235 



DeFazio Hearing 

 Emerald PUD, page 8 

 September 25, 1993 



UtJIitJes would file their least-cost plans with the Council for acceptance as 

 consistent with the "guidelines." This is different than an approval of the 

 contents of the least-cost plan; it is more a process check. 



A penalty for resource development under a non-consistent least-cost plan 

 should be established to ensure compliance. Several alternatives have been 

 suggested including: 



deducting the megawatts generated by the resource from the utility's first-tier 

 allocation, or a monetary penalty, eimong others. 



The plan should be updated every 3 years, or sooner if conditions warrant. 



X. Tiered rates are not inconsistent with a simple and straightfonward unbundling 

 of products and services. 



XI. Access to federal transmission at cost must be available for priority firm 

 customers. 



To answer the second peirt of the question about the relationship of tiered rates to new 

 industrial loads, Emerald believes that tiered rates are not inconsistent with new 

 industrial development. The message that we believe tiered rates provides is that 

 growth should be paid for where it happens instead of being subsidized through 

 regionalized rates. It is not a necessary conclusion that wholesale tiered rates need to 

 be translated into retail tiered rates. Consumer-owned utilities enjoy the privilege and 

 responsibility to determine retail rate structures best suited to achieve the goals of 

 their respective communities. If a community chooses to encourage a particular 

 activity, be that a new industrial load or a senior citizens housing complex, it is the 

 choice of the elected directors to determine how to pay for that service. It is not 

 appropriate for the region to shoulder the cost of an aggressive industrial development 

 agenda of a particular community. 



3. BPA is considering unbundling the services it provides such as 



transmission, storage, load-shaping and integration services. What are 

 the potential benefits and drawbacks of unbundling? If BPA pursues 

 unbundling, what services should be unbundled and how should the price 

 for these services be calculated? Are there some BPA services that can 

 not be unbundled? Are you aware of any examples in either the public or 

 private sectors of unbundled wholesale power services? 



Unbundling of a system as fully integrated as the federally base system operated by 

 Bonneville will be a Herculean effort. The complexity of unbundled services has 

 recently prompted senior Bonneville staff to question if unbundled services is 



