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mechanism created by the Northwest Power Act, which gives utilities credit on their 

 Bonneville power bills for resources they develop and use to reduce their need to purchase 

 power from Bonneville. The Resource Contingency Program pays developers to site, 

 license and plan a generating facility at approximately five percent of the total cost of the 

 resource. This preparation time typically consumes about 4 of the 6 years required to 

 bring a resource on line. If the preparation is completed in advance of need, Bonneville 

 can then respond to unexpected resource needs in as tittle as 2 years. Competitive 

 acquisition is a method for acquiring resources by comparing proposals on such categories 

 as price, sponsor qualifications, proposed operations, and environmental impacts. All of 

 these efforts are currently under way. 



Although cost-effective conservation is our resource of choice, as we began our 1992 

 Resource Program, it became clear that conservation couldn't meet all our future needs. 

 The most significant issue affecting the need for power resources is not load growth, but 

 rather the potential loss of resources. The early loss of our 30 percent of Portland General 

 Electric's Trojan Plant, coupled with new constraints on the Columbia River system, 

 particularly for salmon, means that additional generating resources will be needed. 



In the 1992 Resource Program, therefore, we decided to acquire an additional 

 400 average megawatts of generation, to be obtained either through power exchanges 

 with other regions or through new resource development. To date, we are negotiating for 

 the output of a cogeneration project, and we expect about ISO average megawatts to 

 come from exchanges. Bonneville customers recently submitted billing credit proposals to 

 compete for the remaining megawatts needed. 



Through the 1990 pilot efforts in billing credits, resource optioning, and competitive 

 bidding, Bonneville has learned a great deal about the resource purchase market. In 

 addition, we have fine-tuned our needs and identified the value of certain resource 



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