97 



23 



WNP-2 but on a lesser scale than done by PGE for Trojan. BPA maintains a 

 continuous dialogue with WPPSS about WNP-2's performance to date and 

 long tenn strategic targets for WNP-2. The targets include increasing capacity 

 factor and limiting cost growth to achieve a total cost of power of 26 

 mills/kwh in 1990 levelized costs. Most recently, in October 1992, BPA 

 formally presented to WPPSS managers a comparison of WNP-2's cost of 

 power with BPA's competitive acquisition results and with Trojan. The 

 comparison showed that WNP-2 needed to meet its strategic targets to be 

 competitive with BPA's new acquisition opportunities (1990 levelized costs of 

 34 mills/kwh). BPA has notified the WPPSS that achievement of the strategic 

 targets for cost of power is critical to the future of WNP-2. Failing to reach a 

 65 percent capacity factor and not holding the line on costs would cause WNP- 

 2 to not be competitive with other resources and could resuh in WNP-2 

 meeting the same fate as Trojan. The WPPSS has committed to and is 

 progressing towards reaching those targets. 



