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The Role of Conservation in Remaining Competitive 



We are transitioning from a posture of maintaining conservation capability in a surplus 

 period to the competitive acquisition of a reliable efficiency resource. We are ready for 

 the transition because of the investments we made in the 1980s in infrastructure, pilot 

 projects, evaluations, and research. It is now possible to cut back on the infrastructure, 

 lower the incentives, fine tune the program cost effectiveness, and still achieve the 

 megawatts that we are aiming for. We are also decentralizing much of the decisionmaking 

 authority to Bonneville's Area Office program managers, to give utilities more flexibility 

 and to respond more effectively. 



We are nationally recognized for our innovative conservation prograins. But we have 

 incurred costs in being a leader, costs that other utilities may not have experienced, such 

 as start-up costs, marketing and training costs, and research and development investments. 



The year 1993 presented us with a financial crisis that highlighted the importance of 

 requiring cost-effectiveness in our acquisitions. Due to drought and other external forces, 

 we faced dismal revenue projections. Bonneville's customers cooperated with us to find 

 immediate short term efficiencies, such as dropping some higher-cost measures, and 

 cutting back on administrative overhead. We were able to cut S6S million from our 

 conservation budget for Fiscal Years 93-95. Over time, these emergency short-term 

 efforts will be absorbed and overtaken by programs ensuring continuous improvement and 

 efficiency. We have embarked on a business efficiency review of each program with our 

 customers, seeking to reduce costs over the long term. We anticipate achieving the target 

 of S2 average megawatts (including 12 average megawatts of savings from Model 

 Conservation Standards) in Fiscal Year 1993, and further acceleration in Fiscal Year's 94 

 and 95. 



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