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The majority of the Washington PUDs' service territories are located in 

 econonucally distressed areas of the state. The majority of these PUDs are small to 

 medium size. Resource development in these areas can provide a much needed 

 boost to local economies. A number of studies (by University of Oregon/EWEB and 

 B.C. Hydro, for example) have demonstrated that when utilities develop 

 conservation in their own service areas instead of developing remote central station 

 generating plants, their communities derive economic benefits while avoiding 

 environmental and siting problems. 



3 Loss of support for BPA and its Conservation Programs. 



When small and medium size utilities are unable to participate in BPA 

 conservation programs, they may fail to support — and may even oppose — these 

 programs. This should come as no surprise, since the utilities and customers who 

 are most in need of assistance would be paying for programs developed elsewhere. 



This loss of support for BPA conservation programs could lead to loss of 

 political support for BPA. 



Benefits of Participation by Small and Mediixm Size PUDs and Cities 



Widespread participation by small and medium size Washington PUDs in resource 

 acquisition through CARES and similar organizations will provide many benefits 

 for the region. Development of conservation resources by individual retail utilities 

 and consortiums helps insure the viability of conservation as a resource. Most 

 conservation results from energy efficiency improvements in end-use customer 

 facilities. Attempts by either power marketing agencies or non-utility private sector 

 service providers to develop /acquire such resources directly, without local utility 

 participation, can not be as effective as those which directly involve the local utility. 

 The local retail utility has an existing contractual relationship with the end-use 

 customer, has valuable load information about the customer, and has a permanence 

 in the local community that allows ongoing oversight for projects. 



Other benefits of participation include: 



1. Development of new demand-side and supply-side resources; 



2. Fostering of economic development in distressed rural areas; 



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