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Mils higher than gas-fired cogeneration. If the potential for gas price increases and/or energ) 

 and/or pollution taxes were taken into account, that 3 Mils might quickly be erased and wind 

 energy, with no fuel cost and no exposure to future fuel escalation, would be BPA's lowest cost 

 resource. 



In fairness to BPA, they did attempt to add an externalities value in their original open 

 solicitation. The original request for bids allowed an externalities adder of 3 to 5 Mils for 

 natural gas and 10 to 15 Mils for coal in "scoring" that solicitation. However, before the bids 

 were due the externalities adders were withdrawn and replaced by a token adder of 1 Mil. We 

 understand that the Department of Energy acting under orders of the previous administration 

 instructed BPA to remove the externalities from the bid. We congratulate BPA for attempting 

 to reflect the true cost of power in their bid and regret the short-sightedness of the former 

 administration. We pledge to give BPA any political help we can to make sure they are able 

 to make the right choices in future solicitations. 



BPA also attempted to pass the risk of future energy taxes on to project developers. Lending 

 institutions were unwilling to finance a project with this risk and BPA had to assume the major 

 share of this tax risk. It is noteworthy that this risk was not taken into account when evaluating 

 wind energy in the open bid process. We believe BPA should undertake an integrated resource 

 planning process which thoroughly examines environmental externalities. Realistic values should 

 be calculated for these externalities and applied to the resource acquisition process. Since BPA 

 is a federal agency, particular attention should be paid to COj reduction since President Clinton 

 has committed the nation to the goal of obtaining 1990 COj levels by the year 2000. We would 

 emphatically recommend that a more realistic risk factor or "externality" be used in evaluating 

 future solicitations to mitigate risk. 



The recent BPA wind solicitation surpasses the 30 MW demonstration project called for in the 

 Northwest Power Planning Council's (NWPPC) plan by the year 2000. While this is 

 commendable, the NWPPC plan is out of date because it fails to recognize that the price of wind 

 energy has come down 30% since its plan was developed. The NWPPC plan was developed 

 using prices of 7-lOC/kWh as the cost of wind energy. At its current pricing of 5C/kWh (or 

 less if the 1.5C production incentive in the Energy Policy Act of 1992 can be utilized), wind is 

 quite cost effective. We hope the NWPPC will update their plan using current pricing and 

 increase the role of wind energy in that plan. 



Currently, the market is outperforming the NWPPC plan. Several utilities in the Northwest have 

 realized the value of wind energy in their energy mix. Puget Power and Light, PacifiCorp, 

 Portland General Electric and Idaho Power have joined together to own a 50 MW wind project 

 in the area. Portland General Electric is currently requesting bids for wind projects. 

 PacifiCorp, Idaho Power and Eugene Water and Electric (EWEB) are pleased to be currenUy 

 negotiating with BPA as one of the low bidders in the wind only bid. These investor-owned 

 utilities and EWEB are demonstrating leadership in renewables in their industry. 



