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are served by PGE. 



For all of these reasons, PGE has always believed that a healthy Bonneville Power 

 Administration is best for the Pacific Northwest, for PGE and for our customers. 



n. INCREASED COMPETITION VS INCREASED COST OF DOING BUSINESS. 



Mr. Chairman, all businesses in this country, whether they are public or private; small or 

 large; domestic or international, are facing the pressure of increased competition. To 

 compete, we are all reducing costs and striving to deliver 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 utility industry did not just 

 descend upon the Pacific Northwest in the past eighteen months. Competition has been 

 escalating within the region - as it has around the nation - for the past five years. 



The monopoly that utilities had in power generation has been replaced by Didependent Power 

 Projects (IPPs). Last year over half of the new energy capacity in the country came ftom 

 IPPs. 



The transmission system monopolies for bulk power sales that utilities enjoyed are also 

 dis^)pearing. This comes as a result of aggressive legislation ^jproved by Congress last 

 year to open up transmission systems to wholesale power transactions and to facilitate non- 

 utility generation. 



At PGE we have had a variety of experiences - both good and bad - with these forces of 

 competition, some of which I will get into in a moment 



