257 



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Fuel Switching; 



BPA's "Super Good Cents" program provides a $2,500 subsidy 

 toward the construction of energy-efficient all-electric 

 homes. These subsidies are provided throughout the BPA 

 service territory, including areas that are currently served 

 by natural gas. This has the effect of subsidizing 

 increased demand for electricity which is counter to the 

 purpose of energy conservation. 



Ironically, BPA intends to meet part of the increased demand 

 for electricity in the Northwest by purchasing the output of 

 natural gas turbines. In 1992 BPA signed a letter of intent 

 to purchase 248 megawatts of output from a natural gas 

 turbine to be built in Washington State. It must be noted 

 that direct gas use in the home produces 2 . 5 times more 

 energy than burning the same gas in a turbine to produce 

 electricity that is subsequently used for space or water 

 heating purposes. 



Capital Investment 



A number of BPA customers have expressed a willingness to 

 provide capital financing for energy conservation 

 activities. This could significantly reduce BPA borrowing. 

 BPA is c\irrently considering these proposals. 



Fish and Wildlife 



Most of the exp>enses that BPA attributes to fish and 

 wildlife are the costs of power purchases to firm energy 

 supplies in low water years, when flow restrictions to 

 improve salmon migration reduce the available hydropower. 

 In large part, these power purchase costs cannot be 

 eliminated because they are governed by salmon transport 

 requirements mandated under the Endangered Species Act. The 

 purchase costs could be reduced, however, by aggressive 

 energy conservation; since the replacement energy costs more 

 than hydropower generation, higher cost conservation 

 measures are justified to avoid the energy purchases. 



In addition, BPA plans to reduce the cost of its other fish 

 and wildlife programs by $10-12 million. Some of these 

 programs have been criticized for yielding little benefit 

 for the fish, or for addressing obsolete goals to Increase 

 overall fish numbers without regard to the impact on wild 

 salmon stocks. For example, certain hatchery operations 

 financed by BPA may actually contribute to the decline in 

 wild salmon runs. 



If you or your staff have any questions please contact Dan 

 Adamson (5-1911) or Liz Bimbaum (6-0200) of the Committee Staff 

 or Jeff Stier of Representative DeFazio's staff (5-6416). 



Attachment #1 - Major Statutes Relating to BPA 

 Attachment /2 - Committee on Natural Resources - BPA Task Forr 

 Pre-Hearing Questions, April 7, 1993 



