Good Morning. As Governor of Idaho, let me welcome you to our beautiful state and our capital city of Boise. Chairman Hebert, Commissioner Massey and Commissioner Breathitt -- thank you for coming. We are joined by representatives of the Governors from various Western States, members of their Public Utilities Commissions and other distinguished guests. I welcome all of you.

One of my responsibilities as Governor of Idaho, and the desire of everyone here, is to ensure that our citizens, businesses and industries are provided with the benefit of a continuous, reliable and affordable supply of electricity.

As we are all aware, the energy crisis that is plaguing California is only a symptom of a deeper problem that is affecting all western states and our nation. The problem of an inadequate supply of electricity - and an ever-increasing demand for it - has and will continue to have serious ramifications.

In Idaho, the energy shortage will be compounded with what could prove to be one of the driest years in history. Snowpacks are at less than 50% of normal and none of our major reservoirs are expected to completely fill. This means less water to generate needed electricity, less water for agriculture, and less water for endangered salmon recovery efforts.

But rather than look at what’s wrong, we’re focusing our efforts on how to make it right. To solve our problems, we have to encourage conservation to reduce demand, modernize our energy infrastructure, and increase our supply with new generation.

Conservation is the surest and most immediate way to minimize the energy shortage and reduce the impact of rising rates on consumers. By conserving, people save money and they contribute to the solution. But, we have to educate our citizens because conservation requires changes in habits and lifestyles.

The State has taken the lead by implementing energy conservation measures in state facilities, and we’re working closely with all utilities.

Hand in hand with conservation, we’re also working to shift more of the energy demand to off-peak hours. By flattening the spikes in demand, we can alleviate the burden on our utilities during the peak hours of consumption when energy must be purchased at higher prices on the open market.

In addition to conservation, we have to look at modernization. This year, I signed legislation that allows the state, our colleges and universities and any public building manager to enter into energy-saving performance contracts with energy service companies. These contracts will allow us to upgrade public facilities, making them more energy efficient with no up-front capital expense. The subsequent energy savings will pay for the cost of upgraded equipment. The benefits will be immediate and savings are guaranteed.

In that same context, we will be working with you and others to encourage investment in our energy infrastructure. Unless we up-grade transmission lines, generators and pipelines , it is doubtful that we can facilitate much of the needed increase in transmission.

Ultimately, a stable energy balance will not be reached until we begin producing more energy. Earlier this year, I issued a directive to the Idaho Department of Environmental Quality to expedite the review process and application process for new energy generation. This will reduce the waiting period from 120 days to just 30 days.

Streamlining the process for acquiring site applications and energy permits will facilitate and expedite increased power generation to meet existing and future demands.

Idaho is also committed to work with FERC and other parties to encourage a united effort to streamline the licensing and re-licensing process. As we build new power plants and as we explore alternative forms of renewable energy, such as wind, solar, fuel cells, and geothermal, it will be imperative that government is a facilitator and not a hindrance to progress.

There is a strange irony in all of this. The solution to our problems lies in reducing demand and increasing our supply of power -- improving efficiency, building new generation facilities, upgrading infrastructure and promoting conservation. Yet, some believe that government price controls are a solution. While they may appear to be appealing, price caps do not provide incentives for conservation, and they discourage investments in new generation by degrading the ability of investors to recover capital costs.

Price controls are contradictory to the principles of a free market. They stifle competition, and they distort market conditions. They may provide short-term relief to the consumer, but unless we are willing to undo federal deregulation of utilities, price controls can and will undermine the long-term stability of our energy market.

Still, as public servants and officers of government, it is in our trust to ultimately work for the benefit of the public, both in the short-term and in the long. Rising power rates will have a real effect on our citizens -- especially on struggling businesses and those with fixed incomes.

That is why Idaho is working to provide alternative solutions to government-imposed price controls.

Today, I will sign into Idaho law Senate Bill 1255, which gives another tool to our Public Utilities Commission that they may use in the event that utilities incur substantially large debt that would require substantially high rate increases.

To prevent potential sticker shock and to minimize the impact on our citizens, this bill authorizes our Public Utilities Commission to issue bonds to cover utility debt and spread the cost to consumers out over a period of time. It won’t prevent price increases, but it will dampen their effects on industry, on struggling businesses, and on our citizens. I hope that they will never have to use it. But, if rate hike of that magnitude occurs, we will be prepared.

I support you in your efforts to contribute to a resolution of our energy problems. I also support the work of the Administration and Vice President Cheney’s Energy Task Force. The challenges are great but there are solutions. By working together, the states and the federal government can develop a cohesive energy strategy that will benefit the public whom we serve, now and in the future.

Thank you and may your meeting here in Idaho prove efficient, effective, and enlightening.