ML20071L982
| ML20071L982 | |
| Person / Time | |
|---|---|
| Site: | Skagit |
| Issue date: | 04/27/1983 |
| From: | NORTHWEST POWER PLANNING COUNCIL |
| To: | |
| References | |
| PR-830427, NUDOCS 8305310044 | |
| Download: ML20071L982 (14) | |
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APRIL 27,1983 v m., -
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SEATTLE - The Northwest Power Planning Council Wednesday took another step in the regional power planning process by adopting its first Northwest Conservation and Electric Power Plan.
The eight Council members -- two from each of the states of Idaho, Montana, Oregori and Washington -- approved the plan two years from the date the Council was formed, April 28,1981.
The Council's plan responds to the Northwest's current surplus power condition by outlining steps to be taken to build the capability to provide for future power needs at the lowest price possible.
The plan features a projection of the region's future electricity needs, a portfolio of. flexible resources to meet those needs, a program to protect, mitigate and enhance the region's fish and wildlife, and a two-year action l
P an.
The Council's forecast of future demand for electricity covers a range.
The high-growth forecast is_2.5 percent, while the low is 0.7 percent.
To make sure the region has the flexibility to meet more than one possible pace of growth, the Council planned a 20-year resource portfolio of i
flexible resources.. It emphasized conservation becadse it is both the cheaptest resource available and is inherently flexible: it can te obtained i
rapidly or slowly depending upcm the need for power. To provide greater flexibility for generating resources, which require longer lead tirnes for planning and construction, the Council developed a strategy to acquire options. The options concept would a!!ow a resource to be planned and taken 9
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through initial siting and licensing stages and placed in a " ready" condition to be available when needed.
The Fish and. Wildlife Program adopted last November 15, contains measures designed to rebuild the depleted fishery in the Columbia River Basin plus steps to improve fish and wildlife habitat.
The Council's two-year action plan emphasizes conservation. It calls for Bonneville to modify its existing residential conservation programs. The action plan also calls for developing and testing conservation programs for the commercial sector and identifying conservation potential in the industrial and agricultural sectors. The action plan contains steps to be taken by the Bonnevi!!e Power Administration, state and local governments, and utilities and industry. This will cost the average retail electricity user about 3/100 of a cent per kilowatt hour.
The Council itself will take several actions during the next two years.
It will work with the California Energy Commission to help arrange a sale cf firm surplus power to the Southwest, it will monitor the energy situation in the region to update its forecasts, and it will continue to work with BPA, utilities, state and local governments and industry and the public to modify the plan if conditions change. The Council intends to update the plan in two years.
During the past two years, the Council consulted with the public, l
Bonneville, utilities, industry, and states and local governments and Indian l
tribes in meetings around the Northwest.
It received, reviewed and responded to their comments as it prepared tM plan adopted today.
The Council was authorized by Congress and created by the Northwest states under the Pacific Northwest Electric Power Supply and Conservation l
Act,1980.
NB: Summaries of the Council's NcitL1 Conservation and Electric Power Plan and Two-Year Action Plan are attached. Copies of the entire Plan may be obtained, when printed, from the Council's office in Portland.
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. poggg laAY 2 - 1983 PEH;r. 0003 M E3B I'U #
April 27, 1983 STATEMENT BY JOHN W. ELLIS IN RESPONSE TO THE ADOPTION TODAY OP A REGIONAL ENERGY PLAN BY THE REGIONAL POWER PLANNING COUNCIL The adoption of the Regional Plan represents the realization of a goal which we have long sought.
Cooperative regional planning for future energy needs is in everyone's best interest.-
I am sure that, as would be expected of any first-of-a-kind effort, we will differ with a number of the Plan's details and conclusions, as will others.
The next two years will be a fascinating" period as details are ironed out and conclusions are given the test of 'real life' operation.
With respect to the proposed Skagit/Hanferd Project, I continue to believe that it is extremely important for the long-term best interest of the region that our future resource options be preserved wherever practicable.
Whether the Plan provides sufficient basis for preservation of this option is l
simply not capable of being ascertained without further study by the co::pany and its partners, as well as consultation with the state and federal licensing and regulatory authorities.
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Dear Friend:
On April 27th the Council unanimously adopted the first Northwest Conservation and Electric Power Plan.
The adoption of the plan marks not the end of the Council's planning process but the beginning.
Success-ful implementation of the plan will depend on the Bonneville Power Adminis-tration, the region's utilities, industry, state and local governments, the Council -- and you.
The public has played a valuable role in the Cou'ncil's planning process.
We hope that yo.u will continue to be active in the future as decisions are made and actions are taken to carry out the plan.
The plan will be available for distribution in four to six weeks.
In the meantime, we have enclosed for your information summaries of the twenty-year plan and the two-year action plan.
An issue of Northwest Energy News which covers the plan in more detail will be available in about two weeks.
If you ordered a copy of the draft plan, you will automatically receive a copy of the final plan.
Do not reorder.
If you would like to order a copy of the final plan, call our office at the above number.
Sincerely, Edward Sheets Executive Director
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SUMMARY
Northwest Conservation and Electric Power Plan On April 27, 1983, the Northwest Power Planning Council adopted the first Northwest Conservation and Electric Power Plan. The vote came as Council representatives from Idaho, Montana, Oregon and Washington completed their initial two-year effort to outline how the region will meet its electric power needs through the year 2002. The plan is the result of an extensive process of research, analysis, and discussion with the public, the Bonneville Power Administration, utilities, and industry. The plan's goal is straightforward: to supply the power the region needs at the lowest possible cost.
The plan includes a forecast of regional electricity demand, a portfolio of energy resources to meet the projected demand over the 20-year planning period, and a two-year act' ion plan describing the steps for Bonneville and others to take to implement the plan.
FORECAST Recognizing the uncertainties of future electricity demand, the Council i
adopted a " range" forecast. Rather than attempting to project electricity demand growth to a single "most likely" figure, the Council's forecast lays down the plausible but unlikely bounds of regional growth.
The forecast ranges from a high of 2.5 percent annual growth in electricity demand to a low of 0.7 percent growth, with intermediate steps of 1.5 and 2.1 percent.
Responding to public comment on the Council's draft power plan, the Council changed some assumptions about the regional economy and made a nurnber of technical improvements in demand forecasting models.
The changes include:
indefinite postponement of the Alumax aluminum plant; assuming slower recovery from the recession; and assuming lower economic growth in the low case.
These changes and improvements resulted in a slightly lower forecast range.
The Council's electricity demand forecast is based on a range of projected regional economic growth. The high-growth forecast assumes that regional employment will grow more than twice as fast as the nation over the next 20 years -- a ratio that is even greater than the Northwest's most rapid five-year growth period from 1974 to 1979. In the high-growth forecast,
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total employm:nt would increase by more than 3.4 million between 1980 and 2000, compared to 1.5 million additional jobs betwsen 1960 and 1980.
in the low-growth forecast, total employment in the region would increase by 700,000. employees between 1980 and 2000. This rate is con-sistent with low-range national forecasts but assumes the Pacific Northwest would grow as fast as the rest of the nation.
Energy demand in these forecasts grows slower than historical rates, even in the high forecast. This occurs even though the economy is projected to grow more rapidly. There are several reasons for these changing patterns.
Homes and buildings have become more energy efficient in response to higher electricity prices and recently adopted energy codes. Regional industrial growth is projected to occur mostly in less electricity-intensive industries such as high technology. And rising electricity prices will affect energy use and energy efficiency in the future.
In terms of energy resources, the region would have to add anywhere between 250 megawatts in the low forecast and 11,500 megawatts in the high forecast (excluding resources under construction) over the next 20 years. For comparison, the City of Seattle uses about 1,000 megawatu.
RESOURCE FI.EXIBR.ITY The Council's planning strategy emphasizes resources that are flexible.
Risk and uncertainty can be reduced by choosing smaller resources, with shorter lead times for planning and construction.
For example, some resources, like conservation programs, can be developed and implemented in increments as the need for power grows.
Other resources require much more time from inception to completion.
New arrangements, called " options," could make their scheduling more flex-ible.
An option would allow a resource to be taken through the time-consuming but relatively inexpensive siting and design stages and placed in a
" ready" condition. 'In that condition, the project could be accelerated or delayed depending on the need for power. Options are an insurance policy that would allow the region to plan to meet even the strongest rate without making immediate, and perhaps unnecessary, commitments to building new resources.
MAJOR. ISSUES The Council faced numerous issues in developing its regional power plan. Several of these issues are outlined below.
Cost of the Plan The Council has selected the lowest-cost mix of resources to meet future energy needs and developed a planning strategy designed to minimize the risk of overbuilding or underbuilding resources. The actual cost of the plan will depend on how much electricity the region needs over the next 20 4/26/83
l years. In thb Council's high growth forccast, many new rcsourecs would be needed, including expensive new thcrmni plants.
Rotall electricity ratcs, adjusted for inflation,' could increase by 40 percent.
In the low-growth forecast, increased electricity needs could be met by developing less than a third of potential low-coat conservation. Rates, adjusted for inflation, could drop by 20 percent. In the short term, given the regional poveer surplus, the plan calls for slow, gradual development of conservation programs that won't add unnecessarily to theisurplus.
The cost of the Council's conservation programs will be about 3/100 of a cent per kilowatt-hour over the next two years.
Current Surplus of Firm Energy The region's: current electricity surplus is expected to last from 5 to 20 years, depending on electrical demand growth. The Council will work with the California Energy Commission, Bonneville, and Northwest utilities to secure an agreement' for the sale of firm surplus energy to California utilities. If a sales agreement is concluded, the Council may modify its resource s:hedule..The Council decided to proceed with new, more energy-efficient bJilding codes'so that long-term conservation savings are not lost.
Other conservation activities follow the need for energy: programs are to be developed and tested'now, and accelerated when the demand for new power grows.
Marketing Interruptible Energy in the Northwest During the spring runoff each year, large amounts of water must be either spilled or used to' g(nerate electricity. Typically, excess power has been sold cheaply to Ca!ifo nie, utilities and has been used to shut down more costly Northwest thern ad plcn.s. The Council's plan calls for making better use of the spring runoff my seeking more customers in the region for this low-price power. For examp!e, electric boilers could be installed in Northwest industrial plants and operated on an interruptible basis.
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Quantih and Cost of Cmservation
! After detailed analysis, coUultation, and public comment, the Council decided that 5,100 megawat$ of, conservation in the high forecast at an average cost of 1.8 cents per kilowatt-hour was appropriate. Because the Northwest Power Mt provided tint incentives, regulations, and rate designs can be used to achievei conservation, the Council has chosen very high participation rates for^ conse-vation programs.
These measures, used as appropriate, should allow the region to achieve high participation rates over the next 20 years.
s The Counci[ decided, after extensive public comment, to include in its conservation programs. - 1) a low-income program that pays 100 percent of the cost of residential, weatherization measures, and 2) weatherization of renter-occupied arxf low-income. households in proportion to their total share of electrically-heated households. s s
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Quantity and Cost cf New Hydropower The Council selected hydropower projects that are expected to be low-cost, that generato most of their energy in the fall and winter when needed, and that would not have adverse effects on fish and wildlife or the environ-ment. This resulted in a target of 920 megawatts of new hydro in the high forecast. In the next two years, the plan calls for options to be acquired on six new hydro sites in order to test the options concept.
Use of Comt:ustion Turbines The Council selected combustion turbines as insurance against un-certain, rapid increases in the demand for electricity. Combustion turbines have short lead times and can be built at very low cost. After discussion and analysis, the Council selected 1,0$0 megawatts of combustion turbines in the high forecast as a planning reserve for unexpected load growth.
WPPSS 4 and 5 Compared With Coal Plants Even in the high forecast, the region will need no new large thermal resources until 1998, and sometimes after the end of the current planning period in the low forecast. The region is very unlikely to achieve the growth rates of the high forecast. The Council has concluded that if the region needed a new thermal resource now, coal plants would be preferable to WPPSS 4 and 5. These nuclear plants would take longer to build than a coal plant -- 7 versus 4 years -- thus posing higher risks of overbuilding. The higher risk would be justified only if the plants were significantly cheaper.
After detailed analysis, the Council found no significant cost differences between coal plants and WPPSS 4 and 5.
In the next revision of the plan, the Council will re-examine future energy needs and the performance of existing conservation programs, to see if additional resources 'are needed in the late 1990s. The Council will also re-evaluate resource alternatives, including coal and nuclear plants, additional conservation and renewable resources, and new technologies.
The Council also recognizes that model conservation standards and regulatory changes to support'the options concept depend on federal, state and local governments. If they fail to act, then additional energy options would be needed.
RESOURCE PORTFOLIO The Northwest Power Act gave the Council two primary guidelines for selecting energy resources to meet energy demand growth: 1) get the power the region needs; 2) buy the cheapest resource first. All acquisitions must be consistent with the Council's Fish and Wildlife Program and environmental considerations.
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Thn proposed portfolio railects th;se prioritics.
In tha high growth forecast, the resource portfolio is composed of:
conservation 5,100 MW; new hydropower 920 MW; cogeneration 500 MW; coal plants 3,300 MW; and, combustion turbines 1,050 MW (included as a planning reserve).
In the low growth forecast, the region would need only 660 megawatts of conservation.
CONSERVATION All savings are based on the high load growth forecast. All costs are based on 1980 dollars.
Residential In 1981, the region's residential sector consumed an estimated 5,323 average megawatts of electricity, about 34 percent of the region's total con-sumption.
Significant conservation savings are possible in the residential sector. More efficient space heating in new homes could save 855 megawatts by the year 2002.
Weatherization of existing homes could save 520 megawatts by the year 2002. More efficient water heating could save 510 megawatts, and more efficient appliances could save 355 megawatts by the year 2002.
The average cost of these savings is less than 2 cents per kilowatt-hour.
These programs would total 2,240 megawatts of savings in the high growth forecast by the year 2002 -- overall, a 21 percent improvement in electricity'use.
Commercial In 1981, the commercial / governmental sector accounted for about 18 percent of BPA's firm sales, or 2,713 megawatts. The council proposes pro-grams targeted to conserve 1,350 megawatts of power by the year 2002 --
720 megawatts through upgrading existing structures and 615 megawatts through building more energy-efficient new structures. The average cost of these savings is 1.7 cents per kilowatt-hour.
l These programs would achieve a 20 percent improvement in energy efficiency in the commercial sector.
Industrial In 1981, the region's industries buying electricity from utilities con-sumed 4,020 megawatts. BPA's direct service industrial customers used 3,131 megawatts, of which 2,405 was firm load. Preliminary estimates suggest this sector could generate about 545 megawatts of conservation power by 2002 at an average cost of 1.5 cents per kilowatt-hour. 4/26/83
These programs repressnt a 6 percent improvemsnt in entrgy us2 by the industrial sector.
Irrigated Agriculture In 1981, irrigation in the region consumed 770 megawatts of power.
Irrigated agriculture could save 385 megawatts by the year 2002 through improvements in scheduling of water application and more efficient irrigation systems. The average cost of these savings is 1.9 cents per kilowatt-hour.
This represents a 30 percent improvement in efficiency.
Power System Efficiency Improvements Improvements in the operations of hydropower dams and transmission and distribution systems could save significant amounts of electricity. BPA and the Corps of Engineers estimate that efficiency improvements at existing dams could yield up to 350 megawatts of savings. Planning conservatively, the Council calls for achieving 270 megawatts of savings from power system efficiency improvements over the next 20 years. The Council will work to identify other system efficiency savings over the next two years.
Hydivpower For planning purposes, the Council chose a target of 920 megawatts of new hydroelectric power throughout the region, at a cost between I and 4 cents per kilowatt-hour. This represents less than 10 percent of the region's new hydropower potential.
The Council chose its target figure after assessing the cost, environmental and fish and wildlife constraints, and seasonal generation characteristics of the region's hydropower system. In the high forecast, the first hydro project would be needed in 1990.
Industrial Cogeneration Industrial cogeneration, producing both electricity and heat for industrial processes from the same fuel source, could provide up to 500 mega-watts of new electricity in the Council's projected high growth scenario. The 500 megawatts of planned cogeneration include 400 megawatts from biomass and 100 megawatts from gas, oil, or coal.
Coal Plants Council projections call for the addition of new coal-fired generation only if the region grows very rapidly over the next 20 years. In the high forecast, 3,300 megawatts of coal would be added, with the first unit beginning in 1998. New coal resources are estimated to cost between 4.0 and 4.7 cents per kilowatt-hour.
The Council assumed that three coal plants currently under construc-tion, Colstrip 3 and 4 and Valmy 2, will be completed.
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1
l Nuclear Plants The Council also assumed that WPPSS 1, 2, and 3 would be completed.
The Bonneville Power Administration has already purchased the power from plants ! and 2 and 709f of plant 3.
Combustion Turbines I
Combustion turbines, fueled by either oil or natural gas, have been in-cluded in the plan as a reserve for unexpected rapid load growth. Combustion turbines would not be used to provide electricity on a regular basis. They would, however, perform a valuable planning role when electricity demand is highly uncertain.
Combustion turbines have short lead times (18 months) compared with coal plants (48 months) or WPPSS 4 (84 months). If options were held on both combustion turbines and a coal plant, the decision to begin construction of the coal plant could be delayed to see if uncertain electricity demand materialized. If demand did materialize, combustion turbines could be built quickly to provide power while the coal plant was being built. Once the coal plant was on line, combustion turbines could provide standby power for future unexpected load growth. The Council included 1,050 megawatts of combustion turbines in the plan in the high case to be built only in the event of rapid load growth.
FUTURE ROLE OF THE COUNCIL Adoption of the power plan marks just the beginning of the Northwest power and conservation planning process, not its end.
The Council will continue to work with Bonneville and other federal agencies, utilities, state and local governments, businesses, and citizens to ensure the successful implementation of this plan.
Because electric power planning is an on-going process, the Council adopted a process for monitoring electric power events in the region. The purpose of this monitoring role for the Council is to make sure the elements in its plan are adapted to future power needs. Therefore, the Council intends to update its plan every two years. The data in the plan (forecasts, assump-tions, programs and their effectiveness) will be monitored. If necessary, the plan will be changed to address changing patterns of power usage.
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. 4/26/83
NORTHWEST POWER PLANNING COUNCIL we yc i
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Toll free number for Oregon: 1-800-452-2324
SUMMARY
The Two-Year Action Plan The Northwest Power Planning Council designed its two-year action plan to serve both short-term and long-term goals. Because the region will have a surplus of electricity for 5 to 20 years, or longer, depending upon the pace of economic growth, the Council authorized a series of steps to make sure the Northwest has an adequate supply of power when it is needed.
The two-year action plan is an integral part of the Northwest Conserva-tion and Electric Power Plan, adopted by the Council on April 27,1983. The items in the two-year plan involve work by the Bonneville Power Administra-tion, utilities, state and local governments, and the Council. These actions are the first steps in implementing the 20-year regional power plan.
Emphasis in the action plan is on conservation. Taken all together, the con-servation programs in the.two-year plan will cost the average Northwest ratepayer only about 3/100 of a cent per kilowatt-hour over the next two years.
In the short term, me two-year action plan responds to the surplus by calling for only a minimum of new resources, mostly from conservation. For the long term, the action plan lays the groundwork for meeting future power needs in the most cost-effective manner.
The two-year action plan focuses upon building the region's capability to:
a) implement energy conservation programs, b) develop smaller, more dispersed renewable resources, and c) shorten the lead time for the siting, licensing and construction of generating plants.
CONSERVATION The general aim of the Council's conservation program is to build the region's capability to generate power through conservation. The action plan calls for development and testing of new conservation programs for all end-use ectors. And it includes modifications to existing conservation programs 4
to improve their effectiveness. These steps are designed to ensure that the region develops the knowledge and experience necessary to acquire cost-effective conservation in the future. 4/26/83
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During the n2xt two years, th2 primary focus for cons 2rvation work is on developing the best systems for delivering conservation when it is needed.
BPA's basic role in the overall scheme is to provide financial assistance for conservation improvements. The Council's programs encourage the develop-ment of decentralized methods to deliver conservation through utilities, state and local governments, and private contractors.
The Council included a number of requirements in its programs to ensure that conservation improvements will be done efficiently and effec-tively.
For example, all cost-effective conservation measures must be installed at the same time so that repeated visits to a home or building can be avoided. Audits and inspections are required to ensure quality control.
Research and demonstration projects and training programs are also included.
To ensure conservation benefits are distributed equitably, the Council has included in its conservation programs: 1) a low-income program that pays 100 percent of the cost of residential conservation measures and 2) weatherization of renter-occupied and low-income households in proportion to their total share of electrically-heated households.
New buildings are an important source of long-term conservation. Con-servation measures are easiest and cheapest to install during construction, and the savings willlast 50 years or more. The Council calls for the adoption during the next two years of new, more energy-efficient building codes for residential and commercial buildings.
These codes can reduce household energy use by about 60 percent. If the new codes are not adopted, utilities may adopt alternative measures that conserve an equivalent amount of If they do neither utilities would be subject to a surcharge on BPA power.
r electricity rates.
The two-year action plan calls for modifying BPA's current residential conservation programs and for developing new programs in business, govern-ment, industry, and agriculture. The total savings from all of these sectors is 150 megawatts over the next two years:
residential 75 MW --
modified BPA weatherization programs; commercial 35 MW -- build BPA capability to offer programs; governmental 10 MW --continue BPA institutional programs; industrial 15 MW --
develop technical information to begin programs; and, agricultural 15 MW -- develop technical information to begin programs.
Only those measures costing less than 4 cents per kilowatt-hour would be purchased.
HYDROPOWER AND OPTIONS Beyond conservation, the Council's two-year action plan calls for steps to broaden and diversify the Northwest's electric energy resource potential.
Several planning projects, studies and research efforts are included. 4/26/83
A Key among these is the testing of the " options" concept. An option would allow a resource to be taken through the time-consuming but relatively inexpensive siting and design stages and placed in a " ready" condition until needed. In the next two years, the Council calls for testing the options concept by acquiring, options on six potential hydropower sites. BPA's efforts to acquire options should help to identify changes in regulatory processes that may be required to make options work. The Council will also work with other agencies to rank potential hydro sites according to their impacts on fish and wildlife.
MARKETS FOR SURPLUS ELECTRICITY The two-year action plan calls for development of additional markets for surplus interruptible power in the region in order to retain for the North-west the economic benefits of low-cost non-firm power. This could include as much as 1,400 megawatts in the industrial sector and some irrigation loads.
The Council will work to help secure an agreement for the sale of firm surplus power to the Southwest. In consultation with Bonneville and North-west utilities, the Council will open discussions with the California Energy Commission on a potential power sale to benefit both regions.
OTHER RESOURCES The Council intends to use combustion turbines as a planning reserve for unexpected high electricity growth. In order to test this use of combus-tion turbines, the two-year plan calls for BPA to acquire the output of an existing turbine and seek exemptions from the Fuel Use Act. The Council will also conduct various studies on the regulation and operation of combus-tion turbines.
Research and demonstration projects are included for renewable energy resources: geothermal, wind, biomass, and solar. Bonneville would also assist potential cogenerators in developing and marketing cogeneration.
OTHER ACTIONS The Council will work with BPA, utilities, and state and local govern-ments to monitor changes that may affect the plan's schedule and imple-mentation. The Council will continue to update information on forecasting and resource planning. It will conduct studies on a number of major energy issues. And it will continue its public information and involvement efforts.
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, 4/26/83 l
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