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BPA has stated on record that a 20 percent or more rate increase at this time 

 would be unacceptable for the region We believe that program costs, including 

 the costs offish and -wildlife and conservation efforts, can be reduced without 

 harming long-term program objectives With the program cuts being taken, and 

 other possible action, we expect to bring the rate increase below 20 percent If we 

 did not make any program reductions, the rate increase would be 2.5 to 3 

 percentage points higher. 



BPA's Conservation Acceleration Project (decentralization), implemented 2 years 

 ago, was designed to place more conservation acquisition responsibilities in the 

 hands of customers by allowing more latitude in making conservation acquisition 

 decisions The current investigation of opportunities for conservation program 

 efficiencies will examine strengthening decentralization Utilities are continuing to 

 take progressively more responsibility for their conservation results, as they have 

 jointly worked with BPA in developing Conservation Action Plans for their 

 individual service territori|^ 



BPA is aL-^o examining alternative delivery systems for acquiring conservation. 

 One of the alternatives being discussed is tiered rates, which BPA will consider in 

 its next rate case If BPA were to adopt tiered wholesale rates, in which the first 

 block of power sold costs less than additional blocks, utilities could be induced to 

 institute tiered retail rates or run other conservation programs Tiered retail rates 

 should promote investments by customers in cost-effective conservation in order 

 to avoid purchasing energy in the higher rate tiers This could reduce the need for 

 BPA-financed conservation programs 



