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DeFazio Hearing 

 Emerald PUD, page 10 

 September 25, 1993 



meter-reading, engineering design, construction, public relations, etc. However, to 

 our knowledge no one has done it on quite the scale Bonneville is contemplating. 



Through the competitiveness project, every single function of the agency should be 

 structured to compete with alternative providers of the respective service. To add 

 value, Bonneville should be allowed to provide service outside the agency where they 

 can compete (for example, engineering design, contract negotiations, printing, public 

 relations, etc). 



4. How should the costs of environmental externalities, including the costs 

 of restoring endangered fish and other species, be distributed in tiered 

 rates and/or unbundled services? What must BPA do to insure that 

 competitiveness efforts such as tiered rates and unbundling do not 

 diminish its commitment to statutory requirements such as the protection 

 of fish and wildlife? How can the region maintain the benefits of regional 

 coordination and planning if resource acquisition and transmission 

 become more decentralized as a result of tiered rates and unbundling? 



Congress should ensure that Bonneville pursues a policy that includes the cost of 

 carbon dioxide in its resource planning activities. The practice of excluding COg is not 

 based on science but the politics of a past administrations and it should be 

 overturned! The COg issue is like the crazy aunt in the basement, everybody knows 

 she is down there but nobody wants to talk about her. Bonneville must include COg in 

 its analysis! 



The effect of including COg in the analysis would be to increase the amount of 

 conservation and renewable resources in the resource acquisition mix, and to reduce 

 the amount of gas resources acquired. We are fairiy certain that a reasonable adder 

 for COj in the cost analysis of resources alone (not to mention full-cost accounting 

 and the inclusion of other underestimated environmental impacts) would indicate that 

 there is an abundance of other conservation and renewable resource that are more 

 cost-effective than Tenaska, or in the least that the acquisition of Tenaska is 

 premature. Bonneville's bet with Tenaska is that the COj externality will never be 

 formally internalized. This is an unwise bet in our minds and others'. 



When applying environmental externalities to tiered rates and unbundled products and 

 services, it is clear that all direct costs attributable to a particular project should be 

 included in its applicable tier. For example, the cost of protecting the endangered 

 salmon must be included in the first tier if the FBS hydro projects are in the first tier. 



