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process. One difficulty is that 6(c) policies require review for consistency with 

 the current Plan. However, some acquisitions have such long lead time that they 

 are initiated under a prior Plan, which may have conflicting guidance. 



Question 7: Has BPA adequately accounted for the environmental externalities associated with 

 various energy sources in its resource acquisition process? If not, what specific 

 issues should BPA revisit? 



Answer: Bonneville's application of environmental costs to planning and acquisition 



activities is consistent with the requirements of the Northwest Power Act and the 

 guidelines developed by the Northwest Power Planning Council. Bonneville has 

 focused on effects where there is some meaningful economic cost to society from • 

 effects to the environment or risk to Bonneville's ratepayers firom future 

 internalization of environmental costs. 



Bonneville uses resource-specific environmental costs for its planning activities and 

 uses site-specific environmental costs whenever possible for its acquisition 

 activities. Bonneville has developed values for residual air emissions, specifically 

 nitrogen oxides (SO^, sulfur dioxide (SO2), and particulate matter (PM), and for 

 environmental risks to land and water. If a project sponsor can demonstrate that it 

 has purchased sufficient SO2 allowances under the Clean Air Act amendments, 

 BPA will wave the environmental costs for SO2 Carbon dioxide emissions are 

 not monetized, but are part of the qualitative assessment Bonneville conducts for 

 each resource evaluated. These values are updated as new information is available. 



Bonneville applies its environmental damage costs to all resources evaluated for 

 possible acquisition. For example, in its Competitive Acquisition Program and in 



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