Synopses & Reviews
Synopsis
Excerpt from Bpa Proposals, Vol. 5: Oversight Hearing Before the Task Force on Bonneville Power Administration of the Committee on Natural Resources House of Representatives, One Hundred Third Congress, First Session on Proposals to Allow Bonneville to Buy Out Its Appropriated Debt and That
Any debt restructuring proposal needs to include the following basic principles.
One, we need ample assurances that any debt restructuring would not overburden the ratepayers or push higher debt on future generations.
Two, any restructuring would provide a permanent solution. We don't want to revisit this constantly, as has been in the past.
And three, the repayment period for the debt should not exceed the useful life of the capital investments.
Our analysis indicates that the current proposal meets all three of these principles. We support Bonneville's intent to adhere to the 10-year financial plan, and to maintain adequate financial reserves to ensure repayment of outstanding debt. If revenues do fall or do fail to sustain adequate reserves, then Bonneville's current pro posal for an interim rate adjustment is a prudent response.
Although Bonneville's capital spending program does not impact rates as much as current operating expenses, it is a key to long term competitiveness. Bonneville has announced a program to con tain costs, seek efficiencies and become more competitive. We be lieve this program, coupled with decisions in the current rate case, will delay the need to increase Bonneville's borrowing.
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