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In purchasing power from a generating resource, the developer has incentive to 

 reduce its costs. Once the terms of a contract are agreed, any cost savings accrue to 

 the benefit of the developer. If that developer is a utility, the utility's customers benefit 

 directly. 



Compared to the necessarily gradual, but steady progress in conservation 

 acquisition, Bonneville's progress in developing new generating resources is much 

 more dramatic. Earlier this year we completed a "midcourse review" of 

 implementation of the 1991 Power Plan ~ about halfway toward the five-year deadline 

 established in the Act for reviewing the plan. In that review, we noted that Bonneville 

 and other utilities in the region have identified resources adequate to meet the medium- 

 growth forecast for power demand. However, few of these resources actually have 

 been sited and licensed. We also noted favorably that the demonstration project 

 elements of the Council's confirmation agenda for wind and geothermal resources is 

 being implemented 



Our review found that the vast majority of generating resources being developed 

 differ from those anticipated in the plaa Natural gas-fired resources predominate, and 

 most of those are cogeneration projects with relatively low levels of thermal utilization 

 compared to the plan's preference for thermally matched cogeneration. If this trend to 

 gas-fired generation continues, the region's new resources will be mostly gas-fu^ed, 

 although the overall resource portfolio will remain relatively diverse. 



Conservation resources 



Traditionally, Bonneville and, for that matter, most other utilities have used a 

 programmatic approach to developing the conservation resource. Bonneville, however, 

 is unique in that its relationship is typically with the local utility. That utility ultimately 

 is responsible for interacting with the end-use consumer to effect conservation savings. 

 Consequently, the effectiveness of local utilities and the relationships between 

 Bonneville and those utilities are critical to successfiil conservation implementation. 



Historically, some of Bonneville's utility customers viewed conservation as a 

 customer service activity rather than as resource acquisition. As a consequence, some 

 utilities appear to be more concerned about whether they were getting their fair share of 

 Bonneville's conservation budget, rather than acquiring conservation savings. 

 Although the Council's 1983 power plan contained conservation acquisition targets, it 

 wasn't until this year that Bonneville's utilities were asked to establish their own 



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