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growth, Columbia/SnaOce River constraints and thermal plant 

 closures, PNGC decided to pursue a long-term output sale of its 

 share of Boardman once more. PNGC participated in BPA's 

 acquisition process during which BPA established unique externality 

 costs for an existing, operative coal plant. BPA ultimately had to 

 remove the externality charges as inappropriate. Bonneville Power 

 Administration never purchased PNGC's 10 percent share of Boardman. 

 Txirlock Irrigation is purchasing 52 MW for the next 20 years for a 

 power cost under 30 mills/kwh real levelized. By the time BPA 

 thought they would be interested in Boardman, they could not close 

 or commit to close the deal in less than two years. The Northwest 

 needs new resources but allowed 52 MW from an operating Oregon coal 

 plant to go to California. 



Umatilla has been involved with two co-gen plants (400 MW each) 

 whose first effort was to secure a power sales contract with BPA. 

 Both plants were priced under 28 mills real levelized and both have 

 withdrawn from BPA's process. One plant is being built to replace 

 part of the Trojan Nuclear Plant. The other plant is dealing with 

 other utilities rather than become enmeshed in BPA's long, 

 convoluted acquisition process. 



The extensive discussion of tiered rates taking place in the 

 Pacific Northwest is driven by concerns of how conservation 

 resources and generating resources are acquired by BPA. It is 

 troxibling that rather than meOcing BPA's acquisition process work 

 effectively, a tiered rates surrogate is being accepted. It is one 

 process to look at power needs and determine the best way to meet 

 those needs. It is quite another process to decide on the solution 

 then figure out how to make it work. "Tiered Rates" is following 

 the latter process. How are these problems to be fixed? BPA must 

 know the total cost to acquire a resource; must leave the social 

 engineering to their customers; must buy the lowest cost resource 

 based on actual delivered energy and must put people in charge able 

 to make decisions with a proven ability to bring new resources on 

 line successfully. 



It has been proposed by some that BPA should be paying end users to 

 convert from electricity for space and water heating to using 

 natural gas. Some claim hundreds of megawatts could be saved by 

 fuel switching. I've attended hearings before the Northwest Power 

 Planning and Conservation Council where natural gas company 

 executives deplore the use of natural gas for generation of 

 electricity when it could be applied directly by the end user for 

 more efficiency. Umatilla Electric believes in and promotes the 

 efficient use of electricity. Our members long-term energy needs 

 are best served when they use energy efficiently. We have been 

 involved in fuel switching for the past 20 years without any 

 assistance from BPA, natural gas companies or congress. Natural 

 gas and oil were the first fuels for the steam boilers used by food 

 processors served by Umatilla Electric. By 1975 these food 

 processors had electric steam boilers because electricity was less 



