265 



BPA rates are beginning what appears to be a dramatic expo- 

 nential increase and we believe BPA rates could easily soon exceed 

 the wholesale rates of the investor-owned utihties. This is not what 

 we consider an economical supply. 



The Act intended that conservation and renewables be evaluated 

 honestly against conventional resources and used as a tool to 

 achieve a truly low rate power supply. It appears BPA and the 

 Council have manipulated the numbers to allow pursuing conserva- 

 tion and renewables at exceptionally high actual costs. 



To dehver BPA power to consumers at the lowest rates, three or- 

 ganizations must coordinate and cooperate such that together they 

 look Uke one well run integrated utility system. We observe this is 

 not happening. The distribution utihty, BPA, and the Council are 

 not coordinating and cooperating to create the necessary results. 



Why is the Act failing to provide the desired and intended re- 

 sults? We suggest at least five reasons. First, the Act has been mis- 

 interpreted, particularly with regard to the determination of cost- 

 effectiveness. Secondly, the Coimcil is encroaching on BPA's imple- 

 mentation responsibihty, causing substantial duplication, confusion 

 and excessive costs. 



Third, the Council and BPA have lost sight of the stated purpose 

 of the Act regarding adequacy of supply and economical supply. 

 Fourth, there is an apparent conflict in the Act regarding the defi- 

 nition of resources, rate impacts, and resulting cost-effectiveness. 

 As a result, the conservation resources causes much higher rate in- 

 creases than does generation in the same amount. My written testi- 

 mony elaborates on this. 



If the Act separates the planning and implementation fiinctions, 

 this defies prudent business practices. Even when such fiinctions 

 are both under one organization, obtaining close coordination is 

 sometimes difficult, but is necessary for a successful result. 



BPA has several observed strengths and weaknesses related to 

 resource acquisition. The strengths include having an estabhshed 

 business relationship with regional utilities; the ability to acquire 

 larger resources to gain economy of scale; ability to integrate var- 

 ious resources, including non-dispatchable conservation and inter- 

 mittent renewables, such as wind and solar; and, BPA has a num- 

 ber of very well quahfied and knowledgeable people. 



BPA's weaknesses include placing too much emphasis on elabo- 

 rate processes; lack of experience in resource acquisition; they've 

 been on the learning curve; and, too much emphasis on assuring 

 punitive environmental externalities to proposed resources, espe- 

 cially currently operating projects. 



The near-term budget cuts by BPA are long overdue. They 

 should not prevent BPA's acquisition of the targeted amount of con- 

 servation. BPA could be more efficient and effective if it returned 

 to a management structure where individuals take more respon- 

 sibility for making decisions and getting things done. Use of com- 

 mittees, groups, task forces, and such are not usually very efficient. 

 The Council's two major strengths in resource acquisition are its 

 legal authority to develop a regional power plan with full pubhc in- 

 volvement and its ability to represent the Northwest Governors in 

 influencing the regional economy through the electric power supply 

 that they've planned, both in adequacy and in cost. 



