this obligation. Additionally, BPA is now directly making major expenditures to carry out this responsibility. The burden of these costs properly rests with the region's ratepayers, who enjoy the benefits of the power the hydroelectric system produces. It would be inequitable, however, for the region's ratepayers to bear both this financial burden and the cost of additional mitigation for depleted fish runs not caused by hydropower. In fact, Congress expressed this view in the Pacific Northwest Power Planning and Conservation Act by stating as a principle in Section 4(h) that "Consumers of electric power shall bear the cost of measures to deal with adverse impacts caused by the development and operation of electric power facilities and programs only."

Question: What impact would the passage of H.R. 5052 have on BPA's ratepayers, assuming the Mitchell Act hatcheries were funded after all other fisheries responsibilities under the Power Act had been met? Please specify the annual aggregate assessment for residential, commercial, and direct service industry customers, as well as the average individual assessment in each category.

Answer: The proposed Mitchell Act funding is expected to account for about one-tenth of one mill per kilowatt hour of the Priority Firm Power rate. Priority Firm Power is sold to public bodies, cooperatives and Federal agencies for resale and direct consumption, and is exchanged with utilities participating in residential purchase and sale agreements under Section 5(c) of the Power Act. BPA has not analyzed the effects of these costs upon individual consumer groups; however, it is clear that the overall impact upon these utilities' consumers would be very limited.

STATEMENT OF ROBERT L. MCPHAIL, ADMINISTRATOR, WESTERN AREA
POWER ADMINISTRATION

Mr. Chairman and Members of the Committee:

I am pleased to present the FY 1985 budget request for the Western Area Power Administration (Western). Western is now in its seventh year as a supplier of Federal electric power to a large part of our Nation. As Western's Administrator, I am proud of our past accomplishments, and believe that the FY 1985 budget request will allow us to continue to achieve Our objectives and the objectives of the National Energy Policy Plan. I will summarize Western's mission and organization and provide highlights of our FY 1985 budget request including the significant accomplishments of the past fiscal

year.

MISSION, ORGANIZATION, AND STAFFING

Western is a federally operated electric power marketing agency responsible for the wholesale delivery and sale of power to 556 wholesale customers consisting of cooperatives, municipalities, public utility districts, private utilities, Federal and State agencies, irrigation districts, and project use customers. These wholesale power customers, in turn, provide service to millions of retail power customers in the following 15 States: Arizona, California, Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Texas, Utah, and Wyoming. During FY 1985, Western will be responsible for the operation and maintenance of 16,315 miles of transmission line, 234 substations, and various appurtenant power facilities in a 1.3 million-square-mile geographic area. Electric power marketed by Western is generated at 48 hydropower generating plants operated by the Bureau of Reclamation (BuRec), the Corps of Engineers, and the International Boundary and Water Commission in our service area. Additionally,

Western markets the United States 24.3-percent entitlement from the large Navajo coal-fired plant near Page, Arizona. The current installed generating capacity of these plants is 8,455 megawatts (MW). The FY 1985 budget request for Western provides for 1,408 full-time equivalents (FTE) to carry out Western's mission, a decrease of 4 FTE below our FY 1984 level of 1,412 FTE. This reduction is a result of the President's management initiative program.

BUDGET HIGHLIGHTS

For fiscal year 1985, Western is requesting $248.2 million in new budget authority, a decrease of $14.6 million below the total available in FY 1984. These funds are for continuing rehabilitation, upgrade, or replacement of transmission lines and associated facilities and for regular system operation and maintenance expenses. No new budget authority is requested for the emergency fund. This fund is maintained at a $500,000 level, on a continuing basis, and the emergency fund is replenished from affected project power revenues. In addition for FY 1985, we estimate an obligational authority requirement of $93.6 million for the Colorado River Basin Power Marketing Fund, a decrease of $7.9 million below the FY 1984 program. Specific appropriation and fund amounts compared to funds available in FY 1984 are as follows: