30 



of regional avoided cost, which is the Council's benchmark for determining a 

 resource's cost-effectiveness, is approximately 39 mills/kilowatthour ($1990). 

 The risk adjusted system cost of the project at 27 mills/kilowatthour ($1990) 

 is substantially lower. 



Finally, Bonneville has recently submitted to the Council a table with the range of 

 system costs for other resources reviewed in Bonneville's Competitive Acquisition 

 Program. Except for cost-effective conservation, which Bonneville is acquiring, 

 Tenaska Washington II is cheaper than any other resources reviewed in that 

 Program. It is cost-effective because no other available and similarly reliable 

 resource had a lower incremental system cost. (See Attachment 1) 



Question 3: In practice, are there significant differences in the processes used by BPA to 

 acquire conservation, renewable and fossil resources? Are procedures, 

 requirements, and administrative demands essentially equivalent for equivalent 

 resources? Are resource acquisition costs and benefits appropriately shared? 



Answer: Bonneville has developed several resource acquisition approaches to carry out the 



objectives of the Northwest Power Act and to implement the guidance of the 

 Council's Plan. We have attempted to apply the principles of this guidance 

 consistently and equiubly while tailoring processes to specific resource objectives. 

 We have taken care to assure that procedures, requirements, and administrative 

 demands are substantially equivalent for equivalent resources. 



Our most extensive experience is in the area of conservation acquisition. 

 Conservation is the highest priority resource under the Northwest Power Act. We 

 have been designing and operating conservation programs with our utility 



