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government agency to one which is more business-like. A major part of 

 the project is the Marketing Plan. This plan will provide guidance on the 

 products and services the Agency will oflFer, and a strategy for pricing these 

 produas and services, including tiered rates guidance. Very early in 1994, 

 we plan, as part of the work group process, to identify and, if possible, 

 resolve specific tiered rate implementation and application issues for those 

 alternatives showing the greatest likelihood of success. 



The development of new industry in areas served by customers of BPA will 

 depend in part on the retail industrial rate charged by BPA's customer. A 

 tiered BPA wholesale rate would not necessarily lead to a tiered (or higher) 

 retail industrial rate. The tiered rate could, however, encourage BPA's 

 customers to make a more economically efBcient decision in determining 

 whether to promote new economic development by oflfering an attractive 

 industrial rate. 



Some tiered rate design alternatives being discussed by the tiered rate work 

 group involve allocating Federal base system resources while others base 

 the tier size on historical loads without a specific resource allocation. Both 

 types of alternatives could potentially achieve the tiered rate objectives of 

 promoting more efficient resource acquisition decisions by BPA and its 

 customers. In the long run, if this objective is achieved, the region's 

 electric rates will be more attractive to new and existing industrial 

 consumers than would be the case if local decisions were buffered fi-om the 

 long-term costs of those decisions. 



