175 



acquired by BPA in the residential exchange. With the current cost of 

 generation at very attractive levels, it may be time for BPA to exercise that 

 option. 



12. What part should Bonneville's existing resource acquisition programs 

 play in Bonneville's competitiveness initiative, both during a transition 

 period and after Bonneville has adopted some of the changes it is 

 considering? 



The restructuring of BPA's resource acquisition activities will play an 

 important part in the success of its competitiveness initiative. We believe 

 that the change must begin immediately. BPA has a total of 505 FTE (388 

 BPA and 117 Contractor) working on a variety of resource acquisition 

 activities or roughly five BPA resource employees for each preference 

 customer in the region. Even if conservation programs are more labor 

 intensive than other resource acquisition programs, it is hard to conceive we 

 are getting cost-effective value out of these numbers. Considering that the 

 utilities are the entities that are dealing with retail customers and are doing 

 the job with many less employees, its time for serious changes in BPA's 

 approach. 



Much of the problem of BPA's current approach lies in the elaborate 

 procedures, tracking and continual "tweaking" that has developed over the 

 years. BPA's current system carries a 40% overhead loading. That means 

 40 cents of every conservation dollar actually goes to support this 

 organization. 



We would suggest the following steps be taken in the transition period 

 to a more competitive BPA: 



a. Immediately proceed to the mean and lean organization that will 

 meet the competitive demands of the future (customer focused, 

 core business/market driven, cost conscious, and results- 

 oriented). Waiting will only increase the uncertainty and lessen 

 the ability to make decisions. 



b. Use the transition period as a period of experimentation. This 

 period could allow for adopting pilot programs that encourage 

 cost sharing between Bonneville, the utility customer and the 

 power consumer of the benefits of conservation investments and 

 100% financing of conservation. Similar approaches have been 



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