20 



Questions for the Bonneville Power Administration Task Force Hearing 



September 25, 1993 



QUESTIONS FROM CONGRESSMAN DEFAZIO 



Question 1 : Why is it important for BPA to become more "competitive"? How likely is 

 it that BPA will become a higher cost supplier of energy to the region than 

 other providers? Are there other reasons for BPA to undertake its 

 competitiveness initiative? What principles should guide BPA in this 

 eflfort? 



Answer: BPA's competitiveness is a critical issue facing the agency and the Pacific 



Northwest region. BPA and its customers are seeking to improve its 

 competitiveness in a utility environment that is undergoing rapid change. If 

 BPA fails to remain competitive, it is likely to increasingly lose customers, 

 reduce its revenue base, and threaten the ability to repay the Federal 

 investment in the Pacific Northwest hydroelectric system. At the same 

 time, fiinding for significant enwonmental efforts and important 

 components of the Pacific Northwest economy will be undermined. It is 

 critical that BPA match the pace of changes in the industry with strategic 

 competitive responses. 



The forces that have already been unleashed, and those that are likely to 

 occur in the fiiture electric utility industry, are real threats to BPA being a 

 relevant and vital player unless BPA undergoes significant change. The 

 intensified competition in electrical generation, the emergence of viable 

 independent power producers and brokers, new transmission le^slation, 

 the low cost of new combustion turbine geineration, and the abundance of 

 natural gas at the retail and wholesale level are a few examples of factors 

 our customers are considering. Although BPA is not yet non-competitive 



