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negotiations were overseen by low level BPA representatives, with never 

 even one hour of attendance by any of senior management. But Mr. Hardy 

 and Ms. Hickey and others have been actively involved in the Tenaska 

 review and discussions. We have begged for only an hour of Mr. Hardy's 

 time, or Ms. Mickey's, or Mr. Auburg's, or Mr Elizalde's, or the Acquisition 

 Management Team's or the Leadership Team's and have been repeatedly 

 rejected. I am sure that were we offering to invest $230 million in a 

 generation project instead of conservation, we would not have received this 

 kind of treatment. 



BPA has more complicated and contradictory positions about conservation 

 than about generation. For example, BPA seeks to micro-manage every 

 aspect of conservation resources, and when this is not feasible, it claims 

 that the conservation resource is unacceptable. However, for a generating 

 resource, it pays based upon the results measured (kWh), without a 

 requirement that it precisely match the procedures used by Bonneville for 

 all of its generation or that Bonneville use the same technology for its own 

 generation programs. Although performance-based conservation was the 

 theoretical goal of the BPA competitive bid, when it came time to negotiate 

 a contract, we were repeatedly forced to accede to implementation 

 limitations that were not performance based at all. 



To date, BPA has been a very poor purchaser of conservation resources 

 through indirect means such as third party financing, billing credits, 

 ESCOs, etc. While we might accept some problems may be caused by 

 bidders or other parties, it is strange that despite all of the assurances that 

 BPA supports this activity, no contracts with private sector companies have 

 been completed or implemented with Bonneville. 



Because BPA does not have accountability for its own conservation 

 programs, it finds it difficult to require this of others. Right now, BPA's 

 residential weatherization program pays 100% of the costs today for the 

 promise of benefits in future years, whether or not the savings actually 

 occur. Why should people want to try to change this? As a comparison, 

 the Tenaska station gets paid each year for 20 years based upon the 

 measured output for each year. Or you could give it a choice of getting all 

 of its $2+ billion up front without being accountable for any lack of 

 generation in future years. It sounds silly but this is the option that BPA is 

 offering its utilities under its third-party financing and conservation power 

 plant performance rules. BPA has rejected performance-based offers, 

 such as that of Snohomish PUD. 



We praise the Northwest Power Planning Council's role in setting the tone 

 and moral authority for the pursuit of cost-effective conservation. In the 

 three years we have been active in this part of the country, we have been 



TESTIMONY OF RICHARD ESTEVES Page 19 



