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rates, the utilities could do conservation programs independently without BPA's 

 interference. 



Question 2: 



Should BPA proceed with the proposed contract for the output of the Tenaska natural gas 

 combustion turbine? If so, why? If not, why not? BPA has agreed to maintain the 

 confidentiality of certain escalator clauses in the proposed Tenasla contract. Was this 

 confidentiality agreement appropriate? 



Because of the confidentiality of certain escalator clauses, there is disagreement regarding 

 the long-term costs of the power from the Tenaska project. Please give your assessment 

 of these long-term costs. 



Answer 2: 



We have very little first hand knowledge of the Tenaska project. Representing the 

 customers who will ultimately pay for the project, we are deeply concerned about not 

 knowing the provisions of the price escalators in the fuel contract and the closed bidding 

 process. With fuel related costs making up nearly three-fourths of the total project costs, 

 we believe this confidentiality clause violates good public policy. 



Additionally, it appears by funding this project, BPA will not be willing and/or able to 

 acquire some cost-effective conservation and will avoid considering fuel choice issues. 



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