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opportunity to borrow money from the private financial markets to refinance appropriated debt. 

 Such refinancing should eliminate a contentious and recurring political issue. 



If such a refinancing is to take place, it must be done in a manner that is not detrimental 

 to the customers. This means, first and foremost, that a refinancing of appropriated debt must 

 not increase Bonneville's rates. Given the fragile state of the Northwest economy, there would 

 be no customer support for a refinancing of appropriated debt that would increase Bonneville's 

 rates. 



Second, Bonneville's access to private financial markets must be Umited to a refinancing 

 of appropriated debt, and should not include new borrowing authority from private financial 

 markets. Refinancing Bonneville's appropriated debt will remove the existing political issue of 

 low interest rates. Since future Treasury borrowings will be at essentially market interest rates, 

 this political problem should not recur. Giving Bonneville access to private financial markets for 

 future borrowings is neither necessary nor desirable to solve this political problem. 



Third, resolution of the appropriated debt issue does not require a revision of 

 Bonneville's current debt cap. Including unnecessary and extraneous matters will only 

 comphcate the effort and should be avoided. Bonneville's debt cap does not need revision at this 

 time, and prematurely doing so will remove a strong incentive for Bonneville to exercise fiscal 

 discipline. 



In summary, the Western Public Agencies Group supports a one-time authorization 

 permitting Bonneville access to the private fmancial markets to refinance appropriated debt, if 

 such refinancing can be achieved without a rate increase to Bonneville's customers. 



Changing Bonneville's Status 



Changing Bonneville's status from a federal agency to a government corporation would 

 alter the way Bonneville conducts business in a number of ways. It would reduce Bonneville's 

 administrative burden by eliminating numerous reporting requirements. It would remove certain 



