68 



Mr. DeFazio. Thank you. 

 Mr. Johnson? 



STATEMENT OF STEPHEN F. JOHNSON 



Mr. Johnson. Mr. Chairman, members of the task force, I am 

 Stephen F. Johnson, executive director of the Washington PubUc 

 UtiUty District Association. I appreciate the opportunity to testify 

 today, and I appreciate the participation with this committee of 

 Representative Kreidler from Washington State. 



Washington State purchases two-thirds of the output of the Bon- 

 neville Power Administration and the PUDs are the biggest single 

 customer collectively of Bonneville. And so his involvement with 

 this commitment we very much appreciate. 



The Washington PUDs are keenly interested in the proposal to 

 alter Bonneville's current repayment formula, and we are aware 

 that the Clinton administration is sending to Congress legislation 

 on refinancing BPA's debt. 



The PUD associations support a scheme for refinancing the exist- 

 ing appropriated debt at debt present value that is consistent with 

 the following principles: It is rate neutral, that is, it would not im- 

 pose any financial burdens on BPA and its customers beyond those 

 required by existing financing. It results in a reduction of the fed- 

 eral deficit. It does not contain other provisions that would ad- 

 versely affect BPA and its customers. And it does not allow addi- 

 tional change in BPA debt repayment terms to be made in the fu- 

 ture. This is the guarantee that will be placed in the customer 

 power sales contracts. 



We commend you, Mr. Chairman, Speaker Foley, and other 

 members of the delegation, and the Clinton administration for de- 

 veloping the proposal released this week to resolve this difficult 

 issue in a satisfactory manner. We think this proposal addresses 

 our principal concerns. We are, however, unclear as to the justifica- 

 tion for the $100 million in extra money to increase the sum of the 

 net proceeds, as the legislation says. 



Regarding the question of whether Bonneville's refinancing au- 

 thority should be limited to its appropriated debt, we believe that 

 it should. We understand that the administration's proposal is so 

 restricted. 



We also believe that the question of refinancing BPA's existing 

 promoted debt should not be clouded with the issue of increasing 

 Bonneville's borrowing authority. Unless there is some overriding 

 urgency, this matter should be dealt with separately, and it is an 

 issue that at this time the PUD association has not taken a posi- 

 tion on. 



On the government corporation proposal, we believe Bonneville 

 should have the flexibility to operate in a businesslike manner, free 

 of some of the restraints and overlapping responsibilities imposed 

 upon it as a part of a government department. For these reasons, 

 we generally support the concept of converting BPA to a govern- 

 ment corporation. 



We believe any government corporation proposal should adhere 

 to the following principles. It should not alter the organic statutes 

 under which Bonneville presently operates, such as the Bonneville 

 Project Act, the Transmission System Act, and the Northwest 



