98 



24 



Conservation 



Question 1 ; In a letter to Chainnan Miller dated March 24, 1993, the Northwest Power 



Planning Council stated that BPA "has not been aggressive in reducing 

 program administrative costs" for conservation programs. Please identify 

 potential savings, if any, per fiscal year fi-om FY 1994 to FY 1998 fi-om 

 reducing administrative costs of conservation programs. 



Answer: Conservation is a resource for which quality control is essential. This requires 



administrative costs at both the level of BPA and the individual utility. Many 

 of these costs are fixed in absolute terms, and others depend on the level of 

 activity. BPA has committed itself to an agency-wide review of every 

 function, including conservation and generation acquisition activities. We have 

 been examining the issue of administrative cost in detail over the last four 

 months, and are looking for efficiencies in both direct and indirect 

 administrative costs. The challenge is to acquire more megawatts for 

 approximately the same or slightly increased administrative support. BPA 

 programs have already shown this type of improvement fi"om FYs 1991 to 

 1992 as our "dollars-out-the-door" went up by about 40 percent without an 

 appreciable increase in direct or indirect administrative costs. Just as in all 

 other program functions we are reviewing and will be cutting costs in our 

 conservation programs. Program budgets for FY 1994 through FY 1998 are 

 projected to grow, however, we will be reducing FTE, and support service 

 contracts. These costs can vary with the level of activity and will not increase 

 at nearly the rate of the incentive budgets. 



We are striving for continuous improvement, but do not have an estimate of 

 administration-cost savings for the FY 94 to FY 98 period. 



