investment and assure Bonneville's environmental responsibilities are carried out 

 faithfully. 



Alternatives to Repayment Reform 



Previous administrations have consistently supported proposals for accelerating 

 Bonneville's repayment of the federal investments in Northwest hydropower facilities in 

 a manner which would do significant harm to the region's economy. This 

 Administration, through the National Performance Review, has proposed a bold new 

 alternative to repayment acceleration. This proposal would allow the restructuring of 

 Bonneville's federal debt. Under this proposal, Bonneville would pay the net present 

 value (about $4 billion) of its relatively low-interest appropriation debt (totaling 

 approximately $7 billion) as an up-front, lump-sum cash payment in return for 

 eliminating any future payments forever. Bonneville would finance the $4 billion at 

 current market interest rates, and believes they can do this without a rate increase. 



This proposal has many advantages for the taxpayer and for the Northwest ratepayer. 

 It turns what in the private sector would be referred to as a note receivable into cash, 

 thereby improving the liquidity of the federal government. It assures that Northwest 

 ratepayers will make prompt and regular payments on the debt. It aids the Northwest 

 economy by resolving a key uncertainty about future electric power rates. Finally, it 

 gives Bonneville's customers greater certainty about Bonneville's costs, thereby making 

 it less likely they will leave the system. 



