10 



Statement of Randall W. Hardy, Administrator 



Bonneville Power Administration 



September 25, 1993 



Chairman DeFazio, it is again my pleasure to appear before the Bonneville Power 

 Administration Task Force. 



My testimony today will focus on the challenges and opportunities facing Bonneville in 

 this rapidly-evolving industry, and how Bonneville is adapting to them. The changes that 

 are occurring leave Bonneville with no choice but to change fundamentally. The good 

 news is that by becoming more market-driven, customer-focused, cost-conscious, and 

 results-oriented, Bonneville can expand the benefits it has provided the region for the last 

 57 years, without fundamentally changing the agency's mission. The more sobering news 

 is that Bonneville's ability to carry out its mission may be impaired if we do not succeed in 

 this change. 



The changes required to ensure that BPA continues to expand the benefits it provides are 

 significant. Today I wall describe how we are identifying and creating the necessary 

 changes, through Bonneville's Competitiveness Project. 



Fundamental Changes in the Electric Industry Require BPA to Change 



Bonneville must make changes in response to events that are sweeping the industry, or 

 risk becoming increasingly irrelevant to our customers' needs, and therefore unable to play 

 the key historical role of Northwest power provider of choice. 



The costs of new power sources have come down steeply, causing the gap between BPA's 

 costs and the costs of alternative power sources to narrow dramatically. Ten years ago, 

 the costs of power fi-om a new gas-fired combustion turbine were roughly 250 percent 



