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the existing FBS resources. However, the PGP believes that by treating transmission more 

 distinctly as a service, BPA can also improve its ability to satisfy, in a nondiscriminatory way, 

 both existing and new nonfederal transmission demands. Again, the PGP recommends that die 

 best way to accomplish this is to set BPA's transmission rates at die actual cost of service for 

 existing facilities, except in clearly defined circumstances such as when new facilities are needed 

 to serve an out-of-region customer. When expansions to the Regional transmission system are 

 needed, we support increased customer participation and ownership, both to improve efficient use 

 of the Region's resources and as a way to lessen BPA's need to borrow from the federal 

 government. 



The PGP's basic concern is that BPA not use its transmission system to limit the availability of 

 new nonfederal resources or to artificially influence resource decisions by its customers. Instead, 

 it should o^er transmission as a nondiscriminatory, cost-based service. 



Three: Partnerehip in New Resource Development 



The third primary service that BPA provides is its participation in acquisition of regionally cost- 

 effective new resources. This service is somewhat unique in that, under die Pacific Northwest 

 Electric Power Planning and Conservation Act, BPA actually has a shared responsibility to 

 acquire new resources in partnership with its customers. However, we have recently seen that 

 the partnership between BPA and its customers is not working as effectively as we hoped it 

 would when the Act was developed. A variety of reasons can be given to explain this, including 

 concerns about the efficiency of BPA's resource programs and the reluctance of some customers 

 to share in the cost of new resources needed to serve odier customers' load growth. Widi these 

 concerns in mind, I would like to focus on the question of wliat BPA's customers need BPA to 

 do in acquiring new resources. 



Essentially, the PGP sees BPA as a potential provider of two types of new resource services, both 

 of which appear to be decreasing in importance. First, BPA can serve as a regional 'fly>^eer 

 to absorb and spread the risks associated with die development of new resources. Historically, 

 diese risks were greatest for large, central-station generating projects. However, the role of 

 central-station generation has been greatly diminished by the availability of smaller resources with 

 significandy lower development risks. And much of these remaining development risks are being 

 taken on by a vigorous new nonutility generation industry and joint utility efforts such as 

 CARES. Thus, it is less clear today to w^at extent BPA is positioned to provide an extensive 

 resource development risk pooling service for its customers — particularly for new generating 

 resources. 



The second type of new resource acquisition service that BPA m^ be able to provide is as a 

 funding vehicle to compensate utilities who choose to develop regionally cost-effective new 



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