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Question: Please identify the American manufacturers of EHV equipment. In your opinion, are there sufficient American EHV manufacturers to offer competitive bidding in EHV equipment procurement? Answer the questions separately for each definition of EHV equipment.
Answer: The following list identifies domestic manufacturers of EHV equipment as defined by the statement of the floor of the Senate during consideration of the Conference Report on H.R. 2050:
1. Power Transformers - GE, Westinghouse, Mc-Graw. *
The following list identifies domestic manufacturers of the additional items included in the definition of EHV equipment contained in the Conference Report on H.R. 2959:
Switchgear - S&C, S/A, Southern States.*
Adequate Competition: * - Yes, ** - No
Question: Do you think that this type of "Buy American" provision could have a harmful impact on our relations with those trading partners with whom we enjoy a very favorable balance of trade? Do you believe that an appropriations measure is the appropriate vehicle to deal with a complex trade issue that could have significant trade policy consequences?
Answer: The threat of foreign retaliation is one of the primary reasons for the Administration's opposition to "Buy American" provisions. The Administration believes the inclusion of such language in appropriation acts is inappropriate because the trade committees are deprived of an opportunity to weigh such language in the context of overall u.s. trade policy.
The Regional Power Act specified that the "preference" rates were limited to the "general needs" of public utilities and specifically excluded "new large single loads" from that definition. In other words, if a public utility vere to obtain a large new industrial customer, rather than serve that customer out of the so-called 7(b) pool of pover, which is the lowest cost available, the new industrial customer vould pay the "new resource," or 7(f) rate.
I am concerned about reports that efforts are being made which violate the spirit, if not the letter, of this provision. New large single loads are defined as those which add at least 10 megawatts in a 12-month period. By a gradual shift of, say, 9.9 megawatts per year for 5 years, a very large load can be placed on a public utility at the 7(b) rate providing an incentive which is clearly at odds with the intent of the Regional Act.
As Administrator, you have made great efforts to bring about the regional cooperation which was a major goal of the Regional Act. Such cooperation is obviously hindered if one group of utilities is able to subvert the provisions of the Act to entice customers of another group to switch utilities. Bonneville must exercise some oversight responsibility in this area. It may be that some clarification of the Act is required as well.
Question: Could you explain how BPA handles the new large single load question when the customer being acquired is clearly larger than the 10 megawatt threshold, but is brought over on a gradual basis to escape the Act's definition?
Answer: The New Large Single Load provisions of the Pacific Northwest Power Act were implemented in 1981 through BPA's utility power sales contracts. These contracts require a load to be considered a New Large Single Load if its energy consumption increases by 10 average megawatts or more in any consecutive 12-month period, as compared against the preceding 12-month period. New Large Single Loads are billed at the New Resource Firm Power Rate.
Loads which do not reach the 10 average MW annual threshold are, conversely, not considered New Large Single Loads. They may be served with priority firm power if they can be brought on line
"phased-in" in annual increments of up to 9.9 average MW per year, -- regardless of their ultimate size.
For example, a new plant which anticipates eventually operating at 25 MW could receive 9.9 average MW of power the first year at the Priority Firm Power Rate. The second year, another 9.9 average MW could be phased-in (19.8 average MW total); the third year, the remaining 5.2 average MW (25 average MW total). In this manner, the plant never becomes a New Large Single Load as long as the annual increase in its power requirements stays under the 10 average Mw limit.
During the power sales contract negotiations in 1981, the "phase-in" concept represented BPA's understanding of the New Large Single Load provision of the Pacific Northwest Power Act (section 3(13)(B)). The concept was negotiated and incorporated into the contracts. BPA has consistently applied it in good faith without discrimination since 1981.