17 



For example, a resource that Bonneville reports as costing 35 mills/kWh (in 1993$ real, 

 levelized system costs) reflects all of the known costs and benefits of the resource. That 

 same resource might appear to cost less for another utility, because it may not have 

 factored in the additional system costs. In addition, to compare the costs of a combustion 

 turbine to Priority Firm power, one should factor in the costs of system integration, load 

 shaping, wheeling and backup services. 



However, there may be individual cases where a utility perceives a benefit to developing a 

 resource and decreasing its purchases fi'om Bonneville . There are reasons beyond pure 

 economics which might cause utilities to pursue this course. Examples include insulation 

 from future rate increases, operational control, and marketing opportunities. 



Customer Uncertainty over Bonneville's Competitiveness 



Bonneville's customers are concerned about the uncertainty of future costs. We carry 

 costs that other utilities do not absorb. For example, customers are concerned about the 

 rate impacts of repayment acceleration, nuclear plant decommissioning, and endangered 

 species recovery plans. 



Customers are concerned that resource purchases, when melded into existing system costs 

 will drive the Priority Firm rate up. Actually, the impact of the purchase of a single 

 resource to the costs of Bonneville's system is much less than the potential impact of the 

 external Actors resulting from a changing industry and changing national legislation. 



While Bonneville forecasts show that the Priority Firm rate will remain competitive, 

 including these new resource costs, they do not reflect repayment reform or other 

 substantial policy changes. It is this combination of events that most concerns Bonneville 



4 



