Mr. DeFazio. Thank you. 



STATEMENT OF TED BOTTIGER 



Mr. BOTTIGER. Thank you very much, Mr. Chairman. My name 

 is Ted Bottiger and I am the chairman of the Northwest Power 

 Planning Council. We wish to thank you and the task force for the 

 opportunity to put our views in the record and to answer any ques- 

 tions you might have about the region. We have some written testi- 

 mony, as is the custom, and I would ask that that be considered 

 by the committee. 



Mr. DeFazio. No problem. It will be entered in the record with- 

 out objection. 



Mr. Bottiger. This is a timely time for Bonneville and for the 

 region, and as it has already been mentioned, rate increases that 

 have gone into effect. We are here to discuss the ways that Bonne- 

 ville can be more competitive, more of an assistance to their cus- 

 tomers and to the Pacific Northwest, and we are here to talk about 

 the issues that are before your task force. I would like to preface 

 this with the understanding that with the exception of the debt 

 buyout language, we have seen drafts of legislation and have not 

 had a chance to analyze them in detail. 



Mr. Hardy has been very cooperative in giving us what he can 

 at the time, and we are trying to advise our governors of the im- 

 pacts of these proposals on the region. Yesterday, I saw for the first 

 time a draft of the corporation language. 



As we have for the past 10 years, we continue to oppose dramatic 

 repayment changes that would cause unnecessary rate increases 

 and jeopardize Bonneville's competitiveness. However, today's rel- 

 atively low interest rates offer a window of opportunity to refinance 

 or buy out some of Bonneville's existing promoted investment. 



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. 



While the council supports adequate federal borrowing levels, we 

 continue to push for increased use of cost sharing and third-party 

 debt financing, particularly tax-exempt financing by local munici- 



