202 



Question 3: 



In practice, are there significant differences in the prcx^sses used by BPA to acquire 

 conservation, renewable and fossil resources? Are procedures, requirements, and 

 administrative demands essentially equivalent for equivalent resources? Are resource 

 acquisition costs and benefits appropriately shared? 



Answer 3: 



As BPA is not subject to the discipline of the market, it lacks a constant standard against 

 which to judge its actions. Therefore, BPA makes contradictory and economically 

 irrational decisions driven by short-term, non-economic and frequentiy shifting 

 considerations. This results in BPA applying significantly different standards and 

 requirements on different resource types, and sometimes on the same type of resource. 

 These inconsistent and unpredictable resource standards and requirements seriously 

 inhibit customer resource development and discourage customers from offering cost- 

 effective resources to BPA. 



For example, recenUy BPA was offered a geothermal project with an expected cost of 

 over 60 mils/kwh and a combustion turbine with an expected cost of about 35 mils/kwh. 

 BPA rejected the combustion turbine but pursued acquisition of the geothermal project. 

 Should ratepayers be asked to pay for research and development on unproven resources 



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