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• Opportunities for alternative energy-service providers to compete; 



• Long-term commitments of conservation funding; and 



• Development of agreed-upon protocols for verifying conservation 

 performance. 



Underlying all of this must be a willingness on the part of Bonneville and its 

 customers to work toward a fair and realistic sharing of conservation costs and risks. 



The Council and others in the region have expressed concern about potential 

 vulnerability to gas price escalation, local air quality problems and possible carbon tax 

 initiatives, and we are examining these issues. In addition, we noted that because the 

 short-term cost of some gas-fired resources compare favorably with some efficiency 

 measures, the region may be lured away from cost-effective, environmentally benign 

 efficiency improvements. As long as conservation remains cost-effective and 

 environmentally benign, we will continue to work toward achieving the efficiency goals 

 of the power plan. 



Fuel switching and fuel choice 



Lower natural gas prices, apparently adequate supplies and the improving quality 

 and efficiency of combustion turbines have increased the attractiveness of natural gas 

 as a fuel to generate electricity. In the I99I Power Plan, both natiu^l gas-fu-ed 

 cogeneration and the use of combustion turbines to firm secondary hydroelectricity 

 were found to be cost-effective resources. Today, with lower gas prices and the 

 outlook for price stability, natural gas is competitive with other fuels even for base-load 

 resources. This raises the question of whether it is better to use natural gas directly for 

 appropriate end uses, such as space and water heating, than to bimi natural gas to 

 generate electricity to serve end-use energy needs. When applied to existing buildings, 

 or other sectors, this issue has been called fuel switching. When considered for new 

 applications, it has been called fuel choice. 



A thermodynamic efficiency argximent for the direct use of natural gas has a lot 

 of intuitive appeal. For example, the energy content of electricity produced at a 

 combined-cycle combustion twbine is only 45 percent of the energy content of the gas 

 used to generate the power. In contrast, direct use of natural gas to fire a home furnace 

 generates 80 percent of its original energy content as useful heat for the home. Of 

 course, to be a valid comparison, other factors such as electric energy efficiency, duct 



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