49 



In this scenario, all the parties — Bonneville, the utilities, inde- 

 pendent power producers and others — would still be playing by the 

 same rules and environmental standards. State and local govern- 

 ments would be obliged to do their part to enact and implement 

 and maintain rigorous energy codes as we do now. The region 

 would continue to cooperate both in the operation of the regional 

 system and in carrying out those functions that need to happen at 

 a regional level, for example, some research and demonstration ac- 

 tivities and some conservation. 



Regulatory and market conditions would be shaped to permit 

 utilities to look at the long-term return on investment, as well as 

 the short-term price impact of their decisions, without being placed 

 at a near-term competitive disadvantage for doing so. Utilities 

 would not be afraid to make major energy efficiency investments 

 because their customer might bolt to another producer. Utilities 

 would be able to figure out how to compete not just on price but 

 also on service. 



How we get to the latter scenario is certainly not clear to us yet, 

 but there is reason for optimism. The Council believes Bonneville 

 will have a major continuing role in providing electricity to the re- 

 gion. Unlike some of the critics today, the Council believes Bonne- 

 ville is competitive now and with wise management will continue 

 to be so. Bonneville's hydropower and transmission systems will 

 continue to be a strategic edge for the entire region. Getting 

 unbundling and tiered rates and other choices right, that is, in a 

 way that serves both efficiency and equity, will be extremely dif- 

 ficult but doing so will also be necessary if the benefits of greater 

 competition are to be achieved and spread to all parties in the re- 

 gion. 



We also know that Bonneville is a large bureaucracy, and we 

 sometimes have problems dealing with it in the same way anybody 

 has problems dealing with bureaucracies. We believe Bonneville 

 can improve its efficiency and its responsiveness. We believe that 

 many of the steps that Randy has already described and that Bon- 

 neville is considering in its fiinction-by-function review are aimed 

 in that direction. We support that process and we are participating 

 in it. Bonneville must become more like a business for tomorrow's 

 utility world but we urge you also to remember that Bonneville is 

 not just a business, it is also a federal agency. It must continue to 

 support and act consistent with the long-term goals of the North- 

 west Power Act. And we are prepared and we are actively working 

 with Bonneville, with the Administrator, in pursuit of those objec- 

 tives. 



Thank you, Mr. Chairman. 



Mr. DeFazio. Thank you. 



Ms. Merchant. 



[The prepared statement of Mr. Trulove follows:] 



