169 



tba./j&ar of CO, To Provide Space/Water Heating to One Home 



Direa Application of Natural Gas: 7,080 



High-ESdency Cogeneranon: 7,682 



Cambincd Cydc Generation: 8i563 



CoaJ G«neTation: 14,948 



The construction of renewable resources will not affect the environmental impact 

 of conversion of electric space and water heat to gas, jicce the incremental fuel for the 

 west coast will remain a fossil-fired resource, if the Northwest were to develop 

 luffidcat wind, geo therm aJ, aiul solar resources to serve all load gcowth, we would sifll 

 be in a positioc to export power to California and displace fossil-fuel generating plants. 



WHAT CAN BPA do? 



The Bonrrville Power Administration is in a position to encourage more efficient 

 fuel choice, where it is economic, in many ways. To date, BPA lias been timid. One 

 concern is that fuel conversions may not be a "resource" under the Pacific Northwest 

 Electric Power Planning and Conservation Acl I behcvc that there are many rHngi? 

 winch BPA cac do immediately, under its mnVing authorities, to encourage more 

 cfBdcnt fuel choice: 



1) PUHSUE FUEL CONVERSIONS BEFORE GAS-HRED GENERATION: 



BPA is airreaily aggressively pursuing acquisition of gas-flred gcncraring 

 resources from Bingen Lund>er and from Tenaslca 11. These arc less 

 ef&dent and less economic than hiel conversions, and should be given 

 lower priority. 



2) RATE DESIGN: A decade ago, NCAC ai.- NPPC urged BPA to 

 inolemcnt implement tiered wholesale rate designs which encouiajjc 

 Gistomcr utilities act to place H^manHt on BPA unless the inaeniental 

 power is valued at the cost of new generatioiL BPA has just begun efforts 

 in this direction. 



3) BILLING CREDITS: BPA is required to offer billing credits to utilities 

 which implement retail rate desi^ which encourage cotocrvjitiou and the 

 uutallauon of renewable resources. These same rate designs may also 

 encourage direct appKcation of natural gas. BPA has refused to pay billing 

 credits for savings which result from rate design induced fuel switching. 



4) RESTRUCTURE LOW-DENSITY DISCOUNT: BPA offers a low-density" 

 discount to rural utilities, 'llhs was intended by the Aa to ofEsct the high 

 distribution costs of rural utilities. BPA does so by discounting the 

 tQowan-hours it sells to these utihtics. The result is that these utilities — 

 winch often serve some urbanized areas with gas service - have lower 

 rates per Irilnwalt-hour than the utilities serving the urban centers. If BPA 

 itistead provided a direa acdit against distribution costs, but priced the 



Testimony of Jim T jTar Committee on Small Business 



June 3, 1993 Page 4 



