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necessary to protect the bidders by keeping certain cost information confidential. It is common 

 practice — I am unaware of any successful utility that would do it otherwise. There is no reason to 

 believe that BPA will not make the best deal possible or to believe the Council can bring off a better 

 deal by having all of the information it is seeking. The Council has injected itself into the BPA 

 negotiation of trust agreements for wildlife mitigation at a tremendous additional cost to the BPA 

 ratepayer. We suggest the Council refrain from injecting itself into BPA's negotiations for resources. 



Fuel Switching 



Fuel switching by defmition is not "conservation." The Act does not encourage fuel switching. Fuel 

 switching is "curtailment" of electricity use. Fuel switching should be a consumer decision ~ not 

 something mandated by a central planner. 



Fuel switching is also often inappropriate when it comes to saving energy of all forms. For example, 

 it takes less BTU's of energy to generate electricity with gas and electrically heat a home with a 

 ground source heat pump than it does to heat the home directly with gas. 



Economically, in rural areas the total cost of providing a gas and electric distribution system far 

 outweighs the fuel cost advantage for gas at this time. 



BPA and the Council should not take actions to subsidize consumers to encourage fuel switching. If 

 an individual local utility chooses to do so, that is fme, but market conditions generally will lead 

 consumers to the best choice for them. In other words, let the market handle it. 



With regard to incentives, BPA should not discriminate against consumers who live where gas is 

 available by prohibiting incentives for Super Good Cents home building. As mentioned earlier, a 

 Super Good Cents home with a ground source heat pump is using less energy than a home heated by 

 gas. 



Environmental Externalities 



BPA has gone well beyond the requirements of the Act to include "quantifiable" environmental costs 

 in the "system cost" of a resource. As a result, the cost of fossil-fueled plants are artificially inflated 

 driving the cost of the Region's electric power supply up dramatically. BPA has even applied the 

 environmental externalities to coal plants currently in operation such as Boardman and those owned 

 by Basin Electric Cooperative. These plants are going to operate whether BPA purchases from them 

 or not. As a result, these low cost resources are being used in California and in the Midwest when 

 they could be benefiting the Northwest at no incremental environmental cost and substantially less 

 dollar cost. 



BPA even proposed to assess an unsupported environmental externality cost to carbon dioxide which 

 is not a designated pollutant. Fortimately, the DOE vetoed that extreme idea. 



