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Second, under current procedures Bonneville's utility customers operate on 

 annual conservation acquisition budgets. If a utility wants to enter into a multiyear 

 contract with its large commercial and/or industrial customers, it has no assurance that 

 Bonneville funding will be available beyond the current contract year. This system 

 increases administrative cost and reduces the ability of both the local utility and its 

 customers to make long range conservation acquisition plans. 



Some of these problems come with being a public agency. Bonneville's resource 

 acquisitions are slowed partly by the need to comply with the National Environmental 

 Policy Act and with consistency provisions of the Northwest Power Act. These 

 processes, however, are designed to protect the public interest. 



Overall, Bonneville currently is on track to acquire its share of the conservation 

 and renewable resources in the 1991 Power Plan. There is concern, however, that 

 current budget reductions may reduce Bonneville's ability to capture all cost-effective 

 conservation called for in the Power Plan. Council staff attempted -- admittedly, it was 

 an imperfect attempt - to compare the cost of Bonneville's conservation programs and 

 those of its customer utilities against similar programs run by other utilities. This 

 comparison indicated that it should be possible to achieve the power plan's 

 conservation goals at lower costs. How much lower is not clear. The Council is 

 working with Bonneville to identify opportunities for economies in its programs. We 

 cannot be sure, however, that Boimeville will be successful. 



In late April 1993, as Bonneville assessed its costs and programs during the 

 1993-95 rate case deliberations, the Council urged Administrator Hardy to maintain 

 program spending levels adequate to meet the agency's obligations under the 

 Northwest Power Act. These obligations include a requirement to acquire least-cost 

 resources. Energy efficiency measures have short-term costs. 



But we are concerned about the long term, and so we urged Bonneville to use 

 this occasion of budget pressure to move its efficiency programs in directions that may 

 be politically difficult, at the moment, but that will result in conservation resources at 

 lower costs to customers and the region over the long term. For example, we suggested 

 that Bonneville could eliminate promotional activities for new residential electrical 

 space and water heating in areas with available natural gas, and it could streamline its 

 procurement procedures and aggressively seek agreements with chains and franchises. 

 And it could follow through on its stated intent to employ and support customer 

 fmancing of efficiency programs where it has customers willing and able to provide 

 their own financing. Again, the Council does not consider energy conservation a type 



