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By focusing BPA along three comparatively distinct lines of service, it will be easier to identify 

 specific services that BPA should provide, programs that it should fund, and services or programs 

 that can be revamped or assigned to other industry participants. Similarly, tying essential 

 activities such as funding for fish and wildlife restoration in as part of broader services such as 

 FBS power marketing will improve the accountability, efficiency, and results in each area. This 

 basic approach also establishes a structured means for determining the extent to which specific 

 BPA services should be bundled or unbundled to best meet customer needs. In turn, it will make 

 it possible for each customer to enter into contracts with BPA for each of the three basic services 

 it wants to purchase and on terms and conditions that reflect an appropriate level of commitment 

 by each party to the agreements. Finally, the PGP recommendations establish clear guidelines 

 for designing and setting BPA's rates. 



PGP Comments on Repayment Proposals and BPA as a Government Corporation 



The Clinton Administration's Report of the National Performance Review the "Reinventing 

 Government' initiative, has recommended that the Department of Energy work with BPA to 

 restructure the financing of BPA's federal debt. It would allow BPA to issue bonds at market 

 rates and use the proceeds to pay off its debt to the federal government. This recommendation 

 is based on the premise that low interest rates on the existing loans to Power Marketing Agencies 

 such as BPA have created undesirable federal subsidies and PMA rates that are "too low". The 

 Clinton Administration's proposal, along with BPA's proposal to change its organizational 

 structure to a government corporation raises, a number of questions and concerns for the PGP. 



The PGP is opposed, as it has been in the past, to any effort to accelerate repayment of BPA's 

 federal debt that would directly or indirectly raise the rates that BPA charges to recover its costs. 

 If BPA were to go to the private market to issue bonds to repay its federal debt, the PGP would 

 want to look closely at how the actual value placed on the federal debt would be calculated. 

 Specifically, the face value of the debt should be adjusted to its net present value based on 

 existing interest rates and the established repayment periods. In addition, the debt must include 

 all of BPA's existing appropriated debt. Finally, we would want clear limits placed on the types 

 of new debt that BPA would incur—for example to prevent it from borrowing money without 

 adequate review and approval by its customers and Congress. 



PGP would also want to closely review the upcoming DOE proposal regarding restructuring of 

 BPA as a government corporation. Again, we are concerned that sufficient oversight of BPA 

 continue to exist. Under the existing structure, BPA's customers maintain a level of influence 

 over BPA through the annual Congressional appropriations process. As yet, it is unclear to the 

 PGP how Congress, and in turn BPA's customers, would be able to adequately provide guidance 

 for BPA's budgetary decisions. An additional advantage of the existing arrangement is that 

 Congress provides a forum for all parties with an interest in BPA to express their views and 



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