Bonneville Power Administration's Efforts To Implement the Conservation Provisions of Public Law 96-501

GAO examined the Bonneville Power Administration (BPA) assessment of electricity conservation potentials in the Pacific Northwest Region, analyzed BPA criteria for determining cost-effective conservation efforts, and considered the pace of its conservation efforts to determine whether the program should be accelerated.

GAO believes that BPA has made a good faith first effort to implement the conservation provisions of Public Law 96-501. Over $400 million will be invested in conservation efforts over the next 5 years which are designed to save about 300 megawatts. Much more can be done in future years to fully capitalize on the region's conservation potentials, especially in the commercial and industrial sectors. Additional conservation efforts to be implemented in future years are now being designed. BPA is working to resolve important policy questions regarding criteria for assessing the cost-effectiveness of conservation measures and for granting billing credits to customers who successfully implement conservation efforts on their own. BPA needs to resolve these and other related policy questions before it can fully and consistently implement the conservation provisions of the Act. In the absence of a regional power and conservation plan, BPA is developing cost-effectiveness criteria for the purpose of planning resource acquisitions, including conservation programs. BPA must still determine how to value quantifiable environmental costs and benefits as required by the Act and what discount rates to apply when comparing the future costs and benefits of alternative resources. BPA officials should include provisions in new industrial contracts to establish reasonable timetables for the implementation of all cost-effective conservation measures.