The question given to the panelists is how would NSP provide Basic Energy Necessities at a lower rate to residential consumers? It is to include a look at Lifeline rates are presenters this morning on red reform our Keith Sorensen who is a manager of for rate planning and design for northern states power and Bill Luther a state senator from the 45th District. Which includes Osseo Brooklyn Center in Brooklyn Park Heights Ave. Begin Now by asking a master Sorensen to give the first paper and he will be followed immediately by representative built. Find me, Senator Bill Luther Thank you, Judy. I can't help but be impressed by some of the beneficial things that occur because of conferences like this bill Luther and I have been adversaries and times passed over such things as Lifeline rates and that over at the legislature. And as I I read Bell Luther's paper. I'm impressed by the fact that the last page we might have written the same paper as knowledge increases and his contacts increase the views seem to come together in the sense that these problems and to get sorted out. I have a few comments on Saturday Luther's paper. One thing that appears to be obvious in this conference is that we all agree that there is a problem. Rising electricity prices rising Energy prices and the problem of the poor in paying for those services that seems to become the tone of this entire conference. It even appears that Senator Luther and I are in some Santo agreement on the shortcomings of the lifeline proposal. Although he may not agree. Enda an observation that Senator Luther is made it is absolutely true that the Public Service Commission does have the authority to order rates the designed to help the poor who sings there is no disagreement Center Luther has been somewhat critical of the Public Service Commission for not having done so And I guess I'd have to say in all fairness to the Public Service Commission and it's my opinion that they have not had a workable system of such rates which can deliver meaningful assistance to those in need to present it to them to work on and I also feel that in the same vein. He might well have been critical of the legislature for not enacting meaningful Assistance or for that matter. He might have been critical of nitrates already. I guess I'd have to say in in defense of all of us. That we have been on a learning curve which has brought us together now at the Symposium and the thing that's going on now is to exchange ideas on how how best to solve the problem of ability to pay or how to make the service affordable to people who can't afford it. I think our objective in providing assistance to those who need it. To be that the assistance is Meaningful. And that the the kinds of criteria that we would use to measure that meaningfulness would be something like these. Assistant should be targeted. So that those not in need would not receive benefits that are not intended another words. Let's not waste our our limited assistance Resources by giving assistance to people who don't need it. But let's concentrated where it is needed and I think the resistance ought to be comprehensive if it's possible. It should be available to cover whatever Necessities are required if it must be limited to energy it should cover all sources such as fuel oil bottle gas and not merely electricity or natural gas is provided by utility companies because obviously the energy problem for poor people extends to those things. And thoroughly the assistance should be meaningful. I think it would be wrong to hold out. Hope of assistance to the poor people and then provide only a token amount. This might sound bar Collective conscience has but it would be a little Comfort to those in need. One thing I've noticed in all of the rhetoric about rape reform that isn't much. Hope has been held out to poor people and little has been said about how much assistance is possible through rape reform. Hi, I would like to focus some attention on this just to get things in perspective. No, the average residential customer on our system available about $20 a month on his paper and he's right. This is about 500 kilowatt hours of electricity. Number to accept the premise that poor people are smaller users have electricity yet. Let's use an example of a 250 kilowatt-hours that's less than the average male would be about 12 bucks. Now we're going to provide some assistance who rates just for talkin purposes. Let's say we were going to provide a 25% discount that would be more than the amount that Mary Williams has in mind when she says that they serve us all to be provided at no profit by the way, but if it 25% discount, what would we be talking about talking about $3 a month to $5 a month? And while this kind of relief might be welcomed directly by almost any customer, I guess the question is how far would 3 or $5 a month go to provide relief for a retired person trying to live on $175 a month. In other words is this meaningful assistance. I mention this because this is the kind of relief to write design that's available. to Lifeline proposal Hosanna Lutheran I pointed out the targeting problems in the targeting. I mean that when you take a shotgun at a rate problem like this and you say I'm going to provide the first 300 kilowatt-hours of the first 400 kilowatt hours at some reduced-price. What is going to happen is that on the average? You will benefit some poor people. No doubt about that. You will also provide a benefit to a substantial number of people who don't need it. And you'll probably be penalizing a substantial number of poor people who use more than what might be considered to be the life line them up. And I think that sort of makes common sense when you think for example that a family of two living in an apartment doesn't need as much electricity as a family of eight living in a home and then the per capita consumption might be the same or might even be a little less for the larger family. But the point is if you're only going to give the discount on the first 400 kilowatt-hours what happens to go down to is that I believe the lifeline proposal is already targeted. Fact is I don't believe that the lifeline proposal delivers what it promises to deliver and that's why I'm not in favor up. That is not to say that I am not in favor of providing. Relate to people who need it, but I think it can be done in a more effective way. Other kind of right before I'm has been talked a lot about in and hope has been held out to poor people is the time of day your time-of-use rate reform. The time of day right before he does have a lot to recommend it but it's an economic sense. It has to do with allocation of our Collective resources. You've heard a lot of discussion here at this panel about the tremendous trains on Capitol and what the effect of that might be on poor people the time of Dave Reitz time-of-use rates are a horrible cost-based rates, and it said it's an economic approach to thanks. The question is how much help is available to small users are poor people through time of day rates. Well Center Luther points out. The company has been involved with the Public Service Commission for the last two years looking at a time of use rates and so forth and Ida polemon. Airy findings are that the low usage customers may not benefit much at all. There's a reason for that one is that as things stand now, they smaller users tend to use more on Peak energy than the larger user this puts them at a disadvantage with respect to time of day rates are the other reason is that the metering cost to find out whether or not you didn't use more on Peak or off-peak cost some money and it it would add a greater percentage of cost you a small these is built into a large users built with those two things working against the small user. It's very likely that he would have to shift almost his entire usage. To the off-peak. And that would put the burden then load shifting. So to speak on the poor people on the average. Another thing that bothers me about that. Is it with these two things going on at once? I'm not sure that they're compatible. I'm not sure sure that Lifeline rates are compatible with time of day. It's difficult for me to visualize a Lifeline time of day rate in any meaningful sense. The reason I have been talking about this is just a focus all my attention on how much relief is possible. And you can dry your own clothes conclusions as to whether you think that this is an apple records meaningful. And of course any kind of a break on a utility bill does not extend to other necessities by a definition and I guess this is fundamentally. Ynsp favors is a preferred solution to this problem. I'm a more comprehensive assistance program and in which the amount of assistance can be made meaningful. It can be targeted. So the maximum benefit accrues to those who need it and that the assistance can be extended to non-utility necessities. And my opinion this can only be accomplished by the legislature. In summary my comments on Senator loses position come down to this. The reform measures that have been discussed by both. He and I are not likely to provide either the amount of benefits necessary nor will they necessarily reach those For Whom the benefits are intended? I think we would do better to make a serious determination who needs assistance how much assistance they need and then provided on a comprehensive basis. It's kind of a side comment. I'm the one of the things that Senator Luther has said that indeed the only check on utilities efficiency is the Public Service Commission with its limited Staffing budget He suggests. Then perhaps we would do well to give more financial support to the Public Service Commission since the legislature has given them the responsibility to set these rates and also I cannot agree with the Senator's conclusion that implementation of the right before Majors. He has discussed will be slow. I think it's a well-known to him and to me that the time of use implementation plan. That is a result of the Federal Energy agency Grant to the Public Service Commission is proceeding on schedule. I expect to see hearings on these kinds of rates early this spring and I expect to see implementation of them sometime this summer this fall depending on if any problems arise in these hearings and I wouldn't regard that is being slow. in addition to that I would make this promise from northern states power company if the legislature cannot come to grips with the problem of ability to pay in a meaningful way. Then NSP will work with groups such as yours and with the public agencies and we will propose a more constructive alternative to the lifeline plan. Thank you very much. But thank you very much. I certainly appreciate the opportunity to be here today to share the Forum with such a distinguished. Yes. I do. Hope that I'm not as agreeable with. Mr. Sorensen. Is he suggesting I let all of you be the judge but being a being here does remind me of a little story since I'm the only elected official here. I hope you will. Let me tell a little story at least and the story about the three men arguing over which which of their professions is the oldest the surgeon said why Eve was created from Adam, I guess that makes mine the oldest profession not so send set the engineer. I don't know if the engineer was mr. Sorensen or not. So I won't comment on it, but he said in three days the Earth was created out of chaos. I guess that thing that was an engineer's job and the politicians spoke up and said, but who created the chaos? Cuz I hope I don't care too much chaos here this morning, but I never less preciate the opportunity and I particularly appreciate the fact that so many of you would take time out of your busy schedules to be here until listen to a to a debate or panel discussion on rent reform. Let me start by saying that there's little dispute that residential customers of gas and electric services in Minnesota are facing a serious problem over the past 15 years energy consumption. Minnesota has doubled and it is continuing to increase today at a rate of 45% Even though minnesotans are less energy-intensive than the nation national average in spite of our cold Winters. He had a comparison of energy uses shows that Minnesota uses considerably more energy for residential and Commercial purposes. Then does the nation as a whole simply means to me that energy consumption in Minnesota is often times and necessity rather than a lecture e as the cost of energy increases along with increasing demand low and middle-income families are the hardest to a recent survey indicates. And I think these figures are interesting that lower-income families earning less than $3,000 a year spend about 5.2% of their income on energy and middle-income family spend 2.1% while families earning more than 25000 a year spend only 1.1% of their income for fuel A hardship posed by recent utility price increases has been especially great on our senior citizens. Most of them live on fixed incomes very little public assistance to alleviate. The problem has been forthcoming today. I think it is safe to say that over the long run energy price increases will continue to outpace increases and real income consequently. We must assume that the plight of low energy users is going to worsen in the coming months and in the coming years think we must come to grips with that reality and one way to do that is to explore how utility rates might be reformed to assess low and moderate-income users of utility services, which is the subject of our conference here today first just a few comments on the rate-setting process. There are two basic parts to the process the person fall involves determining the total revenue requirements of a utility. That is look at the right face the expenses determine what an allowable profit should be the second and a very important part of that process is to determine how any allowable increase in rates should be distributed among customer classes such as residential commercial and the second part is often been called rape design. It hasn't been discussed a lot but it is being discussed more and more today in Minnesota. The legislature has almost complete Authority and discretion to review and approve proposed rate increases and right this time. However, I recently released Federal power commission report 1 1977 suggests that are Public Service Commission has not been overly protective of our residential consumers in Minnesota. While the report showed Minnesota residential electricity rates were slightly below the national average. It also show that the states rights for large commercial and Industrial customers were far below the national average Minnesota with the average cost for 500 kilowatts hours of residential electricity. A $20.48 was just below the national average of $20.86 the differences for large commercial and Industrial uses were were much more pronounced. In fact for the largest class of industrial users. Minnesota rates were about 18% below the national average and I think that's very very significant. There have been some reason positive signs that the Public Service Commission is willing to look at Social considerations in the 1975 NSP right case for example, the PSC decided that large commercial and Industrial user should shoulder a 15% increase and residential users about an 8% increase. However, this direction has more recently been abandoned by the Public Service Commission in the 1976 and SP right case for the PLC allowed in 11% increase for residential consumers, but reduce the rates paid by large commercial and Industrial users to 7% and froze the rates for small commercial customers less than two weeks ago the Ramsey County District Court appeal that decision relying on the legal principle that when the Public Service Commission axe in a legislative capacity, which is what the legislature has provided in this particular case its decisions will be upheld unless they are shown to be in excess of Authority or resulting an unjust unreasonable or discriminatory rate. Utility such as Hannah speed as mr. Sorensen suggested here could take it upon themselves to propose rape allegations, which would benefit residential consumer consumers in Minnesota. They have not perhaps because of the impact that such allocations would have on the utilities friends in the commercial and Industrial community. Perhaps the legislature needs to set guidelines in order to ensure that the needs of residential customers will be addressed through the psc's future utility. Right decisions have been granted the PSP the broad Authority which they are exercising today. The legislature can easily establish guidelines for the PSAT to follow and rape cases so that the disparity between residential and Commercial and Industrial rates in Minnesota as compared to other states will be licensed. And in addition to that kind of a basic reallocation of rights, which can be done. There are at least two other rate design proposals, which are being Mansion which Merit discussion here this morning. The first is time-of-use rates. Mr. Sorensen went over that briefly with with you these right structures provide varying rates for electricity use at different hours of the day. We can hear they attempt to recognize that the cost of electricity very not only with the amount and rate of electricity consumption, but what's the time of consumption? When the demand for electricity at the peak times exceeds the current combat capacity to produce new generating plant to produce electricity new generating plants are needed to fill that need and someone must pay the cost of building them the peak hours of electricity use are considered to be between the hours of 5 p.m. And 9 p.m. With time-of-use rates lower prices per kilowatt-hour of electricity are offered at the off peak hours under this price in concept consumers are encouraged to ship their electric usage and are given a monetary incentive to do so the burden for the establishment and implementation of time use time-of-use rates is threefold because Utilities in Minnesota have not taken the initiative on their own Regulators must encourage. If not order the utilities to implement them then utilities and Regulators must take the responsibility of modified of Designing rates and facilitating their usage and of course, Consumers must take the responsibility of modifying their Lifestyles. If any of the three parties fails to accept the responsibility time-of-use rates will not work. But unfortunately to date the consumers of the state of Minnesota have not been able to do their part because utilities are simply not offered time-of-use rates in the state of Minnesota. They're obviously problems and limitations associated with any attempted rape reform that cannot be overlooked among these are the obvious administrative costs and the technological costs involved such as metering time-of-use rates require new meters, which accurately measure electric usage the point to be made. However, is it these problems and limitation should not prevent us from moving forward in an expeditious manner of Public Service Commission is Mister Sorensen Mansion has been working with an Espeon the time of you straight concept for approximately two years. At the present time Minnesota has received a grant from the federal department of energy to facilitate the implementation of these rights within the state, but I think it's appropriate at this conference and SP has not picked up the ball on the time of use right concept rather than simply play in the construction of new power plants, Wisconsin utilities have done it and I at this point just want to quote an article in the Minneapolis Tribune that may shed some light on this particular point. It happens to be a quote to actually prime minister Sorenson who is here today in the statement that was attributed to him in the Minneapolis Tribune is that mr. Sorenson manager 4nsp worries that an early over response to the rates could create problems because NSP will have sufficient seating capacity for the next few years. I think it's that kind of attitude and that kind of approach quite frankly that that is why the public in the state of Minnesota fields that utilities. I'm more interested in filling the Bally's then cutting off the pics. And so that's a concern that I want to express here this morning at this conference the second life line rates offer uniform low rates for the first several hundred kilowatt hours of usage per month provided to residential customers or you might say lower rates for the first block of kilowatt hour usage this mental minimally price block of electricity is priced below the rates charged for successful successive blocks of kilowatt hour usage. There's been much Nationwide controversy over the implementation of Life Lion rights proponents feel that this type of rape would alleviate the burden of rising Energy prices for poor on fixed-income residential customers and ensure that they have electricity for essential purposes include Lighting cooking and Refrigeration at the minimum light Bryant Lifeline rates have also been cited as an incentive For Hire usage customers to conserve energy as easy as there's other people's Wonder most Lifeline proposals would compensate the company for the revenue lost through the provision of Life Lion rates opponents of Lifeline proposals. I ever suggested those most in need of the right could not take advantage of some studies indicate that many lower-income customers live in Master Meter dwelling units additionally a large percentage of the poor living poorly insulated homes with any fish and heating and older less efficient appliances and have home oriented lifestyles in these cases. Lifeline would not be affected. There are however limited experience of Life Line work in California is Pacific Gas and Electric Company instituted a Lifeline rate last year in the result. Although the results are inconclusive today. Michigan has a Lifeline rate for electricity. Only several other states have Exempted the initial block of electricity. Rate increases Ohio has taken all the lights that citizens over age 65 or who are disabled child have their electric and gas utility bills discounted by 25% balance. Ability is determined by a yearly income of no more than $7,000 in Minnesota little progress has been made a Lifeline today. Although I have personally author bills for the past three years to establish Lifeline race for the residents of our state the states utilities and the large commercial and Industrial users in Minnesota have strongly opposed to measure last year at least some legislative progress was made when the Senate Commerce Committee Amanda the bill to provide for the study of Life Line rates in Minnesota, and then recommended the bill for passage. The bill is now in the Senate finance committee. Needless to say any customer living in a dwelling with a Master Meter. Can I take advantage of either a time of use right or a Lifeline? Right we must therefore request utilities to eliminate Master metering and all residential dwellings. So the customers themselves can exert control over their energy usage and thoughts be rewarded by the benefits of a lower rate in conclusion. I would say that perhaps the most unfortunate aspect of the subject of utility right reform is it it is a highly Technical and complex subject. That's despite the dramatic effect, which it has analyzed the minnesotans very few public officials take the necessary time to tackle the problem. But what is desperately needed today is much more involvement by public officials and the public-at-large in the right setting process. This involvement is needed to provide some degree of balance against the utilities current Monopoly of expertise and information one possible solution would be to create a consumer action office to serve is an ad. On behalf of Minnesota small residential consumers who are otherwise unrepresented in our process. It could provide the financial resources necessary to hire the qualified personnel and conduct essential research to effectively challenge proposed utility rate increases and write designs as well as some of the assumptions which have been used for years to justify. Our current rate structure. There is precedent for establishing an active consumer Advocacy Office in the States of Virginia, Pennsylvania and Florida such offices exist. I feel such an advocacy unit could serve to expedite serious consideration of right reform measures such as those that I've discussed here today. It would also permit a serious investigation into the underlined justifications for proposed trade in crisis because of the territorial Monopoly what utilities enjoyed today there is virtually no industry competition to control cause utilities earn a return on their rape case. Expenses directly through to the consumer efficiency of utilities operations is our Public Service Commission with it's very limited budget and limited staff. Some regulatory progress has been made in the past such as in settings strict strict advertising guidelines for Public Utilities, but much more needs to be done. The Public Service Commission is currently experiencing serious difficulties retaining its staff as Private Industry offers more lucrative pay we can only expect this problem to get worse in the future a consumer. Advocacy unit could help to alleviate this problem before measures such as those mentioned about have the potential of easing the burden with utility prices are placing a low and moderate-income consumers and particularly the burden that those increases well place and those consumers in the future as utility rates continue to go up. I do feel that implementation of these measures will be slow until residential consumer. Look at large have an effective voice in this very technical rate-setting process at thank you very much and would be glad to answer questions. A question put to the panelist is what responsibility does MSP have in formulating policy for determining the environmental and social class of energy production. Because on our panel art only been husky with a general manager of environmental and governmental activities department for northern states power and Charles Dayton Dayton Herman and cramps. I might also add that checking is a long time activist in a number of areas including a power and land reform begin with mustard and Husky and if you're dating making me open his presentation morning, ladies and gentlemen, when you said that we would receive some insights. I guess I have received some inside. So I just need a session that we've had this morning and also in the paper by Chuck Dayton state that the general that I received in review of his paper is Ben Ennis pee is in complete control of its destiny. Now with all of the regulations and agencies that we answer to on rates environmental regulations need plant siding and others. I would have to develop if I were going to develop a paper the opposite Viewpoint. And so this morning when the gentleman suggested that maybe one way that we could say CJ each other's Viewpoint would be by changing jobs this I think would be a possibility with respected Chuck date and then myself When I like to do now is turn our attention to some areas that we agree on. His theme is that in all matters, including the environment and its pee must develop policies in the best interest of the people it serves and effects. In fact, I would like to quote from his statement on page 2 in which he mentions a loose definition of a public-interest school for energy production would be to ensure a continuous supply of energy which together with reasonable conservation measures will provide sufficient energy for society's needs with the least possible adverse social and environmental impact. And if he includes in the term social if he includes cause I think we can pretty well support that statement of purpose. In fact quite closely at the mission statement that Don McCarthy mentioned last evening. Both of us are trying to explore together who is the public all should they have a voice through the effect of elected officials directly or by by a combination of both directly and the elected officials and thirdly, of course, we would support the statement that the the utility should remain an investor-owned utility. And so we can agree on the goals that that he has stated. I think we're a difference is come is how to achieve them. Now his opinion of what public interest is needs exploration as what he's as well as what he feels are the facts. If I interpret it from his paper the public interest are devote more resources to environmental control to go far beyond regulations and standards and this is what the attending higher price. He also indicates the direct major utility resources to conservation and direct more effort to new technology and they will be discussed later panels if we include in their technical consideration, if we include economic consideration, and we include an equitable balance of all of these factors again, I think we have an area of agreement. I think that the real question that we are here to explore is by what process whether there is any validity to his opinion to our opinion or to any of the opinions that are being expressed here today? No, let me just briefly comment on some of the facts that he indicated in his paper. The implications are there that NSP wants to overbuild install recently. We revised in a plenary fashion our forecast downward. We indicated to the PCA and the mea that Tri-County number three would be deferred from 1981 to 1982 to me like we are interested in over building but I think the key one and maybe this is work we change places we could get a different Viewpoint Israeli that with all of the problems associated with plant siding with need and with certification and the permit process. These really are not what you call incentives for over building. Second wave newspaper. He cites the CTA UK line issue. It's coated Andre. I don't feel like that is relevant. We have had Experience line routing process of the routing the 500 kV line from the Twin Cities up to the Canadian border in the scratch from Ford's which is a site located near Eveleth, Minnesota to the Canadian border there. About 70% of the line was routed based upon the citizens committee recommendation, and it was not our preferred routes. Thirdly the comments on a southern Minnesota study that the people's feelings are that they are left out. I feel are not sold. I was on a steering committee that about a year ago native made the policy decision that we would go out and communicate with the people at these various sites. Prior to submittal of any sites for the eqv. We are staff Mike that since June has been engaged and numerous discussions with people in areas. Where were talking about the various sites. I personally was at a meeting with Lando landowners add a meeting a down in Mankato and Lake July which was specifically for the purpose of discussing with those people what what the signing process was about and what we are considering The statement about Circle o is not supported by fact, we do meet present lady and in quality and also the admission standards for SO2 in my paper or what I was referring to is that when we went beyond the standards that was back in 1971 when the new source performance standards established as yet and yet the corporation did agree to install scrubbers and did agree to meet those standards, even though we weren't required to do so in a lemon tree meeting and discussion with Chuck Dayton. He indicated that what he was referring to was really Sherburne County 3 and 4 and we are in the middle of an Eis process there. We feel that the studies that have been performed indicate that the design on the plan will meet the standards. There is some disagree. From the PCA staff at that the information submitted that it might be questionable. Cancel our economics priority reports is quoted and there I question that really is real basis for comparison that particular report which was based on 1975 data. Compared about 15 utilities it compared utilities that operated both with coal-fired power plants and also oil and gas power plants naturally in the comparison on for example particulate submission, you would expect that the oil and gas fired plants would be rated near the top. That's what they were the ones with the coal-fired. We're rated near the bottom. And that's where they were as I mentioned the date. It was based on 1975 data since that time. We've installed Sherburne County one and two which are meeting a new source performance standards that has not been factored into the information. One other spot to that and looking over his paper. I meant I noticed that that indicates that we are receiving opposition from people in the development of major power plants and transmission facilities. I think that in today's society the same could be said for any major issue. I was thinking things such as school bonds don't don't stadiums and highways all of these involve expression of people with conflicting interests and it's our Democratic process that through this process. We will resolve the issue and certainly we would be interested in any means of minimizing the opposition that is occurring with respect to our facilities. Well enough said on some of the factual differences. I think our basic purpose here is to discuss policies not issues where there are factual differences. Dimension at the beginning basic theme is that in all matters including environment and its being must develop policies in the best interest of the people get swords and effects. I think this is our common goal, but now is some of the questions that we need to explore together or what role should the government have mention was made of the concern that by the people that when the need process was going on. They weren't aware of it. Should the process be changed. If so, what changes should be made? basic question who represents the public is a few people in the audience groups that you represent really who is the public? How much more is a public willing to pay for increased Environmental Protection? What is it a dollar a month $2 a month $10 a month. These are questions that I think we should explore together. Did they want more the same or less reliability? This is really a key issue that we should be talking about. Finally does the impact in public want to know more and communicate more about energy projects or is their desire just not to have any guarantees are questions that we should be exploring today. Couple of days ago. I attended a meeting where dr. Luther girl out the Gerlach spoke and he was discussion discussing the CPA UPA issue and he can put it in a box with the thought that I think is appropriate here. And that is there are no easy answers. India the time limitations I'll shorten up what I said in the paper, but you may want to take a look at it. If only because it's the only one that has a cartoon. I think that must have been kuskie. Nitpick a lot of things in the paper, but didn't really address the major thrust of the paper and I'll try to convey that the question what's nsps responsibility in formulating policy for determining environmental sauce environment on social cost of energy production, I think is answered. by the statement that NSP has the responsibility to determine those policies in the public interest because in fact NSP has what amounts to sovereignty rather than the state agencies that regulated really, in fact make the basic decisions. And so therefore it's Duty goes far beyond its duty to its shareholders to make a profit and to comply with applicable law goes far beyond its duty to its customers because of its impact on the economy in the environment because it's illegal Monopoly its primary goal should be the service of the long-term public interest. The government ostensibly has the legal authority to regulate the company, but the thesis that I set forth in the paper here is that NSP or the utility involved generally makes that decision and I'd like to examine that both in terms of short-term decisions and long-term decisions. And I think the long-term decisions are the most significant but because the policies that are developed by the company are are so important and are going to control the decision. NSP is going to have to be responsive to a broader constituency or ultimately the state's going to take it over and I don't Advocate that as a policy. I'm just making an observation that I think that will be the result in the long-term unless the company is responsible to the public interest. He stated my definition of the of the public interest. The short-term decisions that I'm talking about are the forecasting of of need or demand or plants the sighting of plants and transmission lines and the installation of pollution control equipment in forecasting demand. I think the experience shows that in fact the company has control over the expertise and information and that the state agency lacks the confidence to be able to challenge whatever the company quotes for. Any example that that he cited nspc got the state agency to issue a permit to go ahead with construction based on projected need. The state agreed with that is p issue the permit NSP been revised its forecast changed its changed its application and said we won't need that plan for another year or two years. A pipe point is not that NSP did anything unethical or dishonest at that point, but it was in his peace decision not the states. In a question of sighting of plants and transmission lines. naturally the industry generally not just in Sp is involved in the CU lime. I think that the comments would apply naturally the industry supports the idea that the state rather than the industry can make the decision as to where the plant will go and where the lines will go because it takes the political heat off the company people get mad at John Mulholland people get mad at Peter Vanderpool and he QB now in addition to getting mad at the company where before they only get mad at the company. So once you get past the once you get past the certificate-of-need stayed it's fine to let the state make the decision, but in here again that the company said Decisions control and eyesight at some length in the paper a concurring opinion by Justice yetkin the Powerline case in which he said the agency didn't do its job. It was passive the company. In fact selected the route and the agency for Less rubber-stamped it and the same is true with the need for thneed projections on the installation of pollution control equipment. This is where they always want us to put more pollution control equipment on that's going to raise the cost and I'll look for people going to have to pay more money for their for their equipment, but they make the statement NSP will do more than is necessary to meet regulations where it's appropriate to do. So who makes the decision that is appropriate to do so and SP he also says when we think that it's not in the best Interest of society to meet the regulations that are imposed by law. That will go try to change those regulations. Again, it's the company that's making the decision rather than the state. When they decide that the regulations are to top then I'll go out to change the regulations. I also saw it in the paper some examples from the California experience with SO2 showing that the that the levels of SO2 of 2.1 parts per million 24-hour standard have been shown by evidence received by that board to be to create a health risk in urban populations and evidence that at that at that level which is the Minnesota standard in New York and, New Jersey. SO2 has been found to contribute to it and to have a cold carcinogenic affect other words in. Conjunction with other pollutants can cause cancer and it could contribute to excess death rate. The Council on economic priorities study ranks and SP. 13th out of the 15 utilities studied in overall air and water pollution control and sixth of the 10 utility surveyed in the pollution control equipment. There may be a lot of reasons for that baby. And if he may be able to explain it away and maybe and it is 1975 data, isight it only because of the statement and and Huskies paper, which has NSP is firmly committed to Environmental Protection and you are worried that light of the Council on economic priorities report the most important. Responsibilities of the company in formulating policy. However, I think is not in what you do with the power plants that are already online and they're going to be in the next couple of years, but it's the long-range picture and the predictions for the number of plants were going to need between now and the end of the century range anywhere from 5 to 30 depending upon who's doing it. And what assumptions make about economic growth and the effectiveness of pollution the effectiveness of conservation measures. obviously The mix which actually occurs is going to be determined in large part by the policies of the utilities themselves by directing their resources and influence to our particular solutions. They intend to ensure that their choices become reality. And energy program director that the public interest goal that was Define is to find in the paper. I think would shift the emphasis away from the construction of new nuclear and coal fire generating plants and toward the implementation of conservation measures and the development of alternative sources particularly solar energy, the long-range policy of NSP. However, is apparently developing in the other direction and I don't know exactly what its long-range policy is cuz they haven't told me in this area but a majority of its 1978 research and development budget will be spent on nuclear energy about 2.5 million out of 4.5 million. I understand that the issue of nuclear energy will be discussing another conference to be playing in the immediate future. I'll take a whole day and it and it isn't it is a significant issue and there are a lot of Questions that need to be debated openly there and I don't intend to go into him at this point 1 million of its research and development money will be spent on solar related research and I don't know what solar elated means grab somebody will speak of that this afternoon they contribute to the Edison Electric Institute FastMed or breathe fast metal reaction program and the president of NSP the other day was issue and gloomy forecasts to the business community that we're facing mean years in the near future, which I think is intended to suggest that I'll snsp can develop a nuclear plants rapidly economic growth is going to suffer. I think they have a public responsibility to rethink this apparent policy of favoring the construction of new plants as a primary goal and to direct resources toward the minimization of the need for new plant construction. It has that responsibility because of the extreme risks of the development of nuclear power the environmental costs of large-scale production plants and the adverse economic and employment impact of nuclear and coal plants very briefly and summary very Commodores pointed out several papers one here last fall when a Denver on a conference on energy and jobs that the new electric power production plants require extremely high investments in relation to the energy produced when compared with oil or natural gas. It's an inefficient use of capital. Does a policy favoring coal and nuclear plants weakens the economy by creating a drain on the availability of capital it aggravates unemployment because capital for such plants might otherwise have been invested in more labor-intensive Industries or over it promotes the development of other Industries, which are energy-intensive rather than labor-intensive which brings us to the question of solar energy. The contrary to the assertion. I think I'm some spokesman for the industry. And what I understand is a push the position of the n-double-acp. It's not true that expansion of coal and nuclear energy production are essential to jobs. In addition to the point that I that commoner makes about a sucking up the available supply of capital and taking it away from other Investments solar energy could and probably will create an industry that will create millions of jobs in the production and installation of equipment has been estimated to web. Replica, 3 million private homes for 60% solar heating and cooling in equipping 2.3 million new homes with 60% solar heating would generate 24.4 million hours of work and in the next 10 years. The final question is even assuming an NSP said okay, we will support the development of solar in solar energy will go all out. And that will Lobby for it then. Will it be a solar? Will it be solar production with centralized technology so that NSP or the utilities have control of it, or will it be decentralized small-scale technology that NSP? Well, I have control I think they Have a responsibility to address that policy question and I think that the broad range public interest on that issue is toward small-scale technology and it may not be in the best interest of shareholders, but I think they've got to serve that long-range public interest in that decision.