TABLE 3 American Manufacturers of EHV Equipment I. Definition as contained in statement on the floor of the II. Transformers General Electric Company Westinghouse Corporation McGraw Edison Company Power Circuit Breakers Highvoltage Circuit Breakers Inc. Brown Bovari ASEA Shunt Reactors General Electric Company Westinghouse Corporation Definition as contained in Statment of Managers, Conference Report on H.R. 2959. Transformers General Electric Company Westinghouse Electric Corp. Mc Graw Edison Company Federal Pacific Electric Porter ASEA Power Circuit Breaker High Voltage Circuit Breaker Inc. Brown Bovari ASEA Series Capacitor Banks Westinghouse Electric Corp. General Electric Co. Relays ASEA Westinghouse Electric Corp. General Electric Co. Tapered Tubular Steel Structures or Structural Units C-E American Pole Power Interprises ITT Meyer 57-567 0-86-20 BASIN ELECTRIC POWER COOPERATIVE Chairman HATFIELD. The Senator from North Dakota? Senator BURDICK. Mr. Clagett, what is the term of the contract between the Basin Electric Power Cooperative that sends considerable power to the California area? What is the duration of the contract? Mr. CLAGETT. It is a 5-year contract, Senator. Senator Burdick. Everything is in order now, I presume? ADDITIONAL PREPARED QUESTIONS FOR THE RECORD Chairman HATFIELD. Before we conclude, Senators Kasten and DeConcini have submitted some questions for the record. Without objection, those questions will be included in the record at this point. [The questions and answers follow:] QUESTIONS SUBMITTED BY SENATOR KASTEN EHV Equipment Question: I would like to know how many U.S. companies are currently competitive in the extra high voltage (EHV) equipment market. It is my understanding that the current "Buy American" restriction on EHV equipment gives General Electric a monopoly on Federal EHV procurement. I would like your response to this situation. Answer: I would like to insert a table for the record showing domestic EHV manufacturers. Question: One of the EHV manufacturers directly affected by last year's Buy American restriction is ASEA, a multinational company with significant operations in Wisconsin. I think it is important to point out for the record that the Buy American provisions will actually hurt about 1,000 Wisconsin workers. Have you had experience with ASEA's products? Are they competitive with those of other manufacturers in terms of price and quality? Answer: Yes, ASEA has submitted proposals for PMA equipment procurements which have been consistently competitive in terms of price, quality and technology. Question: How will the Buy American restrictions affect procurement by your agency? Will you have to pay more for EHV equipment? Are you likely to have fewer companies making bids? Answer: It is too early to determine specific impacts of the Buy American restrictions. Section 506 of Public Law 99-141 provides a limited 1-year opportunity favorable to domestic manufacturers by increasing the bids of foreign manufacturers by up to 25 percent for bid evaluation purposes. We believe that increases the incentive for domestic manufacturers to bid during this one year period. However, the Administration objected to this statutory approach because history has shown that the passage of such legislation would do more harm than good to the American economy. This is still the Administration's position. Recently Commerce Secretary Baldridge communicated this position in testimony before the Congress. Since this time last year, the price of the dollar has fallen 39 percent against the Japanese yen; 38 percent against the Swiss franc, and 22 percent against the Swedish krona. The Administration is very encouraged by this development and is hopeful that this enhancement to the competitive position of the domestic EHV industry will obviate the need for continuation of the special one year consideration provided the domestic EHV industry in the FY 1986 Energy and Water Development Appropriation Act. Question: If the Buy American provisions are continued another year, how much will it cost your agency (the U.S. taxpayer)? Can you project the costs if this provision were extended for another five years? Ten years? Answer: We have not performed any detailed studies of the short or long range cost impacts of increasing the Buy American differential on future procurements. However, one simple calculation which indicates the possible impact is if you take the amended Buy American differential of 25 percent less the historic Buy American differential of 6 percent, this would equal a 19 percent cost impact. QUESTIONS SUBMITTED BY SENATOR DECONCINI Defederalization Το Question: I am very concerned that the current move to privatize the Power Marketing Administrations would be a decision entered into in haste only to repent in leisure. what extent do you have documentation and cold hard facts to support the contention that the American public and customers who now depend upon this power will be at least as well off as they are currently? Answer: The Department has established initial task groups to study PMA defederalization. These groups will establish key policy issues including the structure of proposed sales, legislative issues, public process, protection of employee rights, regional economic concerns, and implementation management. The facts to support an equitable transaction will be developed in an open process designed to: seek a fair return to the Federal taxpayers from the defederalization of power marketing administration assets, recognize the benefits currently enjoyed by existing customers and other interests, recognize and provide appropriate protections for the personnel benefits of Federal employees, and promote efficient use of scarce and valuable energy resources. Question: Do you have documentation or proof to show that specific savings would occur? What are those savings? Answer: The savings associated with the defederalization of the power marketing administrations emanate from the efficiency gains associated with allowing the operating and resource allocation decisions of these commercial organizations to be disciplined more directly by the marketplace or by state or regional authorities that can better protect local interests. The Administration believes that the operating and resource decisions of these regional organizations should not be decided in the political context of the Federal budget process. It is, of course, difficult to place a precise estimate on the value of these benefits, however, we are confident that these efficiency gains will be achieved if we can accomplish the Federal divestiture of these assets. Hoover Power Rates Question: As you know one of the issues now before the Western Area Power Administration is to determine the new regulations governing the rates for Hoover power. please tell me the status of that effort? Could you Answer: Subsequent to the enactment of the Hoover Power Plant Act of 1984, Western proceeded expeditiously to prepare and publish the necessary notices to ensure that the benefits to Western's customers would be assured while maintaining the |