171 



3) QUANTIFY THE POTE>mAL SAVINGS FROM FUEL SWITCHING: 

 The Counn] is currently smdying fuei choice, and the Council a uniquely 

 suited to quantifymg the potential savings from conversion of existing 

 homes lo gas, and directiiig new construction to gas. My study for ANGU 

 remains the only study to date which attempted to identify where in the 

 NPPC resotirce stack fuel conversions would falL 



4) QUANTIFY THE PEL\K. DEMAND SAVINGS FROM FUEL SWITCHINa: 



The NPPC has not yet attempted to quantify pealc demand savings of any 

 of the demand-side energy resources they have evaluated. Peak savings 

 are increasing valuable in the Pacific Northwest, and should be quantified. 



WHAT CAN THE CONGRESS DO? 



There are a few steps which could be taken by the Congress to encourage cost- 

 effective &iel choice m the fadfic Northwest: 



1) DEFINE FUEL CHOICE AS A RESOURCE: The An could be amended 

 OT ntherwise clarified to specifically identify dlrea appUcuion of natural 

 gas as a "resource of high fuel conversion efficiency. " This could logically 

 he done by simply removing the word "generatiiig" from the descripticm of 

 Category 3 resoiux«s. Direa application of gas should not be considered 

 "conservation" or a "renewable resource" as Priority 1 and Priority 2 of the 

 Ac define them. 



2) PRESERVE THE HOUSE-PASSED APPROACH TO THE ENERGY TAX: 



The House-passed BTU tax assesses hydropower at die average value of 

 i:ew electric generating resotuces. This was a compromise below the level 

 originally proposed by the Presidem. Several Northwest utilities have 

 advocated having the BTU tax applied at a lower rate to hydropower. 

 Without entering the debate over whether the non-thennal, renewable 

 naiure of hydropower justifies special tax treatment, the effect of special 

 treatment for hydropower would be to discourage economic fuel choice. 

 This is because more tViari half the electricity in the region is hydro, and 

 favorable treatment wiU hold down the regional cost of electricity, but all 

 gas will be subjected to the BTU tax. If hydropower is not taxed ai the 

 SAOS rate as thermal generation, the eSea will be to increase the price of 

 narural gas space and water heat relative to gas space and water heat. 



3) IMPLEMENT THE W80 BUILDING ENERGY PERFORMANCE 



STANDARDS (BEPS): In the 1978 Naaonal Energy Act, the Congress 

 directed the Department of Ener^ to implement a nationwide efSdency 

 code for new construction. The standards were developed in 1980, but 

 never inqilemented. The BEPS properly recognized that direct application 

 of gas was a more efSdent way to heat buildings than electric heat. T he 

 building codes for all four northwest states are weaker than the 1980 BEPS 

 for asv elecirically-heated construction. 



Testimony of Jia Lazar Committee on Small Business 



June 3, 1593 ^"^^ ^ 



