476 



ItiUML Exchange! 



Eliminate the residential exchange. 



The residential exchange started as a mechanism in the 1980 Regional Power Act to give 

 residential and small farm customers of lOUs access to the FBS. The principle is that 

 since federal tax payers were subsidizing BPA wholesale rates, these customers deserved a 

 pay-back for their investment. Things change. 



BPA is current on all U.S. Treasury payments. Any subsidy that may have existed has 

 been eliminated. Three of the region's lOUs are currently not, or soon will not be, 

 receiving cash subsidies from the residential exchange. Only Portland General Electric and 

 Puget Power will remain recipients of residential exchange dollars. 



Continuing the residential exchange at a time when BPA's customers are paying for 

 salmon recovery, and when wholesale tiered rates are being considered presents a situation 

 where the subsidy is reversed. BPA preference customers are "buying down" or 

 subsidizing the residential customers of lOUs. This "buy down" paves the way for the 

 lOU residential rate to be less, in many cases, than the public utility's residential rate. 



If the residential exchange remains intact and tiered wholesale rates becomes a reality, 

 then the payments should be based on the second tier in order to send a price signal to the 

 lOUs and their customers. 



Columbia River PUD, St Helens, Oregon 

 Comments to the DeFazio Task Force 

 07A)2/93, 03:36 PM 

 page 11 



