I think we can all confess to the fact that a great deal of frustration has arisen out of the important decisions on the WPPSS financial situation but I think criticism of Don Hodel, in my mind, on this subject is a continuation of the finger pointing which has gone on for several years now which has stymied in many ways a development of real solutions to this regional financial problem.

I don't think it is fair or accurate or logical to try to put the finger on Don Hodel as a person who is responsible for this disaster on the WPPSS projects in the Northwest.

Mr. Chairman, I could utilize much more time which I will restrain myself from doing in giving you the attributes, the record of performance, the outstanding personal character and my total confidence in this man to give the Department of Energy dynamic leadership with special emphasis on conservation and to have an open shop there in which members or those that will oppose him today will be just as welcome to his office for consultation and for information as those whose organizations may support his confirmation.

I am very proud of this Oregonian and I would like to yield to my colleague.

The CHAIRMAN. Senator Jackson suggests, and I concur, that it would be appropriate to hear from the junior Senator from Oregon, Senator Packwood, who is chairman of the Commerce Committee.

STATEMENT OF HON. BOB PACKWOOD, A U.S. SENATOR FROM

THE STATE OF OREGON

Senator PACKWOOD. Mr. Chairman, there is little about the abilities of Don Hodel that this committee doesn't know. They have dealt with him for a long period of time in his capacity when he was at Bonneville and in his capacity now at the Department of the Interior and I don't need to second the comments made by Senator Hatfield or elaborate on the things that Senator McClure has said.

I can bring a personal viewpoint of Don Hodel having known him now for 35 years. He and I were in high school together. We shared the same forensics teacher and the same debates. We split a bit when we went off to college and he went to Harvard and I stayed in Oregon and then we switched in law schools and I went east and he came back to the University of Oregon.

But during all of that time, we kept our acquaintance and we soon joined hands in common political endeavors in the late 1950's and continued that relationship all during the 1960's including belonging to a toastmaster group who had as its singular requirement for membership that you had to be a Republican and active in politics. But beyond that, you could join.

We spent 10 years in that together. I had the good fortune until about 3 or 4 months ago to have my Portland office in the Interior building which houses the Bonneville Power Administration. So, as I would ride up and down the elevators, I would frequently hear the comments of the career employees about the different Administrators that had served and some of these employees had been there since Bonneville had started.

It would be a very unusual comment to find any of them saying that there had ever been a better Administrator than Don Hodel both in terms of his foresight and in terms of his relationships with the employees. I saw him go through some trying times in those circumstances.

I recall specifically the era when some nut was blowing up the Bonneville Power towers and threatening Don Hodel's life at the same time. For a fair period of time, the man was not caught and succeeded in blowing up some towers. Don was under constant police protection.

I remember one night Georgie and I were at their house, just the four of us for dinner, and as we left Don was checking the hood of his car to see if a piece of gravel that he had left on it was still there indicating that the hood had not been opened while we had been having dinner and the possibility of a bomb being planted. Indeed as we left, there was still police security.

Eventually the nut was caught. The way that Don Hodel handled that problem and handled it openly with the press and achieved cooperation from the press at a time when press cooperation was very critical to the catching of the criminal was an incredible act of watching a political appointee deal with the press whose normal inclination is to say everything should be exposed and to see them work in common concert for the ultimate public good. It is a high accolade to his ability.

Georgie and I count Don and Barbara as among our closer friends in this country and in this life. I know that he will have those who will testify against him. I will be surprised if anyone testifies against him as to his personal character or integrity or honor or ability is concerned. I understand differences of opinion. We all have them. We all have in the past, we all have in the future, and that is part of the democratic process.

I can simply say to those who will testify in opposition to Don that they will first find a perpetual open door in his office no matter how hard they may have fought his nomination. Second, they will be, I think, pleased to discover that they have many things that they will agree upon and when they do, they will not have a more tenacious ally than Don Hodel. They will have a number of things that they will disagree on and they will find that they will seldom have a tougher opponent but I think in honesty they would have to say they will never have a fairer one or one who ever did an indecent thing in terms of the battle.

The Government is lucky to have a man of this caliber. I would urge this committee to give this nomination speedy consideration and refer to the Senate floor so the country may have the privilege of this man occupying the office with the full confirmation of the Senate.

Thank you.

The CHAIRMAN. Thank you very much, Senator Packwood.
Senator Jackson.

STATEMENT OF HON. HENRY M. JACKSON, A U.S. SENATOR FROM THE STATE OF WASHINGTON

Senator JACKSON. Mr. Chairman, I will support the confirmation of Donald Hodel as the Secretary of Energy. Having known Mr. Hodel for some 13 years, I know there are many issues on which he and I will disagree but I am also confident that I can carry on a dialog with him and respect if not agree with the logic of his arguments.

In this vein, I am hopeful that Secretary Hodel can restore to the Office of the Secretary two missing but sorely needed qualities. First, national energy policy must be built on something more than mere rhetoric. We need a willingness to rely on reason and competent analysis not just ideology, in facing the energy issues.

Second, as Secretary Hodel is himself a public servant of 10 years Federal service, I think he can restore to the Department a sense of dignity and respect for the career public servants who comprise the agency.

Amidst all the proposals for dismantlement, reorganization, merger, and other terms for DOE's self-destruction we need a manager, a good administrator who can pull the agency back together.

Don Hodel has proven himself to be a capable manager and a reasoning and reasonable man. I look forward to working with him during the next 2 years.

The CHAIRMAN. Thank you very much, Senator Jackson.

Are there any others who wish to make a statement at this time? Yes, Senator Murkowski.

STATEMENT OF HON. FRANK H. MURKOWSKI, A U.S. SENATOR

FROM THE STATE OF ALASKA

Senator MURKOWSKI. Thank you, Mr. Chairman. I am certainly pleased to see Don Hodel sitting before this committee this morning and as a very new member of the Energy Committee, I am somewhat moved at the eloquence of my senior colleagues, Senator McClure, Senator Hatfield, Senator Packwood, and Senator Jackson who have had a long and obviously a very fine relationship with Don Hodel.

I as a new member have had an opportunity, too, to work with the Secretary extensively when he was at the Department of the Interior. In view of the fact that I represent a State that is predominately held by the Federal Government in trust, I think that the significance of our relationship has been truly meritorious.

Considering his experience both at the Department of Interior and prior to that which has been addressed already, I don't believe Mr. Chairman that the President could have made a better choice for the position of Secretary of Energy. I am sure that some of the constituencies that we will hear from this morning may not agree with some of the policies the Secretary might be expected to pursue, but I don't believe based on my experience and that of other people from our State, they can dispute the sincerity, the dedication nor the willingness to listen to various diverse points of view.

Mr. Chairman, I am certainly looking forward to the confirmation of Mr. Don Hodel. Thank you.

The CHAIRMAN. Thank you very much. Are there any others? [No response.]

The CHAIRMAN. If not, our first witness is Senator Max Baucus from the State of Montana. Max, you are always welcome before this committee.

STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM THE STATE OF MONTANA

Senator BAUCUs. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, I appreciate very much this opportunity to testify on the nomination of Mr. Hodel to be Secretary of Energy particularly following the remarks of Senators mentioned by Senator Murkowski of Alaska. I know Senator Hatfield, Senator Packwood, Senator Jackson, and you, Mr. Chairman, have had deep personal relationships with the nominee. I respect that very much.

In addition to those statements, Mr. Chairman, as a representative of a State in the Pacific Northwest and because of Mr. Hodel's association with the BPA, I am particularly interested in his nomination as Secretary of Energy.

As you know, I have expressed strong reservations about the nomination to the committee. I want to encourage you not to miss the opportunity provided by these hearings to address once and for all the questions that are being raised by me and other witnesses throughout the day.

No one should doubt that this nomination is controversial. As evidence, I can point to substantial interest in my home State. Around the region, editorial opinion is divided-with_such major newspapers as the Seattle Post-Intelligencer and the Idaho Stateman having expressed opposition.

I want to emphasize that the questions and issues I raise today are not intended as personal charges against Mr. Hodel. I met with him yesterday and am convinced that he is a congenial, sincere individual; and I know that colleagues in the region whose opinions I respect are supportive of him. He will be a sincere, relentless spokesman for the Administration energy policy.

Nonetheless, the nomination raises serious questions, some old, some new, questions that I believe we should address before conferring final approval on him.

My interest in the nomination arises from increasing concern that, beginning in the 1970's, BPA acquired a reputation for ignoring many residents of the Pacific Northwest.

Mr. Hodel was Assistant Administrator of the Bonneville Power Administration from 1969 to 1972. He became Administrator in 1972 and served there until 1977. This period proved to be especially troublesome for the region.

It was during this time that BPA accepted without independent verification utility projections that showed imminent shortages of electrical energy. In fact, BPA issued notices of inability to supply power that convinced many cooperatives to sign contracts supporting the WPPSS nuclear plants. Subsequently, WPPSS has proven to be a financial mistake. A combination of cost overruns, demand shortfall, inadequate BPA oversight, and technical problems have

resulted in serious questions about the ability of our region to pay the WPPSS debt.

Throughout this period in the Northwest, there were those who pointed to energy conservation and other alternative energy sources as the lowest cost solution to our problems. Their counsel was not accepted. In fact, they were all too often derogated as extreme obstructionists.

This unfortunate polarization of a region which badly needed a consensus energy policy was driven by remarks from the highest levels of the BPA. I understand that Mr. Hodel has had a change of heart on this matter and I will be interested to hear his views on the Portland City Club speech in this hearing record.

Citizen groups in the region also felt that BPA tended to operate in a secretive fashion, even refusing to release its detailed, contracted energy conservation study that suggested the region could undertake substantial, cost-effective conservation efforts. Some of the same groups were forced to sue in order to obtain public discussion of a dramatically revised BPA role in the region.

In short, the administration of Mr. Hodel at BPA was not an unmixed success. Its legacy is a region seriously divided on energy policy and perilously close to major bankruptcies brought on by the WPPSS mess.

In sum, I would encourage the committee to probe very carefully a number of issues concerning Mr. Hodel's past and future handling of critical energy matters.

First, what was Mr. Hodel's role in the WPPSS nuclear plants? Whoever made the mistakes, we will be paying billions of dollars for them in coming years and a good number of co-ops are likely to go bankrupt because of it. We must learn from the error so it can be avoided in the future. What could Mr. Hodel have done differently and what was learned from that experience?

Second, what future role does Mr. Hodel intend to play in the resolution of WPPSS? Does he have any suggestions on how we can get out of the mess?

Third, has Mr. Hodel any observations on the unfortunate polarization of the region's energy debate, spurred in significant part by his own remarks while administrator of the BPA? How will these things be different as he moves to head the Department of Energy?

Fourth, has Mr. Hodel any plans to press energy conservation at a vigorous pace, or are we to treat energy conservation simply as a passing fad? What specific changes might be expect in DOE's pursuit of energy conservation?

Fifth, did BPA suppress the 1976 Skidmore, Owings, Merrill Energy Conservation study? Did the agency compare utility forecasts with other available forecasts such as that compiled by the 1975 Washington State University forecast? We know the forecasts accepted by BPA were too high and that this has caused significant problems. The question is whether BPA made a solid effort to determine the quality of power forecasts before committing the region to a very expensive series of nuclear investments.

Sixth, I urge the committee to seek written testimony from those public utility districts that are now suing BPA. They are alleging that BPA coerced them into financing the WPPSS plants. Were they, in fact, unduly pressured?