94 



Mr. DeFazio. I am pleased to hear that. 



I am going to let this panel go and move on. I thank everybody 

 for their participation and their answers and we will move on to 

 the next panel. 



Okay, the next panel is quite large. We do have enough chairs 

 and you will just have to be cognizant of the need to move the 

 microphone around. As soon as she puts down the placards, we will 

 know which direction we are moving in. Okay, we are going from 

 my right to left, Mr. Lorenzini, Mr. Drummond, Mr. Myers, Mr. 

 Reiten, Mr. Crisson, Mr. Fergus Pilon and K.C. Grolden. 



We are prepared to receive your testimony, Mr. Lorenzini. Pro- 

 ceed as you wish. 



PANEL CONSISTING OF PAUL LORENZINI, PRESIDENT, PA- 

 CIFIC POWER, A DIVISION OF PACIFICORP; WILLIAM K. 

 DRUMMOND, MANAGER, PUBLIC POWER COUNCIL; ROBERT 

 V. MYERS, SENIOR VICE PRESIDENT OPERATIONS, PUGET 

 SOUND POWER & LIGHT CO.; RICHARD G. REITEN, PRESI- 

 DENT, PORTLAND GENERAL ELECTRIC; MARK CRISSON, DI- 

 RECTOR OF UTILITIES, TACOMA PUBLIC UTILITIES, ON BE- 

 HALF OF PUBLIC GENERATING POOL; FERGUS A PILON, 

 GENERAL MANAGER, COLUMBIA RIVER PEOPLE'S UTILITY 

 DISTRICT, ON BEHALF OF NON-GENERATING PUBLIC UTILI- 

 TIES; AND K.C. GOLDEN, EXECUTIVE DIRECTOR, NORTH- 

 WEST CONSERVATION ACT COALITION 



STATEMENT OF PAUL LORENZINI 



Mr. Lorenzini. Thank you, Mr. Chairman. My name is Paul 

 Lorenzini and I am the president of Pacific Power. We are an oper- 

 ating division of PacifiCorp. Together with Utah Power, we serve 

 1.3 million customers in the Pacific Northwest states. We also sell 

 wholesale power throughout the West and as a major BPA cus- 

 tomer, we are responsible for about one-tenth of the agenc^s reve- 

 nues. 



We come to the issue of competitiveness as a company that began 

 to see these chsinges occur about a decade ago and began to make 

 major changes to address them. During that period, we have cut 

 cost; we have cut staff; we have entered into a merger with Utah 

 Power and Light that achieved substantial savings; we have sought 

 innovative wholesale transactions. As a result of all of those ac- 

 tions, we have achieved consistent reductions in our prices since 

 1985, all with the goal of becoming and remaining a low-cost pro- 

 ducer to face what we see as an increasingly competitive environ- 

 ment. 



BPA clearly faces the same competitive pressures and challenges 

 that we do and they appear to be taking steps to control their costs. 

 We think they deserve to be commended for the actions that they 

 took to hold down the size of their price increase; for their function- 

 by-function review; and their current plans to reduce their staff. 



But reducing costs and controlling prices alone may not be 

 enough to be competitive. We think they will need to be more com- 

 petitive in their pricing, which we think means unbundling. 



Currently, BPA incurs cost for programs and services that bene- 

 fit some but not all of their customers, and yet, all of the customers 



