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3a. In practice, are the.-e significant differences in the processes used by BPA to 

 acquire conservation, renewable, and fossil resources? 



Yes. Conservation is largely being achieved through broad-based incentive programs and 

 energy codes and standards; renewables through joint-venture demonstration projects and 

 competitive bids limited to renewable resources; and fossil-fuel generation through open, 

 solicited bids. 



Ultimately, Bonneville should seek the mix of acquisition processes and strategies that 

 best fit each resource. The only guideline should be this: use what works. For example, 

 ojjen, competitive bids have yielded significant numbers of proposals for natural gas-fired 

 ptower plants and cogeneration facilities. In contrast, open bids have yielded few 

 conservation proposals. Further, the U.S. utility experience with conservation bid 

 winners has been mixed. One pitfaU has been cream-skimming: contractors doing the 

 "easy" conservation and doing it badly. This is not to say that bidding for conservation 

 resources should not be an option, but that the bid procedures and criteria should be 

 geared to the resource. 



3b. Are procedures, requirements, and administrative demands essentially equivalent 

 for equivalent resources? 



Essentially yes. On exception is that we need to measure and verify the savings from 

 conservation projects. We can easily measure the output of a power plant; savings from 

 conservation projects is more difficult to identify. Too stringent, intrusive, or redtmdant 

 verification schemes can undermine conservation efforts by lowering participation in 

 programs or by adding considerably to the cost of conservation. For example, a recent 

 contract the Oregon E>epartment of Energy signed with Bonneville for a proposed lO-ye.ar 

 schools and government electricity conservation program says each party wiU audit buildings 

 to verify that measures were installed and are operating. While electricity savings should 

 be verified, we believe the methods should vary by program and measure, and over time. 



Another exception is that generation facilities get long-term contractual commitments. 

 In contrast, for example, the Oregon Department of Energy /Boimeville schools and 

 government contract must be renewed each year. We believe this program and other 

 like comprehensive conservation programs deserve the same long-term commitments 

 enjoyed by generation projects. 



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