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higher than BPA's rates on a real levelized basis. Today, those costs are only roughly 

 25 percent higher. In addition, competitive new generation (including cogeneration) is 

 available in smaller unit sizes, eroding the advantage of large, centralized power plants. 

 One can argue that BPA is still the better deal, but the narrowing cost di£ferential is cause 

 for concern. 



A strong, deregulated, independent power production industry has recently emerged. This 

 industry provides every utility with a ready alternative to traditional wholesale suppliers 

 such as Bonneville. 



End-use consumers have more economic energy choices. In addition, new technologies 

 are rapidly entering the marketplace, creating greater awareness of energy alternatives 

 such as cogeneration and self-generation, increasing the choices available to end-use 

 consumers, and increasing their ability to control their energy usage. 



Most importantly, regulations regarding transmission are being changed dramatically. 

 This is giving utilities greater access to alternative power suppliers, as well as allowing 

 utilities to compete against BPA by buying and selling in the same markets. 



The wave of deregulation that has swept over the airline and telecommunication industries 

 is affecting the electric industry to perhaps even a greater extent. What changes 

 deregulation will bring are not certain, but the clear lesson from other industries is that 

 organizations which assume continuation of the status quo do not survive. 



