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strengths as a regional catalyst. Four, focus resource acquisition 

 policies, programs and services on the needs of end-user customers. 



Regarding the first element, we need to let the market forces 

 work as efficiently as possible. Tiered power rates will be a signifi- 

 cant tool for encouraging efficiency. We strongly endorse Bonne- 

 ville's commitment to estabUshing tiered rates £ind we likewise en- 

 courage customer-owned utiUties to test similar pricing mecha- 

 nisms. 



Tiered rates remove one disincentive to local utiUties, but other 

 barriers exist. Some utilities serve slow-growth or no-growth areas 

 and they fear rapid price hikes if loads drop as a result of conserva- 

 tion incentives. 



Still other utilities lack the financial and technical resources to 

 fund or operate fiiU-scale conservation projects. Many local utilities 

 can't take on the administrative burdens imposed by Bonneville 

 programs. 



We need creative incentives for all local utilities to become will- 

 ing business partners for conservation. That doesn't mean status 

 quo. It doesn't mean business as usual. It means experimentation, 

 pilot programs, and taking on a Uttle bit more risk. 



I might divert for a minute to mention the focus on reinventing 

 government that we're seeing at all levels in government across the 

 country. One tenet of reinventing is sometimes overlooked and that 

 is the need to accept some mistakes from time to time, the need 

 to accept a little bit more risk-taking. Sometimes many of the pro- 

 grams and the processes that we establish are to remove the risk 

 of some fault in some way. We need to accept a little bit more risk 

 to become more competitive. 



In addition to tiered rates, we also need to explore simplified, 

 long-term conservation contracts based on savings achieved, cost- 

 per-savings threshold, comprehensive conservation projects ofiiered 

 individually by utilities or utility consortiums, different payment 

 mechanisms, such as lost revenue recovery pa5niients. 



The second element of our strategy says to target programs and 

 activities on markets with the greatest conservation potential. 

 Today that market is the commercial industrial sector, particularly 

 in high-growth areas. Targeting markets with the greatest poten- 

 tial in a marketing sense does not simply mean capturing short- 

 term energy savings, however. 



We also need to design and run programs in those markets 

 where we can learn a lot more about conservation costs and sav- 

 ings, those market where we can apply promising technologies and 

 test workable financing and delivery schemes. Those markets also 

 help us identify new niches because targeting markets is a dynamic 

 process. It's not static. Market opportunities and niches change. 



I don't beUeve the stand£u*d, you might say, cookie-cutter ap- 

 proach that has worked quite well for residential programs is going 

 to apply to the new markets. We need custom-designed incentives 

 for Istrge commercial and industrial customers and targeted indus- 

 try programs. We need to look for technologies that save energy 

 and minimize waste at the seime time. 



The third element encourages Bonneville to build on a well- 

 known and highly valued strength, the ability to be a catalyst for 

 common coordinated regional actions. No other entity in the region 



