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load growth in the region is uncoupled from the question of adequate planning oversight. 

 The one key point to remember is that BPA does not have to pay for new conservation 

 or generation resources to ensure a good regional result. In fact, in the new competitive 

 environment, BPA should probably pay very little. There are no new resources of 

 Federal importance involved, and there appear to be no compelling reasons remaining 

 for BPA to play a significant funding role in the load growth market in the future. 



There is no need to continue kick-starting regional conservation programs by 

 having BPA pay large incentives to utilities. There is already more demand, than 

 funding foi existing programs. In addition, the benefaaors of conservation programs 

 tend to be the end use consumer and the utility providing electricity to that consumer. 

 Consequently, consumers and utihties should pick up the bulk of the cost of the 

 conservation programs. This would meet one of the fundamental economic efficiency 

 rules: the closer the connection between the person that benefits and the person that 

 pays, the more efficient will be the economic result. Spreading conservation and large 

 resoiu-ce acquisition costs across the BPA rate base tends to defeat this economic tenet 

 and wiU lead to inefficient results. The implementation of tiered rates may be an 

 effective solution to this problem. 



CONCLUSION 



Given the rapidly changing utility environment, market forces need to be relied 

 upon to the maximiun extent possible to insure wise decisions are made. We need to 

 give BPA an opportunity to compete on the margin with other entities for the provision 

 of energy efficiency programs and the output of new generation resources. It is 

 imponant, however, that this competition occur on a level playing field, without masking 

 the costs to potential purchasers of those acquisitions. Under these competitive 

 conditions, it is likely that BPA will have a modest role in meeting the region's load 

 growth needs. 



The Northwest Power Plaiming Council will also need to change their approach to 

 plaiming. The Council can have a role in the Pacific Northwest's energy picture in the 

 fumre, but it will be one of leading the region's utihties and decisionmakers towards 

 recognizing the benefits of the decentralized marketplace. Their role will transition fi-om 

 a quasi-regulator, to a role of insuring the region's regulatory bottlenecks are removed 

 which interfere with a business-like environment. 



Finally, the future ought to be exciting. The changes imdenvay will lead to a 

 better allocation of scarce resources, more affordable products, and a leaner, 

 competitive BPA. 



d:\john\taatijBny.93 



