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customers since the early 1980's, and conduct programs in all sectors including 

 residential construction, agricultural eflficiency, and commercial/industrial efficient 

 designs. We are now piloting several approaches to acquiring generating 

 resources in addition to conservation. 



The first pilot programs were a 50 megawatt Billing Credits offering in 1990, 

 and a 300 megawatt Competitive Acquisition solicitation in 1991. Billing credits 

 are available only to Bonneville customers; while the Competitive program was 

 open to independent power producers as well as to utilities Both of these 

 processes solicited conservation, renewable, and fossil fueled resource proposals. 

 Under Billing Credits, customers receive a credit on their power bills for 

 developing resources to serve their own load. The amount of the credit is 

 limited by Bonneville's alternative cost of resources, and other customers are 

 protected by a rate impact test. Under Competitive Acquisition, Bonneville 

 acquires the resources to serve customer loads. 



We assure that costs and benefits are appropriately shared through the application 

 of a cost-effectiveness test. Dissimilar resources are evaluated on a common basis 

 through the application of "system cost adjustments." The prices bid by resource 

 sponsors are converted to a real levelized purchase price, then adjusted to reflect 

 the value of individual resource attributes to the power system. Resource 

 attributes reflected in system cost adjustments include: capacity characteristics, 

 seasonality; location; displaceability; environmental cost; interconnection cost; 

 intertie use; on-line date and contract term; and nonfirm output. The result, 

 known as "system cost," is reported for each resource in real levelized mills per 

 kilowatt-hour. 



