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get Chief Executive Officers from all around the country, they are 

 all thinking about and dealing with the same thing. 



You look at utilities across the country, they are downsizing just 

 as we are, just as other industries are. It is one indicator of that 

 trend. Pacific Gas and Electric, the largest utility in the country, 

 in Northern California announced about an 11 percent downsizing 

 two months ago. So, that element you see. And, you see the same 

 unbundling occurring in the larger integrated utilities as well. It 

 goes all the way to spinning off subsidiaries to look at specific as- 

 pects of the transmission business. Many of them have already 

 spun off subsidiaries. Mission Energy of Southern California Edi- 

 son being one primary example, to go into the IPP generation busi- 

 ness. They are looking for profit opportunities, and they are looking 

 to position themselves to take advantage of this same change. So, 

 we are seeing that as pretty much an industry-wide phenomenon. 

 It actually started, you know, several years ago but will be greatly 

 accelerated by passage of the Energy Policy Act and the new power 

 given to FERC to mandate transmission access that will assist, if 

 you will, the market forces that are already in motion. People see 

 that the change coming is analogous to the gas company. If you are 

 a transmission provider like Bonneville is, like Pacific Corp is, you 

 can envision a day where you may be like a pipeline company and 

 you simply have a common carrier status without any priority on 

 your lines. Those sorts of things are occurring and virtually every 

 large utility, public and private in the United States is trying to 

 cope with those same sorts of issues, Mr. LaRocco. 



Mr. LaRocco. Well, carrying it further, what can you say to the 

 upstream users and people up in Idaho who might be concerned 

 that all of this might mean that there is going to be some deem- 

 phasis on fish and wildlife and the commitment to fish and so 

 forth? I mean, I think we all understand the efficiencies and so 

 forth. 



Mr. Hardy. What I would say is this — ^they ought to be fun- 

 damentally invested in our success in this endeavor because our 

 failure will directly lead to unfunding of fish and wildlife programs 

 and the other regional benefits. If we do not remain competitive, 

 we are going — as I said in my opening statement — start to miss 

 Treasury payments. We will look at a shrinkage of our load base. 

 What we will have left in the worst case — ^we will not go out of 

 business, I do not think — but what we will have left is all the non- 

 generators who do not have any capability to do anything but buy 

 power from us. That is half of the load base we currently have. 

 And, you are going to spread a given amount of fixed cost over a 

 smaller kilowatt hour sales base and your rates go through the roof 

 and that has a self-perpetuating kind of downward spiral. That is 

 the vision. So, we need to be successful in our Competitiveness 

 Project in order that we continue to have stability in growth and 

 revenue. We generate the new wealth, if you will, that provides 

 both rate stability and provides the funding for our fish and other 

 environmental obligations. If we are not successful, the exact oppo- 

 site occurs. 



Mr. LaRocco. You have talked about today — and yesterday in 

 Boise when the focus was on salmon — giving stake holders, particu- 

 larly environmental and other public interest groups, an incentive 



