77 



needed here and would otherwise be lost in the form of water spilled over dams 

 without generating electricity eoid to permit this region to buy power from California 

 when it is needed here during shortages euid periods of heavy use. In the first 

 instance, sales of surplus Northwest hydropower to California has saved some 200 

 million barrels of oil. In the second case, California utilities sold power to Pacific 

 Northwest utiliUes in the drought years of 1973, 1977, 1979 and 1992. 



To protect Northwest access to power. Congress passed regional preference 

 provisions in 1964. Bonneville must offer any surplus power to utilities in the 

 Northwest before selling it to California. Sales to Cedifomia can be called back if the 

 power is needed in the Northwest. 



Net Billing Agreements 



With the dams developed in Canada as well as the United States, the river 

 system provided virtually all the electricity needed by the region until the early 

 1970s. But by that time, all dam sites on the mainstem of the Columbia that were 

 economiccdly feasible and environmentally acceptable were either developed or under 

 development, and the region was looking for other ways to meet electric load growth. 

 Bonneville and the region's utilities were predicting shortages of electricity unless 

 thermal generating plants were brought on line in response to increasing demand. 



The region's publicly owned utilities and investor- owned utilities turned mainly 

 to coal-fired euid nuclear plants to meet growth throughout the Pacific Northwest. 

 Development of such plants was considered the most economic and environmentally 

 acceptable option available at the time. Bonneville helped the utilities respond to 

 these needs by participating in a Hydro-Thermal Power Plan for the continued 

 development of electricity resources in the Pacific Northwest. 



Under the plan, Bonneville agreed to acquire electricity by entering into "net 

 billing" agreements with its publicly owned utility customers. These agreements 

 made it possible for the publicly owned utilities, which owned shares, to sell to BPA 

 all or part of the generating capacity of thermal projects. Bonneville credited, and 

 continues to credit, the wholesale power bills of these utilities in amounts sufficient 

 to cover the costs of their shares in these plants. Bonneville then seUs the output of 

 these plants, melding the higher costs of this thermal power with the lower costs of 

 hydropower. for the benefit of all customers. The plants were cooperative efforts of 

 both publicly owned and investor-owned utilities, but Bonneville purchased only the 

 shares of generating capacity owned by publicly owned utilities. 



Hydro-Tfaermal Power Program 



Under the Hydro-Thermal Power Plan (Phase 1), Pacific Power & Light Company 

 and other investor-owned utifities built the Centralia coal-fired plant with the co- 

 ownership of several publicly owned utilities. Portland General Electric Compeuiy 



