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3 . In practice, are there significant differences in the processes 

 used by BPA to acquire conservation. renewable and fossil 

 resources? Are procedures. requirements, and administrative 

 demands essentially equivalent for equivalent resources? Are 

 resource acquisition costs and benefits appropriately shared? 



I have several major concerns about the procurement process. 

 The first goes to the treatment of environmental costs and 

 uncertainties in resource procurement, which gives fossil resources 

 an inappropriate advantage over renewables and conservation; item 

 7 below expands on this point. 



Also troubling is the disparity in BPA's willingness to make 

 multi-year commitments across resource categories. A Tenaska-type 

 generating resource can get contractual assurances that may stretch 

 literally for decades; most conservation resources struggle along 

 on a year-to-year basis. Congress should insist on evidence of 

 more symmetrical treatment; we need more durable BPA commitments in 

 order to build a strong conservation infrastructure. 



For conservation, BPA also has been handicapped by customers' 

 pressures to spread investments evenly around the region, 

 regardless of the distribution of cost-effective opportunities to 

 save energy. The Regional Act treats conservation as a resource 

 for the region, not a regional social program. Customers need to 

 be reminded that there are no "nonparticipants" in the systemwide 

 benefits flowing from cost-effective savings, regardless of their 

 source. 



Also, some utilities have insisted inappropriately on BPA 



reimbursement for "lost revenues" associated with kilowatt-hours 



saved in their service territories, which leaves the region paying 



not only for the cost of the energy savings but also for the 



hypothetical retail mark-up that the unsold kilowatt-hours would 



have earned for local utilities. The Regional Act was never 



intended as a guarantor of utilities' balance sheets, particularly 



when the revenues at stake are based on wasted energy. 



4 . Is BPA an effective indirect purchaser of regional resources 

 through third-party financing, billing credits, conservation power 

 plants and other indirect means? 



Not yet, although the fault does not lie solely in BPA. For 



