107 



33 



underwsy with some of the utiUties and as opportunities for customer capital 

 financing are fiirther defined, assumptions in the budget may be revised. 



Utility/ 

 Organization 



1. TacomaPUD 



2. Clark PUD* 



3. Seattle City Light 



4. Grant PUD 



5. Emerald PUD 



6. EWEB 



7. CARES 

 8 OMEU 



* Proposal withdrawn 



Question 3 : Which capital financing methods have the least impact on electric rates over 



the short term? Over the long term? 



Answer: Capital investments may be financed either through long-term borrowdng or 



directly through revenues generated firom current rates. When capital 

 investments are financed through long-term borrowing, the impact on near- 

 term rates is minimized through annual debt service payments of principal and 

 interest that are spread over a number of years. Because fiinding of capital 

 investments through long-term borrowing involves the payment of interest 

 charges on the fiinds borrowed, over the long-term, total payments are higher 

 than they otherwise would be if financed directly through revenues. Thus, over 

 the long-term, investments fiinded through revenues will tend to lower the 

 upward pressure on electric rates due to the fact that the accumulation of 

 interest charges is avoided. 



EPA is pursuing the use of cost-effective third-party financing sources to the 

 greatest extent feasible to provide capital financing. Feasibility is determined 



