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For some, "competitiveness" simply means minimizing today's rates. But any 

 BPA reform proposal worthy of serious consideration must have as its primary goal 

 the long-run economic and environmental well-being of the region. It must minimize 

 the total costs of operating an efficient, environmentally responsible power system in 

 the broad public interest 



Second, if we do succeed in developing a new and better regional resource 

 acquisition model, we will spend a considerable amount of time doing so. Legislative 

 change may be necessary. In the mean time, we still need to develop new energy 

 resources and manage the existing system responsibly. We cannot begin dismantling 

 BPA's resource acquisition apparatus unless and until we have a superior 

 replacement. For instance, BPA has proposed adopting a tiered rate structure and 

 reducing its conservation budgets as a less cosUy way to deliver conservation. In the 

 recentiy completed rate case, BPA cut conservation budgets and promised only to 

 consider tiered rates. In effect, they began to dismantle the old system well in 

 advance of constructing a new one. The conservation budget cuts saved less than 

 two hundredths of a cent per kilowatt hour, while imposing enormous long-temi 

 costs by undermining the momentum of the regional energy efficiency campaign. This 

 is not constructive reform. It is short-run rate-minimization. It is, in Q)uncil member 

 Ted Bottiger's words, "an example of having future generations pay for the lack of their 

 parents willingness to do so." As you consider alternative resource acquisition 

 mechanisms, we urge you to resist this short-sighted approach, and to continue to 

 support and improve the existing system until something better is in place. 



Witii that as background, we would like to briefly address your first and third 

 questions, concenung BPA's current resource acquisition efforts. 



First, you asked whether is BPA is on track to meet the Council's conservation 

 and renewable resource goals. In answering, we want to urge you to focus on the 

 Council's actual goal, not BPA's interpretation of the goal. The Council's goal is to 

 acquire all cost-effective conservation. This goal is simple common sense; it says 

 that whenever it is cheaper to save a kilowatt hour than to make a new one, we save 

 it. The Council's ten-year conservation target is a conservative one. It amounts to 

 approximately 8% of total regional electric consumption. During the development of 

 the Plan, we presented evidence suggesting that twice that much conservation 

 (approximately 16% of current consumption) was available and cost-effective. 

 Compared to many other experts, even our estimate was conservative. 



The Electric Power Research Institute, the utilities' own research arm, has 

 estimated that approximately a third of our electric consumption (or four times the 

 Council's target) could be saved cost-effectively. The Rocky Mountain Institute, 

 widely regarded as the world's leading efficiency expert, estimates that 75% of current 

 consumption could be saved. All of these estimates assume no reduction in the 

 quality or quantity of energy services provided, just a dramatic reduction in the amount 

 of energy used to deliver those services. 



Acknowledging the conservatism of its own estimates, the Council took great 

 pains to note that the 1500 megawatt figure was to be interpreted as "a target, not a 



Testimony of K.C. Golden, NCAC BPA Task Force 



July 12, 1993 ^^^ 



