157 



ceiling." We were told not to worry about the additional potential, because the 

 Council would insist that any and all cost-effective savings be acquired. BPA foUowed 

 this commitment by promising that cost-effective conservation would not be budget- 

 constrained. Based on these promises, we were willing to accept the Council's very 

 conservative target. 



As anyone who has tried to deliver conservation to BPA can attest, that 

 promise is being systematically broken. In 1993, the more ambitious conservation- 

 oriented utilities had exhausted their BPA conservation budgets four months into the 

 fiscal year. In Seattle and Eugene, for example, customers are lined up outside the 

 utilities' doors waiting to deliver saved energy at costs well below the price of the 

 Tenaska project, but the doors are shut. BPA's recent conservation cuts guarantee 

 that this unacceptable situation will persist through Fiscal Years 1994 and 1995. 

 Earlier, when BPA asked each of its wholesale customers how much conservation 

 they could deliver, the sum of the customers' answers exceeded BPA's 660 megawatt 

 target. The customers were told to reduce their targets due to budget constraints. 

 As this hearing is being held, cost-effective conservation is being foregone. We will 

 have to pay more and incur more environmental damage to generate power that we 

 could have saved. 



Why is BPA falling so far behind? Are there flaws in its conservation and 

 resource acquisition program designs, as your third question suggests? Surely. Are 

 there problems in BPA's decision-making and contracting structures? Absolutely. But 

 the overwhelming problem, and the obstacle that directly contravenes the Regional 

 Act and Power Plan, is that BPA is pulling the financial rug out from under the 

 conservation providers, after promising repeatedly that cost-effective conservation 

 would not be budget-constrained. We can and should reexamine BPA's resource 

 acquisition methods. But no method will succeed unless and until BPA makes firm, 

 long-term financial agreements to purchase the conservation resource, as it would any 

 other resource. That is unlikely to happen unless the people who bear the costs of 

 failing to acquire conservation - the public and the people who represent them - hold 

 BPA accountable to its promise and its obligation under the Regional Act. 



What mechanisms do we have at our disposal to ensure that accountability? 

 That brings us to your second question, about Tenaska, and your sixth question, 

 regarding the Council's role. Later today, a few blocks away, the Council will take 

 testimony on how it should exercise its most important formal authority over resource 

 acquisitions: its review of BPA's nnajor resource acquisitions imder Section 6(c) of the 

 Act. The Council's action on Tenaska will provide a definitive answer to your sixth 

 question. In its review of the Tenaska project the Council could establish its firm 

 determination to see its Plan implemented. Or it could simply rubber stamp the 

 project. Some Council members have already stated publicly, while the record is still 

 open, that they plan to do the latter. 



We provide a somewhat more detailed explanation of the respects in which 

 Tenaska is inconsistent with the Plan in our comments to the Council, which we have 

 appended to this testimony. As Council staff freely admit, Tenaska is not the type of 

 resource that the Plan identifies for immediate acquisition. BPA's assessment of the 

 project's costs was almost unaffected by the enormous fuel-price risks, carbon risks. 



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



July 12, 1993 ^^8=^ 



74-346 0-93-6 



