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toward a broader, more fundamental policy issue. Stated in general terms, this question is: What 

 basic services will the Region need BPA to provide in the future, and haw shall BPA provide 

 those services? Depending on what response is given to this broad question, the PGP's answers 

 to the Task Force's specific questions could be very different. 



For example, one approach would be to assign a greatly expanded scope and variety of 

 responsibilities to BPA, including the ability to bundle or unbundle and price a variety of services 

 based on what the market will bear, rather than what BPA's customers want or what the actual 

 costs are for BPA to provide each service. The PGP members would vigorously object to setting 

 up a greatly expanded BPA and allowing it to move away from cost-based rates, however 

 beneficent the intentions might be. But if that approach is pursued anyway, we would want veiy 

 clear limits imposed on BPA to prevent it from abusing its market power or blocking what would 

 very likely become a mass exodus of the Region's utilities away from the BPA system. These 

 limits on BPA would have to include greater third-party oversight to protect BPA's customers, 

 and power sale contracts that would allow customers to terminate their power purchases from 

 BPA and receive nondiscriminatory transmission service in exchange. 



The PGP believes that a more workable response to the basic policy question would be to refocus 

 BPA on the key services that it is uniquely able to provide to the Region. Customers would have 

 the ability to choose the services diey want from BPA and would pay BPA's actual costs to 

 provide diose services, including the associated costs for environmental restoration. The PGP 

 would fmd this approach to be much more practical, equitable, and efficient and we would 

 therefore feel less of a need for additional third-party protection from BPA or for the ability to 

 distance our relationship with BPA. 



A Word About Competitiveness* 



Before I get into die issue of focusing BPA on a few basic services, I'd like to briefly respond 

 to the Task Force's question about BPA 'competitiveness'. Competitiveness has become a 

 buzzword in recent discussions about BPA, but I suspect that it has very different meanings to 

 different people. From my point of view, you have to do two things to become competitive. 

 First, you need to identify the services that your customers want and need — and diat you are best- 

 qualified to provide. Once you know what services to provide, competitiveness means moving 

 forward to provide each service as efficiendy and cost-effectively as possible. And if it is later 

 found diat your customers don't need your service or prefer to get it elsewhere, you either cut 

 your costs, improve your product or drop out of die market for diat service. 



On the flip side, competitiveness does not mean forcibly trying to provide services that your 

 customers don't need or that other providers are better able to deliver. It also does not mean 

 charging different customers different prices for the same service, or forcing customers to buy 



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