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exchange benefits. 



On the other hand, if BPA brings its own costs under better control 

 and holds its costs better than PacifiCorp, it will be required to pay 

 increased residential exchange benefits. 



The exchange should be examined to determine how efficiency can be 

 encouraged and rewarded, rather than inadvertently discouraged. 



One way to achieve this goal would be for BPA to begin collaborative 

 discussions with its residential exchange customers about an exchange 

 contract settlement. A contract settlement could provide BPA with 

 certainty about future exchange costs, while not penalizing Bonneville or 

 its customers for actions taken to lower costs and increase efficiency. 

 BPA and its customers all could pursue the most economic courses of 

 action without penalty. 



VI. Institutions must adapt to the changing marketplace. 



We have been very encouraged by the apparent willingness of 

 everybody in the region, including Bonneville, to take a fresh look at the 

 agency's operations. Some creative new options are emerging. For 

 example, we believe the government corporation concept has merit and 

 look forward to exploring that idea with the task force in greater depth in 

 the near future. 



We would applaud a model which leads to more efficiency and a 

 streamlining of BPA's decision making. We do believe that a governance 

 structure and accountability to customers, congress and the 

 administration needs to be discussed more fully than it has to date. Also, 

 we believe that Bonneville should establish significant cost reduction 

 goals as part of a changing structure. 



It is also appropriate to revisit some of the assumptions that led to 

 the enactment of the 1980 Northwest Power Act, and creation of the many 

 programs we are living with today. For example, we question whether the 

 centralized planning approach envisioned in the Northwest Power Planning 

 Council model remains as valid today, given an increasingly de-centralized 



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