500 



Public power is not opposed to efforts to answer fuel choice questions. We fully 

 support the BPA fuel choice policy as outlined in the 1992 Resource Program. We support 

 the responsible evaluation of programs to determine whether any of the existing policies, 

 regulations, procedures or conservation program incentives provide mixed or contradictory 

 price signals about fuel choice. We also support the notion of assistance for customer- 

 initiated pilot projects. We believe that it is important that all parties participate in the 

 funding of the program either through direct financial or in-kind contributions. This should 

 insure that the electric and gas utilities as well as the "switching" consumer have all 

 contributed to an effort that stands to benefit them all. We believe BPA should take a 

 limited approach to this issue, removing conflicting pricing signals from its incentive 

 structure without jeopardizing our conservation goals. 



The third point deals with regional diversity. The member utilities of the public 

 power commimity have diverse business viewpoints and operating environments. Some 

 utilities are located where natural gas is not even available. Others are in direct 

 competition with natural gas or dual-fuel utilities. Many fmd themselves in extremely 

 competitive environments with no access to bulk power suppliers other than BPA. Despite 

 this diversity, public power has spoken with a united voice about a regional fuel choice 

 policy. We continue to believe that fuel choice issues are best addressed at the local level. 

 The limited availability of natural gas on a regional basis itself speaks for a policy that is 

 local in its focus and implementation. 



Finally, while it is comforting to talk about improving the efficiency of use of 

 natural gas through fuel switching, one must confront the fact that natural gas is a fossil 

 fuel whose supply is ultimately limited. While it is expected that the current supply of 

 natural gas will outlast this generation, we do not have the luxury of continuing to ignore 

 efficiencies that are available today but are not installed. Encouraging fuel switching 

 without also insisting on the most efficient water and space heating equipment available is a 

 halfway measure that makes the fuel switching issue look more like a market share grab 

 than the efficiency argument that is so often invoked by proponents. Efficient use of all 

 fuels must be our goal. 



The state of least-cost planning in the natural gas industry lags far behind that seen 

 among electric utilities. The three retail gas utilities in this state are regulated by the 

 Oregon Public Utility Commission (OPUC). In 1992, OPUC reviewed the conservation 

 performance of each of the companies and made several recommendations. In general, the 

 companies were encouraged to assess the conservation potential available to them and to 

 begin staffing and budgeting to acquire it. This is in contrast to the regions electric utilities 

 which have spent the last ten years promoting improved building codes (with strenuous 

 objections from the natural gas industry), operating programs for residential, commercial 

 and industrial customers, educating consumers about the benefits of wise energy usage, and 

 spending over one billion dollars to develop nearly 400 aMW of conservation resources. 



