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example, as a close observer of the "conservation power plant" 



negotiations between BPA and the Snohomish PUD, I think both sides 



missed repeated opportunities to make a deal that was clearly in 



the best interests of all concerned. They should try again. 



I know from abundant personal experience that BPA is capable 



of world-class conservation resource acquisition. Both BPA and its 



customers need to feel strong even-handed pressure from Congress to 



do better in the future. All sides should take heart from an 



aggressive internal review process now underway within BPA, driven 



in part by competitive pressures; these efforts could yield a much 



more effective delivery system. 



5 . What is the potential for cost-effective electricity savings in 

 the Northwest region from fuel switching to natural gas? Do 

 current market conditions create a sufficient incentive for fuel 

 switching? If not, what measures should BPA undertake to encourage 

 fuel switching? Should BPA prohibit the expenditure of Super Good 

 Cents incentives in areas where natural gas service is currently 

 available? 



I can only answer this question qualitatively; NRDC has not 

 undertaken an independent estimate of the potential for cost- 

 effective fuel substitution. I believe that there are substantial 

 untapped opportunities to save both energy and dollars by 

 substituting high-efficiency natural gas equipment for electrical 

 systems, and vice versa. 



Current market conditions will not necessarily capture those 

 opportunities. Natural gas use is up sharply throughout the region 

 — about 75 percent over the last decade — but many of the same 

 market barriers that block cost-effective conservation also 

 obstruct cost-reducing fuel substitutions, particularly in older 

 structures." Utilities like Washington Water Power and Snohomish 

 PUD have been leaders in promoting natural-gas measures that save 

 on both resource acquisition costs and customers' bills. 



I have seen dramatic changes in attitudes at BPA on fuel 

 substitution over the last several years. I believe that the 



"Data on natural gas consumption trends are summarized in 

 Clearing Up . June 28, 1993, at p. 4. 



