301 



PacifiCorp, EWEB, Idaho Power and Tri-State G&T owning the project and selling a portion 

 of its output to BPA and retaining the majority of power for their own use. This is truly a 

 private/public partnership with the involvement of a private U.S. developer, several lOUs, a 

 large municipal utility (EWEB) and a federal power marketing agency (BPA). We commend 

 BPA on their decision to proceed in this unique partnership which will pave the way for 

 significant future windpower development in the northwest. Negotiations to complete this 

 project are ongoing and expected to be completed in the coming months. The project is 

 scheduled to be operational by January 1, 1996. 



All utilities involved in these wind projects in the region are to be praised for making the 

 decision to aggressively pursue renewable energy. It is also noteworthy that the company will 

 soon be opening a Portland office to better serve the Pacific Northwest. U.S. Windpower is 

 committed to making wind energy a generally accepted utility generation technology. It is with 

 this background in mind that we would like to respond to the questions provided by the 

 committee. 



What are BPA's strengths and weaknesses in the resource acquisition field? 



BPA is to be commended for undertaking their 50 MW wind-only solicitation. This is the 

 largest wind solicitation undertaken by one entity so far in the Pacific Northwest. We appreciate 

 BPA's lead in pioneering wind technology in the region. 



Although we appreciate BPA's move into wind energy, we are concerned that the acquisition 

 process is not as effective as it might be. I'll set forth our views on how it might be improved. 



Our overall view is that BPA is not acquiring all available cost-effective renewable resources. 

 If recent history has taught us anything, it is that price and availability of electrical generation 

 can and will vary sometimes dramatically over short periods of time. We need only to look at 

 nuclear power which was at one time thought to be "too cheap to meter." Or to look at the 

 variablility of BPA's hydro-electric electricity production which has been subject to considerable 

 variation due to lower than normal rainfall and environmental demands. 



Because of the potential for price and supply variation of all electrical generation over time, it 

 is prudent for BPA to adopt a "portfolio" approach to resource acquisition in which a range' of 

 cost-effective generation technologies are acquired. This is a risk mitigation strategy which 

 requires identifying and quantifying potential risks and incorporating them into the resource 

 acquisition decision making process. 



BPA has begun resource diversity in their recent solicitations. However, it appears they are 

 relying too heavily on fossil technologies and not balancing their supply with enough cost 

 effective renewables such as wind. 



We say this because we don't believe enough consideration has been given to the risk factors 

 associated with each technology. In a recent, open BPA solicitation, wind energy was only 3 



