108 



Public Power Council Testimony 



before the 



Committee on Natural Resources 



Bonneville Power Administration Task Force 



Eugene City Council Chambers 



Eugene, Oregon 



September 25, 1993 



1. Wby is h important for BPA to become more "competitive"? How lilcely is it 

 that BPA will become a higher cost supplier of energy to the region than other 

 providers? Are there other reasons for BPA to undertake its competitiveness 

 initiative? What principles should guide BPA in this effort? 



BPA must remain competitive in order to retain its customer base. If BPA's rates 

 increase disproportionately to alternatives, its customers will seek new power supply options. 

 Bonneville is currently experiencing considerable cost pressures and we do not see these cost 

 pressures declining in die future (e.g., fish and wildlife coste and new resource costs). If 

 BPA's revenues decline as a result of customers leaving, these higher costs will tlien be 

 ^read over a declining customer base. 



It is very possible that BPA will become uncompetitive - the effects of the recent rate 

 increase are a case in point. Many utilities are now looking to reduce tlKir power supply 

 dependance on BPA, including Clark Public Utilities, Tacoma City Light, Seattle City Light, 

 EWEB, and Snohomish PUD. Also, the DSIs, a major segment of BPA's customer base, 

 are reducing production due to the low aluminum prices and rising power rates. 



There are other reasons for BPA to undertake its competitiveness initiative. BPA has 

 become too bureaucratic as it has tried to apply a "one size fits all" approach to a myriad of 

 circumstances. Additionally, it has tried to be all things to all people. Delivery time is 

 slowed or stopped by federal requirements, and paralytic analysis and decision-making 

 processes undermine customer service. 



Two principles should guide and inform the competitiveness initiatives now being 

 undertaken by Bonneville. The first principle is that Bonneville must work with its 

 customers (those who pay for the programs) to become more businesslike. The second 

 principle should be that all programs must be re-examined for their need, effectiveness, and 

 cost. 



-1 



PUBLIC POWER COUNCL 

 eoo N E MuffliomW. Sum m 'onund. ow ma 

 (503)2321427 



