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3. Focus on Bonneville strengths, with its main role as a catalyst for achieving 

 low-cost conservation, and 



4. Focus resource acquisition policies, programs, and services on the needs of 

 end-user customers. 



Back to our first element To achieve customer conservation, we need to let market 

 forces work as efficiently as possible. Tiered power rates - rates that better reflect the 

 fiill costs of new supply - will be a significant tool for encouraging efficiency. We 

 strongly endorse Bonneville's commitment to establishing tiered rates and we likewise 

 encourage customer-owned utilities to test such pricing mechanisms. 



Tiered rates remove one disincentive to local utilities to help their customers invest in 

 saving electricity. But removing this obstacle is not enough. 



Other barriers exist: some utilities serve slow-growth or no-growth areas and fear rapid 

 price hikes if loads drop as a result of conservation incentives. Still other utilities lack 

 the fiinancial and technical resources to fund or operate fuU-scale conservation projects. 

 And many local utilities can't take on the administrative burdens imposed by Bonneville 

 programs. 



We need creative incentives for all local utilities to become willing business partners for 

 conservation. This doesn't mean status quo or business as usual. It means 

 experimentation, pilot programs, and taking on a little more risk. 



In the midst of a national effort to reinvent public agencies, we must remember that a 

 basic tenet of reinventing is to encourage experimentation and accept some mistakes in 

 the process. The standard approach may be safe in the short run and predictable. But 

 the status quo cannot deliver the results we need. 



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



simplified long-term conservation contracts, based on savings achieved and a 

 cost per savings threshold. 



comprehensive conservation projects offered individually by utilities or by 

 utility consortiums. 



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