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There is also risk associated with the development of new electricity resources. Natural gas 

 prices are currently very inexpensive, but fuel supply contracts have been known to be broken. 

 BPA acting as a central developer and marketer is better positioned than individual utilities to 

 diversify that risk over many projects. In addition, as the central marketer of power in the 

 Northwest, BPA is able to ensure that new electricity generation does not lead to excessive 

 transmission investments. Finally, BPA is the dominant marketer of surplus energy and capacity 

 from the Northwest, and is better able to sell or re-package valuable services to utilities outside 

 the region. 



Finally, we feel strongly that BPA must focus on the cost of its operations to become a more 

 efficient purchaser of electricity resources, fish and wildlife programs, and electricity 

 conservation. We strongly support these efforts. We do not believe that BPA should avoid a 

 central role in fish and wildlife program support, generation acquisition, regional conservation 

 programs, and in maintaining a strong regional economy. We do believe that substantial 

 improvements can be made in the efficiency with which it does business. 



2. Should BPA adopt Tiered Rates? If not, why not? If so, how should these rates be 

 structured? If there is a specific model or framework for BPA tiered rates that you 

 support, please describe it in detail. What principles shoiUd be used in the development of 

 these rates? 



In general, WSEO supports stronger price signals to ensure that all BPA customers see the 

 higher cost of new electric power resources. An equitable approach to tiered rates can help 

 create an environment where all BPA customers benefit from energy efficiency improvements 

 and cost-effective resource additions. However, the implementation of equitable tiered rates is 

 far from a simple matter. 



0-R2^W 



