/ 



Mr. Chairman, Congressman LaRocco, I again want to com- 

 pliment you for this hearing, for your watchdog committee on the 

 BPA, and commend you and thank you for the good work you are 

 doing. 



Mr. DeFazio. I thank the gentleman. I think the statement is 

 pretty self-evident. I do not have any questions. Do you? 



Mr. LaRocco. I do not have any questions. 



Mr. Weaver. Thank you very much. 



Mr. DeFazio. Thank you. 



We will move on to the next panel which will be Randy Hardy, 

 Tom Trulove and Ms. Judith Merchant. Angus Duncan will be ac- 

 companying Tom Trulove. 



We will go in order of the list here. We will start with Adminis- 

 trator Hardy. 



PANEL CONSISTING OF RANDALL W. HARDY, ADMINISTRATOR, 

 BONNEVILLE POWER ADMINISTRATION; TOM TRULOVE, 

 WASHINGTON COUNCIL MEMBER, NORTHWEST POWER 

 PLANNING COUNCIL, ACCOMPANIED BY ANGUS DUNCAN, 

 OREGON COUNCIL MEMBER; AND, JUDITH MERCHANT, DI- 

 RECTOR, WASHINGTON STATE ENERGY OFFICE 



STATEMENT OF RANDALL W. HARDY 



Mr. HLardy. Thank you, Mr. Chairman, and thank you particu- 

 larly for the opportunity to discuss Bonneville's competitiveness 

 and some of the changes that are going on in the utility industry. 



As you mentioned in your opening statement, we have been en- 

 gaged for about the last eight or nine months on what we called 

 our Competitiveness Project. Before we get into some of the details 

 of what is involved with the Competitiveness Project, I think it is 

 important to explain why we are concerned today and in the future 

 about Bonneville's competitiveness. There are three reasons, from 

 my perspective, driving this concern. 



First is the double-digit rate increase we are putting into effect 

 on the first of October for all of our customers and the effect, it will 

 have on our customers and on the region's economy. Our cus- 

 tomers, whether they are direct service industry (DSI) small busi- 

 nesses or large industrial customers of retail public utilities, are 

 facing increasingly global competition in their own marketplaces; 

 shrinking price margins; enhanced, heightened sensitivity and 

 heightened impacts to our rate increases. That is one set of reasons 

 why we are concerned about our competitiveness — the residual im- 

 pact on our customers' competitiveness. This has been pretty con- 

 sistent throughout the last 20 years or so; although, the global 

 marketplace is making that competition even fiercer. 



The second reason involves what is going on in Washington, DC, 

 right now concerning the reinvention of government. It is clear the 

 Clinton Administration is taking a major initiative to try and over- 

 haul the Federal Government in talking about cutting 250,000 Fed- 

 eral employees and when tsdking about the potential of government 

 corporation status for Bonneville, debt buy outs, and other kinds of 

 alternatives. As part of the Vice President's national performance 

 review effort, we have been designated as one of 17 reinvention 

 laboratories by the Administration. The basic quid pro quo there is. 



