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conservation matkets are larger scaled, and more interactive than residential progfTons. 

 The key to acquiring substantial energ/ savings in the non-residential sectors is timing 

 If funding for these projects is not available at the time that industry is ready to 

 undertake retrofits, it is likely the opportunity wUl be lost 



1(c): We generally agree that Bonneville is "on track" to acquire its "share" of the 

 region's targeted level of cost-effective conservation Accordingto the 1992 Resource 

 Plan, Bonneville expects savings to continue accruing and has budgeted $600 million to 

 acquire another 150 aMWfor the budget years 1 993-95, with a total acquisition target of 



680 aMW by 2003. 



1 (d): After encouraging utilities to rapidly accelerate their efficiency programs, 

 Bonneville is now in a position of near-term budget constraints. We believe that if the 

 region's utilities continue to depend on Bonneville for full funding of conservation 

 programs, budget cuts in the near-term wUl significantly compromise the ability of the 

 region to achieve its acquisition goals. 



A major conservation acquisition program requires a steady, long-term commitment of 

 both staff and budgets The concept that energy conservation is a resource Hke any 

 genera ting power plant was first introduced by the North west Power Act Treating 

 conservation as a "one-time" program, as Bonneville currently does, exposes it to the risk 

 of budget cuts which translate to uncertainty in the regional planning mechanisms of its 

 utility customers. The problem shifts from one of achievable conservation targets to one 

 of uncertainty and risk 



The obvious risk of not achieving the conservation targets is that more generating 

 resources wHlhave to be acquired Aissuming medium-high loads as does the 1991 Power 

 Plan, any reduction of achievable levels of conservation moves aU other resources forward 

 in time. Accordingto the 1991 Power Plan, by 2010 the amount of coal gasification 

 power plant energ/ wHl have increased to 1^00 megawatts which makes up for most of 

 the reduced conservation savings. In this scenario, not only are the replacement 

 resources much more expensive than conservation, but are, in many cases, more difficult 

 to obtain and subject to much more problematic uncertainties such as environment, 

 siting and public acceptance. 



Q.2. Energy services companies such as yours are major participants in the 

 energy efficiency field in certain areas of the country but have played a lesser 

 role in the Pacific Northwest Region. 



(a) Why is this the case? 



(b) What role could energy services companies play in providing 

 efficiency savings to BPA and its customers? 



A 2(a) The primary reason for the relative success of companies like ours in other parts 

 of the country is due to the fact that the rest of the country pays substantially more for 

 electricity. Hi^er prices simply mean more conservation is economical under more 



