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ENCLOSURE III ENCLOSURE III 



RESOURCE ACQUISITION 



BACKGROUND 



The Pacific Northwest Electric Power Planning and Conservation 

 Act (Northwest Power Act) was enacted in 1980, in part, to 

 alleviate regional concerns about future power shortages. Its 

 primary objectives included (1) establishing a regional power 

 planning process with participation from all interested parties and 

 (2) encouraging cost-effective energy conservation and development 

 of renewable energy resources. The act strongly emphasized 

 conserving electricity and developing renewable resources by making 

 these activities the first and second priorities of the Bonneville 

 Power Administration (BPA) when acquiring new resources. In 

 addition, the act also authorized BPA to borrow up to $1.25 billion 

 to finance energy conservation investments. Under the act, BPA was 

 authorized to acquire conservation and renewable resources 

 consistent with the Pacific Northwest Electric Power and 

 Conservation Planning Council's (Council) power resource plan, and 

 the Council was authorized to review BPA's acquisitions for 

 consistency with the plan. 



GAO WORK 



In an April 1981 report, we found that, to implement the act 

 successfully, BPA should consider (1) developing an expertise in 

 demand forecasting, (2) including provisions in power contracts 

 allowing BPA access to customers' records to verify conservation 

 investments, (3) developing conservation programs for BPA's 

 industrial customers, (4) completing the acquisition procedures and 

 guidelines for renewable resources, and (5) examining BPA's 

 organizational structure in light of new legislative 

 responsibilities . 



During congressional testimony in November 1981, we reported 

 that BPA's efforts to carry out the act's provisions had proceeded 

 too quickly in some instances (signing contracts) and too slowly in 

 others (formulating conservation policies and developing renewable 

 energies). This testimony reiterated most of the suggestions of 

 our April 1981 report. 



In a 1987 review of BPA's implementation of the Northwest 

 Power Act, we found that the regional power planning process 

 instituted under the act had provided a positive framework for 

 evaluating and planning for the development of the Pacific 

 Northwest's future electric power resources. We concluded that, 

 through the planning process, BPA had identified the types of power 

 resources that should be developed and the timing of their 

 development under differing future conditions. However, we noted 

 that, until regional conditions called for utilities to acquire 



11 GAO/RCED-93-133R, GAO Products on Bonneville Power Administration 



