36 



customer-focused organization, or we are going to have serious 

 problems, and I think that is entirely appropriate. 



But with repayment reform issues that affect us, btu taxes, fed- 

 eral FTE employment restrictions and reductions, all of those 

 things are things that will affect us nationally, we have to restruc- 

 ture ourselves to be responsive to that set of governmental impera- 

 tives that are starting to move that affect us and affect all indus- 

 tries to a significant extent. 



The second factor is one that is unique to the electric utility in- 

 dustry. This industry has been a series of regulated monopolies for 

 its entire 100-year existence, and that is now going to fundamen- 

 tally change. As a result of the bill the Congress passed last year 

 to deregulate transmission access, we are already deregulated at 

 the generation level. Deregulation at the transmission level is rap- 

 idly coming, and we only have to look to what the airlines and the 

 gas companies and the banks and the phone companies went 

 through in the 1980s to get some picture of the amount of competi- 

 tive change that is going to occur in this industry as a whole in 

 the 1990s. 



Bonneville is not unlike any other major utility; we have to be 

 equipped to respond to that kind of new and very different competi- 

 tive challenge. Simply leveraging our monopoly power and our 

 transmission system and our hydro system is no longer going to be 

 sufficient to enable us to remain competitive in that kind of rapidly 

 changing environment. 



The third portion of this that is important is our customers' com- 

 petitiveness. It is not just the aluminum companies, it is Boeing, 

 it is Weyerhaeuser, it is major industrial customers and commer- 

 cial customers of most of our retail utilities. Most of them are com- 

 peting in a global marketplace. Whether it is paper or aluminum 

 or airplanes or whatever other commodity or product you are talk- 

 ing about, there is much keener competition. That makes them 

 much more sensitive to our price increases as a major segment of 

 their operating costs. To keep them competitive in earning reve- 

 nues that will basically pay our bills, we need to keep our rates as 

 low as possible. 



So I see those three factors all creating significant long-term 

 pressures on Bonneville and, frankly, on most utilities across the 

 Nation that we have to cope with. 



In the past, Bonneville has tried to be all things to all people in 

 the region. Our customers have an analogy that is pretty apt. They 

 call us the punch bowl. Every customer and most of the interest 

 groups have a straw, and he or she who has the biggest straw and 

 sucks the hardest and the fastest gets the mostest. 



Unfortunately, that has been all too true, and we have played 

 that role. We have tried to please all parties and balance all inter- 

 ests. I have concluded we can no longer continue to do that and re- 

 main competitive. We need to move fi-om being a kind of bene- 

 ficiary-focused, process-oriented organization to being a more mar- 

 ket-driven, customer-focused, cost-conscious organization. We need 

 to make that movement towards a more businesslike posture with- 

 out abandoning our social responsibilities for fish mitigation and 

 environmental protection. We need to be more selective about the 

 investments that we make, and we can't be all things to all people. 



