340 



You asked what I thought the weaknesses and strengths were of 

 the Bonneville acquisition system. I think Bonneville's shear size 

 is both its strength and its weakness. As I say, because of it's size 

 and because of it's need to centrally plan everything and it's lack 

 of accountability for that savings, you have a very large bureauc- 

 racy that is not receptive to any suggestions from the outside or 

 any local changes. 



Also, its very size also gives it the opportunity to run such inde- 

 pendent programs paralleled with the existing programs. There 

 are, as Mr. Hardy said, 100-plus different host utilities that it 

 serves. It cannot design the same program for each one. They have 

 different needs. The CARES program is an obvious response to that 

 t5^e of need. 



There should be the opportunity for these other utiHties to par- 

 ticipate in a performance-based program which is not designed and 

 overseen directly by the utility company; in this case, Bonneville 

 Power. 



Bonneville, unfortimately, has a habit of rejecting bad news, re- 

 jecting any criticisms that it has. We saw this very recently when 

 we questioned the cost-effectiveness of its residential programs and 

 its commitment to cost-effective conservation. 



In more than ten years, the U.S. Department of Energy's Oak 

 Ridge National Laboratories has conducted extensive evaluations of 

 Bonneville programs. What it has shown is that over the last ten 

 years, the savings on those programs have dropped from over 4,000 

 kilowatt hours down to about 1,500 kilowatt hours, about a third 

 of what it once was. 



In even more depth was when you looked at what happened after 

 the first year and what the studies showed is that year after year, 

 the first year savings dropped significantly. On average, they've 

 been dropping on an average of 12 percent for each year afterward, 

 a very significant deterioration, significantly calling into question 

 the savings numbers that we've seen that Bonneville has been 

 claiming for these things. 



We saw this morning a series of charts and bar graphs on what 

 the savings are. Those savings are still based upon an estimate of 

 2,800 kilowatt hours per house. What happened? After the Oak 

 Ridge study came out, Bonneville's internal central planners sent 

 a memo around sajdng we reject this particular analysis; we're 

 going to continue using 2,800 kilowatt hours. 



I have to tell you that Bonneville's programs have not reached 

 2,800 kilowatt hours per house since 1986. However, a new study 

 has just come out showing a different number. Instead of supplying 

 cost at around 83 mills per kilowatt hour, a new study by SRC is 

 now showing 78 mills per kilowatt hour, still far above the con- 

 servation level — ^the conservation cutoff. 



Of greater concern, though, is that Bonneville is falling back and 

 not pursuing the residential conservation field significantly. Yes, it 

 has treated severed hundred thousand houses, but it has over a 

 milhon residential customers out there. As of last year, Bonneville 

 had only treated 35 percent of its electric heat single-family mar- 

 ket, which represents only 40 percent of the total population. 



Eighty-five percent of the houses in the Bonneville region have 

 not been treated. That means that five out of six residences know 



