CLINTON ST. lights. That’s pretty much on the horizon. The Public Utility Commissioner will not allow PP&L and PGE to go bankrupt, even when the utility's problems result from mismanagement. Ratepayers absorb the costs of such mis management. dousiy in recent years, in large part / d u e to tie cost of constructing and operating these plants, the cost of distributing power has gone up very little. Therefore, when you apply this 5.5 times the annual revenue formula to the cost of the distribution facilities (the facilities a new PUD would buy), you artificially inflate their value to the $4 billion figure. PP&L and FGE’s total combined investment in distribution facilities is less than SI billion based on their book value on file with Federal Enegy Regulation Commission. CSQ: What i f a PUD wants U buy power from you? * Spicer: We don’t know what the law will require. If we just flatsaid we will not sell to a PUD, we do f t know that that’s true, simply because we don’t know what the court' will rule. There is no provision now in the law that says that we, a private, investor- owned company, must seL to a public agency. CSQ: Well, what are you going to do with the power you ’ve been selling to your Oregon customers? Spicer: Our normal growth in demand will take up most anything we’re faced with losing. There’s ample market for the darn stuff. Besides that not only us, but every utility in the Northwest is facing a shortage coming up. No question about it; you get a bad weather situation and we’re all going to be curtailing. Turning off Comment: PP&L and PGE have recently been caught talking out of both sides of their mouths on this subject. They say they have no power to sell a new PUD, and if they did, they’d sell it at their marginal cost (the cost of power from their most expensive facility.) However, in the hearings on the Domestic and Rural Power Authority (DRPA) bill, they testified they would sell DRPA longterm, firm power at average system cost. So they’ve admitted that there will be power available. Based on recent court decisions, the Federal Energy Commission will probably require them to sell that power at average system cost. The courts will not allow them to operate in a discriminatory or anti-competitive manner. It’s indicative o f their attitude. however, that they apparently would rather see their former customers freeze In the dark . CSQ: I spoke recently with a man who used to work fo r Pacific Power and Light, and one o f the things he told me was, " I f you sat in on a cocktail conversation with PP&L execulives, you ’d know they laugh at solar power. They claim they spent $5 million or so on alternative energy but what they do is give money to Edison Electric, whose research is highly influenced by the utilities. Its not in their interest to develop solar power. They don ’t go fo r decentralized power. And i t ’s not like it ’s out o f their pockets. I f they spend $5 million, they’ll just raise the rates. ” Spicer: That’s not so. CSQ: That’s my question: Are you serious about renewables and conservation? Spicer: Absolutely. There’s a book we just put out on solar — one of the best pamphlets in the country. We were the first utility in the nation to have zero financing for weatherization of homes. Of course we’re serious. Totally serious. Any new plants that we bring on the line, if we can build them at all, are too expensive. Comment: Tney were the first utility to come up vith weatherization only because the Oregon legislature mandated that the private utilities implement conservation programs. As of Decembet 31, 1979, PP&L had spent over ?5 much money on new thermal plants not yet producing electricity as they had on their weatherization program. They may take out full page newspaper ads telling ns how serious thO’ are about conservation, but the facts indicate CSQ: What about the so-called "dry-hole” clause fo r new power plants in the Northwest Power Bill that Congressman Weaver has objected to; does it transfer risks from the investors to the ratepayers? Spicer: Yeah. I’d say that it does. I think that’s true in anything you do in the United States. The consumer absorbs all the costs whether the corporation can stay in business or not. CSQ: In the event o f a 3-Mile Island-type incident with one o f the\ nukes in Washington or with Trojan, would the ratepayers have to asume the costs? Spicer: No matter what anybody in business does, the consumer pays the cost, whether it’s utilities or anything else. If they don’t, they (the companies) go out of business, pure and simple. Chrysler Corporation is a good example. Comment: The comparison with Chrysle t. Like Congress, the Public Utility Commissioner will not allow PP&L and PGE to go bankrupt, even when the utility’s pro- “ blems result from mismanagement. Ratepayers absorb the costs of such mismanagement. What Mr. Spicer \ wishes to ignore is that ratepayers are increat luctant to assume all the risks of running a business while receiving none of the benefits. Public control of energy management decisions, through the formation of Public Utility Districts, is the obvious (Our thanks to Terry Anderson, David Milholland, Gus Norwood and Eric Stachon fo r their help with this article. Much o f the historical information was taken from E. Kimbark MacColl’s book The Growth o f a City, Georgian Press, 1978). Kufmf tomb KeigkMuuul Sim d tftwpwa S.W. CwWt &Wlutakw THE CATBIRD SEAT 1231 SWWASHINGTON PORTLAND. 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