116 



4. New preference customers shall be able, with reasonable notice, to request 

 and receive an allocation of BPA resources. Including the FBS, subject to 

 public preference. 



New preference customers must be allowed to form and to receive an allocation of federal 

 resources. The adoption of tiered rates does not mean that new public utilities will be shut out 

 from an allocation of BPA resources. Note that this principle is aimed specifically at federal 

 resources that are the subject of Principle #3. 



5. Regional preference shall be retained. 



Regional preference as embodied in P.L. 88-552 will continue to operate. Thus, sales of 

 BPA power outside the region will occur only after customers in the Pacific Northwest have 



Exercised their "first call" on that power (similar to a right of fint refusal). (The PPC legal 

 ommittee is addressing this issue; Puget's understanding of regional preference is different from 

 lie one implied here.) 



(. Customers shall be free to make their own resource decisions, subject to 

 applicable laws and regulations. 



One of the recognized objectives of tiered rates is to promote resource development by 

 BPA's customers. In order for this to occur customers must be free to make cost-effective 

 resource development decisions without undue interference from BPA or the Regional Council. 

 Adoption of tiered rates must not interfere with the ability of individual customers to make their 

 own resource decisions. There should be no new regulatory oversight due to a shift to tiered rates, 

 although all existing federal, state, and local laws and regulations would continue to apply. 



17. Regional publicly owned utility customers must have the option to have 

 BPA meet their loads and load growth. 



There are many utilities that will not be inclined to develop their own resources, even under 

 a tiered rale structure, due to such factors as: utility size, load growth or lack thereof, access to 

 opital, or mere disinclination. These utilities must still be able to choose to have BPA meet their 

 current loads and load growth even if tiered rates are adopted. DSIs seeking additional power 

 shcHild work with their local utilities for either utility or third-party service. Service from BPA or a 

 third party would be through the local utility. 



S. Customer rights to displace purchases from BPA should be clearly defined. 



Customers may choose to displace purchases from BPA by developing resources, making 

 purchases from other utilities, or obtaining other sources of power. In this case, the conditions 

 under which customers may displace these purchases should be clearly defined in the new power 

 sales contracts. This will provide some degree of planning certainty for BPA, the customer 

 making the displacement, and ether customers. Displacement rights should be a function of the 

 nature of the costs of the resources being displaced; for example, the contracts could leave some 

 fixed cost responsibility on the customer exercising the displacement right, if BPA has made a 

 new, long-term financial commitment based on the customer's declared inteoticHi to purchase. 



ATTACHMENT 1 

 PPC Testimony before the 

 Committee on Natural Resources 

 BPA Task Force (Page 3 of 5) 



