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discuss the principles that should govern any 

 restructuring of Bonneville's debt. 



The Washington Public Utility Districts 

 Association has opposed previous proposals to refinance 

 Bonneville Power Administration's appropriated debt 

 because such proposals, among other things, would have 

 resulted in substantial arbitrary increases in power 

 rates, and would have been detrimental to electric 

 customers and to the economy of the Pacific Northwest. 

 For similar reasons. Congress has repeatedly rejected 

 previous proposals to change the repayment policies of 

 the federal power marketing administrations (PMAs) , 

 including BPA. 



However, representatives of our Association have 

 been working with the Public Power Council on an 

 alternative under which the present outstanding 

 appropriated debt would be refinanced on the basis of 

 its net present value. The refinancing could be done 

 either through the Treasury Department or in the private 

 capital market. We are not prepared to state at this 

 time our preference among these alternatives. Private 

 financing would provide more certainty for the long 

 term, but might be more costly. 



Depending upon the specifics of the plan, the 

 Washington Public Utility Districts Association would 

 support a scheme for refinancing the existing 

 appropriated debt at net present value, provided that 

 it: 



a. Is rate neutral; that is, it would not impose 

 financial burdens on BPA and its customers beyond those 

 required by existing financing; 



b. Results in a deficit reduction; 



c. Does not contain other provisions that would 

 adversely affect BPA and its customers; 



d. Represents a permanent solution to the 

 question of refinancing BPA's appropriated debt; 



e. Would not in any way impair the preference 

 rights of public agencies and rural electric 

 cooperatives, and 



f . Does not diminish present customer involvement 

 in BPA rate procedures. 



