103 



Mr. DeFazio. Thank you. Appreciate it. We'll proceed now to 

 questions. What we'll do on the first round is ten minutes per 

 member and then we'll see on subsequent rounds how we go. 



To either Ms. Hickey or to Mr. Hardy, if you could just generally 

 comment briefly. I had this report which I just got last weekend. 

 It's been available longer, but unfortunately, I just got it over the 

 weekend. I've read through it once. 



But it was the comments on your resource acquisition and an as- 

 sessment of the current experience by Peters and Macrae and 

 Serat. We're going to hear a lot of very critical testimony about 

 your acquisition process, both generation and demand side. 



Could you comment on a few of the recommendations in this re- 

 port, what you've done to change and to implement changes, and 

 in particular, perhaps the risk portion, because that goes to the 

 heart of a number of the problems I see with BPA. 



Ms, Hickey. The report you're referring to was actually a process 

 evaluation of this whole period of experimentation that occurred in 

 the 1991-1992 period. So it was something that we commissioned 

 because we went out and had a billing credit solicitation without 

 reviewing a policy that had been longstanding. 



We had an agreement with our customers that we'd just try it. 

 So it was the Nike "Just Do It" theme. We went forward with the 

 competitive bid. We purchased an unsolicited proposal and we tried 

 some different things in the conservation arena. So before we so- 

 Udified what the future was going to be like, we wanted a very 

 hard-hitting, solid evaluation of how we had done. 



And even if you've just read the executive summary of that re- 

 port, you get a strong sense that we didn't do all that brilliantly. 

 In our most recent round of billing credits, I think we've addressed 

 the hon's share of those concerns. They were principally about long 

 timeframes to put together solicitation proposals, to evaluate, and 

 to negotiate. 



We've now benchmarked against the best participants in that 

 study and our billing credits negotiations evaluation will be in a 2- 

 to 3-month timefi*ame, not a 12-month timefi-ame. We've reduced 

 our team sizes in these negotiations from 10-15 folks to 3-5. 



Particularly on the environmental risk side, since you referred to 

 that, we had been unwilling to adopt previous environmental im- 

 pact statements that were over 5 years old. This time we're offering 

 to the utility that they can accept that risk if they wish and we'll 

 back that environmental document and try to make that succeed, 

 but they realize that we think there's some risk to that. 



With respect to the overall question of risk, it's 



Mr. DeFazio. My understanding was you had a particular con- 

 cern, not just about BPA and dealing with NEPA and other acts. 

 You're feeling now that that is adequate if there has been review; 

 if it has been signed off on by the federal agencies, you're not going 

 to feel compelled to go through a whole initial review process and 

 deal with the Department of Energy. 



Ms. Hickey. That's correct. We've been placed on notice by the 

 Department that any environmental impact statement that's older 



than 5 years old is suspect and if questions are raised 



Mr. DeFazio. But if it's less than 5 years old? 



