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STATEMENT OF RICHARD G. REITEN 



Mr. Reiten. Mr. Chairman, on behalf of Portland General Elec- 

 tric and 600,000 plus customers, I want to thank you and the con- 

 gressman and the task force for convening the hearing and giving 

 us an opportunity to testify today. 



Our company, PGE, is one of BPA's largest customers. We pur- 

 chase energy, energy capacity and transmission services in the 

 magnitude of $50-$60 million a year. We have borne the third larg- 

 est share of the current rate increase that BPA has made. That im- 

 pact is approximately $30 million on PGE's customers. 



We share with BPA a common interest in the timely and cost- 

 effective decommissioning of the Trojan Nuclear Plant, as well as 

 the operation of the Pacific Northwest Intertie. 



While we do a lot of business with BPA, we also are in a sense 

 a competitor. Not so much for customers but for energy. The region 

 is in deficit with respect to any energy surpluses and virtually 

 every utility in the region is in the same situation. We now com- 

 pete with BPA for energy in the secondary energy markets. So for 

 all practical purposes, the size of BPA and the fact that there is 

 no longer a surplus in the region, we meet them in a competitive 

 situation in the secondary energy markets. Many times because of 

 their size, they are the benchmark pricers of secondary energy for 

 all utilities, public and private in the region in that market. 



I think it is important to understand that BPA is the hub of a 

 competitive market today. While their role is to be a cost-effective 

 transmitter of energy and an integrator of new and old power sup- 

 plies, they are in a very strong and instrumental position. They 

 have clearly what Mr. Myers just described as near monopoly 

 power in the transmission area and they can inhibit, or enhance, 

 or tax their customers £ind others as a result of their policies and 

 their pricing. 



With respect to the residential exchange and access to the federal 

 hydroelectric system for our customers and other investor-owned 

 utilities, as was just explained, we do that through the residential 

 exchange. It is a critically important program for all of Oregon's 

 electric customers and certainly ours, which are the majority of the 

 customers in Oregon. As a result of that, we in our relationships 

 with Bonneville believe that a healthy, well-managed, strong Bon- 

 neville is best for our company, for our customers and for the re- 

 gion. 



It is clear that all of us in this business, whether we are public 

 or private, small or large, are facing pressures of increased com- 

 petition. To compete, we are all reducing costs and striving to de- 

 liver higher quality and more reliable products. 



In our view, government agencies should be placed in the same 

 marketplace orientation and face the same pressures. Contrary to 

 what some believe, competition within the electric industry did not 

 descend in the last 12 or 18 months but basically has been escalat- 

 ing over the past 5 years. And any monopoly that we had as an 

 industry, electric utilities, public and private, in power generation 

 is eroding and being replaced by independent power projects, non- 

 utility generators, demand-side management, a whole variety of 

 programs. Half of the new energy capacity in this country is com- 

 ing from those sources. 



