Note: Text Only Example.

April 10, 1997

Mr. Randall W. Hardy
Chief Executive Officer
Bonneville Power Administration
U.S. Department of Energy
P.O. Box 3621
Portland, Oregon 97208

Dear Mr. Hardy:

As I am sure you are aware, the Commerce Committee is examining the question of whether or not the Congress should enact legislation concerning the electricity industry. This is a complex policy area, and it is important to have as full an understanding of the facts as possible before the Committee reaches any decisions.

In order to gain a better understanding of the relevant issues, I would appreciate your answers to the following questions. To ensure these are received on a timely basis, please provide your response by May 9, 1997. Please feel free to skip a question if you do not have enough information to answer it. Also, please feel free to send any additional comments you may have on these issues.

1. How has increased competition in wholesale electricity markets affected your business? To what extent has the Bonneville Power Administration (BPA) benefitted and to what extent have you been disadvantaged?

2. What plans does BPA have for responding to the challenges posed by increased competition in the electric industry, including the possibility of retail competition? Have any states in your region adopted or are they considering retail competition plans? How might state action affect your business?

3. Do you believe Congress needs to modify the federal authorities applying to BPA? If so, please explain why and how.

4. The Bonneville Power Administration currently pays all of the costs associated with Washington Public Power Supply System (WPPSS) reactors WNP1, WNP2 and WNP3. Only WNP2 was completed. If the market price for electricity is lower than BPA's cost of producing power in 2001 when most of its current power sales contracts expire, BPA could have a significant stranded cost problem. If this occurs, who should pay such costs -- the federal Treasury, WPPSS bondholders, or Northwest entities on whose behalf BPA incurred its WPPSS obligations? What mechanism should be used to address such stranded costs?

5. If Congress were to enact legislation mandating retail competition by a date certain, what impact might this have on your activities?

   a. Please address the general impact of such legislation. Would legislation authorizing the states to resolve stranded costs issues be beneficial or not, and what if any risks might it pose for the federal taxpayer?

   b. If Congress were to enact retail competition legislation, are there any unique circumstances affecting BPA that should be addressed? Should existing statutes be modified as part of any such bill?

6. To what extent is your transmission system required to operate under the same rules as privately owned utilities? Although you are not required under current law to comply with Order 888 and other similar FERC directives, have you taken any voluntary steps to comply? If so, please explain why.

I realize preparing a response to these questions will take time and effort on your part. I appreciate any help you can provide in furthering my understanding of the important issues involved in the ongoing debate on restructuring the electric power industry. Should you have any questions, please contact Sue Sheridan, Minority Counsel, at (202) 226-3400. Your response should be sent to:

The Honorable John D. Dingell, Ranking Member
Commerce Committee Democratic Office
564 Ford House Office Building
U.S. House of Representatives
Washington, D.C. 20515

With every good wish.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER

Back to the Electricity Restructuring Home Page