74 



bonded debt is based on rates prevailing at the time the 

 bonds were issued, and has not been the subject of 

 controversy. 



Our Association has not taken a position on 

 whether there should be an increase in BPA's borrowing 

 authority at this time. We understand that BPA projects 

 that it will reach the ceiling on its present borrowing 

 authority by 1997. In order to plan for the future, 

 Bonneville should know soon whether or not its borrowing 

 authority will be increased. However, the question of 

 refinancing BPA's existing appropriated debt should not 

 be clouded with the issue of increasing Bonneville's 

 borrowing authority. Unless there is some overriding 

 urgency, this matter can be dealt with separately, and 

 should be considered in the light of available 

 alternatives. 



3. In general, please discuss yo\ir views on the 



possibility of changing Bonneville's s'tat:us from 

 that of a federal agency within the Department of 

 Energy to a govemaent corporation. 



Unlike most line government agencies, Bonneville 

 is a business-type operation that has borrowing 

 authority and its own source of revenues from the sale 

 of electricity. Also, characteristic of electric 

 utilities, BPA requires a relatively long lead time for 

 planning purposes. Bonneville therefore should have the 

 flexibility to operate in a business-like manner, freed 

 of some of the restraints and overlapping 

 responsibilities imposed upon it as part of a government 

 department. For these reasons, we generally support the 

 concept of converting BPA to a government corporation. 

 However, this proposal is not yet in legislative form, 

 and many of the details on the operation of such a 

 corporation have not been specified. We therefore 

 reserve more definitive comment until we have had an 

 opportunity to study the details of this concept. We 

 believe that any proposal should adhere to the following 

 principles; 



a. It should not alter the organic statutes under 

 which Bonneville presently operates, such as the 

 Bonneville Project Act, the Transmission System Act, or 

 the Northwest Power Planning and Conservation Act. 



b. It should not encompass issues extreineous to 

 that of BPA's organizational structure. 



