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I can guarantee you every elected commissioner, like myself, will 

 follow the least-cost path. Two years ago, we proposed an ambitious 

 conservation plan to BPA. We called it a conservation power plant 

 or CPP. 



Our proposal was designed to conserve resources; not just elec- 

 tricity, but natural gas and money, as well. CPP was simple and 

 easy to administer. Let me start with some hard facts. 



Even though the population in our service territory is increasing 

 faster than almost any other community in America, our consump- 

 tion per capita is declining, thanks to better technology and the gas 

 company. We proposed to cut our total load growth in half over the 

 next 20 years by investing $872 miUion in conservation. 



We believed that our investment would drive down per capita 

 consumption faster and farther than our forecast. BPA, however, 

 was concerned that it couldn't measure the results of our invest- 

 ment and that per capita consumption might go down that fast 

 anyway because of the weather or the economy. 



It feared it might pay us for something that it could get for free. 

 BPA doesn't have a great deal of confidence in conservation. Snoho- 

 mish does. We've been very successful at it for more than a decade. 



BPA was afraid that Snohomish might spend the money un- 

 wisely, that our conservation measures might not work. BPA didn't 

 want to take the risk and it didn't want Snohomish to take the 

 risk, either. I can tell you this — if we had tiered rates, we'd be 

 doing CPP today without Bonneville. BPA would not have to lift a 

 finger or spend a penny. 



But after 18 months of negotiations and an ever enlarging circle 

 of BPA personnel who were not empowered to make decisions, CPP 

 was ground down to one-third its original size and its scope was 

 changed to beyond recognition. At this point, negotiations ended. 



A centralized approach to conservation has not worked. First, 

 there is no single vantage point where one can sit and know 

 enough about the unique opportunities, circumstances and creative 

 ideas of each utility and its customers. Second, conservation tech- 

 nologies are moving faster than the rule-makers. 



Centralized programs take time to design, develop and imple- 

 ment, too much time to react to market forces. Third, a centrgilized 

 approach to conservation requires multiple layers of administra- 

 tion. BPA has a big staff to tell our staff what to tell our customers 

 to do or they won't get the money that another BPA staff collects 

 from us to send back to us after deducting the expenses. 



Finally, centralization has created conservation programs that 

 waste energy, that hold on to electric load. In the northwest where 

 gas is available, it is thermodynamically and economically superior 

 to electricity for a number of uses. But instead of encouraging peo- 

 ple to fuel furnaces and hot water tanks with natural gas, BPA 

 wants to buy natural gas to fuel turbine generators to generate 

 electricity to be sent over already loaded transmission lines, sub- 

 stations and distribution lines to heat homes and water and will 

 even pay the homeowners $65 to buy a new electric hot water heat- 

 er, even if they have gas heat. 



In fact, BPA intends to spend hundreds of millions of dollars to 

 acquire Tenaska, a power plant that will consume vast quantities 

 of natural gas to generate electricity. That's not our idea of con- 



