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DeFazio Hearing 

 Emerald PUD, page 1 

 September 25, 1993 



INTRODUCTION 



People in the electric utility industry in the Pacific Northwest will tell you things are 

 changing so feist these days it is difficult to keep up. In preparing this testimony, I was 

 able to reflect on the actual changes that have occurred in the past few years, and I 

 realized that in fact, very little has actually changed. 



While Bonneville's rates are set to increase by 1 6 percent next week Bonneville h£is 

 advised its customers not to "over react" to the rate increase. Half of this increase is 

 a "one-time increase" driven by four years of drought. So what is at the root of the 

 uncertainty and discontent in the region? 



Bonneville's competitiveness and role in the region are at the heart of the regional 

 debate. Several processes initiated by Bonneville itself have created a flurry of activity 

 in the offices and Board rooms of the region's utilities. Tiered rates, the 

 Competitiveness Project, the termination of WNP-1 & 3, the acquisition of Tenaska, 

 and the renegotiation of the power sales contracts are a few examples. Ail of these 

 enjoy considerable debate in the region, but when you step back, not much has yet 

 changed. 



Clearly, change is needed in the industry, and change will occur. The question is 

 whether we will lead the change or be led by it. We have the opportunity to change 

 things for the better, to make Bonneville more competitive, to acquire environmentally 

 responsible resources, and to restore the public's trust in its governmental institutions. 



When we think about the brave new world of the electric utility industry and the 

 appropriate role for Bonneville it might be helpful to heed the guidance of President 

 Dwight D. Eisenhower who stated that the appropriate model should not be "federal 

 monopoly of power, [but] public or private regulated power freely chosen by the 

 citizens of each area with the federal government drawn in as a cooperating partner 

 where this seems necessary or desirable." We think the important words here are the 

 federal agency as a "cooperating partner" that is "necessary and desirable." 



I commend congress for recognizing the magnitude of the problems facing the 

 northwest electric utility industry. The potential impacts of the issues we are dealing 

 with reach beyond agency and utility headquarters to touch the lives of citizens 

 throughout the region and the nation. Thank you for providing this forum to debate 

 these issues. 



