100 



Key to successfully unbundling Bonneville's service would be opening 

 the agency's transmission system for access by utility and non-utility 

 generators, thus enabling BPA customers to access competitive energy 

 supplies. Bonneville's activities in this area should be done at a pace that 

 will allow regional utilities to capture the benefits of low-cost, efficient 

 generation. Access to utility transmission is opening under the new 

 Energy Policy Act, and Bonneville should adopt the same practices that 

 will be the norm for utilities across the country. Bonneville also should be 

 required to follow the pricing requirements now being developed by the 

 Federal Energy Regulatory Commission for the utility industry broadly. 



This move toward unbundling of services should not interfere with 

 Bonneville's chief role in the region: to market the low-cost power 

 available from the existing Federal Columbia River Power System. That 

 role, of course, must continue. But as we look ahead, we should 

 acknowledge that we have maximized the use of those resources. The 

 bigger challenge is how we will operate them efficiently while acquiring 

 the new resources necessary to meet growth in the future. 



IV. PacifiCorp supports the concept of tiered rates. 



In a more competitive marketplace, BPA's practice of melding costs 

 into one rate structure will no longer be appropriate. Under the melded 

 cost structure, customers who don't need new resources will bear costs 

 associated with resources developed for other parties. Incremental 

 resource costs are masked under a melded-cost system, and the existing 

 BPA resource pool becomes less competitive. 



For these reasons, we believe it is time for Bonneville to consider a 

 new pricing structure. Specifically we support a tiered rate structure that 

 differentiates between the cost of the existing resource pool and the cost 

 of new resources. 



As we envision it, the existing federal system would be priced at 

 one rate, reflecting its costs, and then allocated to existing customers. 

 Any new acquisitions necessary to meet demand growth would be priced at 

 a higher rate which reflects the cost of the new resource. Those costs 

 should only be bome by customers needing BPA to provide new resources. 



