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etc. — as well as farms and small businesses that make up a rural, small- town 

 way of life. Both are key to the fabric of the Northwest. 



Also on the list of principles that PNGC believes are central to the success of any 

 debt buyout proposal is that the transaction should cover only Bonneville's 

 existing appropriated debt, should refinance that debt through private markets, 

 fiuid should not include new borrowing authority from private sources . The 

 Northwest Power Act of 1980 sets out a very fragile balance of authority driving 

 regional energy decision making processes . One key element is the ability of 

 Congress to provide oversight on all new borrowing decisions. PNGC believes 

 that the Congressional oversight role serves BPA and the region well and, 

 accordingly, opposes any large scale move to allow Bonneville independent access 

 to private markets for new debt. 



However, private markets hold distinct advantages over Treasury borrowing 

 when it comes to refinancing existing appropriated debt . A public debt for pubUc 

 debt exchange would Likely be viewed as a "smoke and mirrors" paper transaction 

 that in no way reduces demands on the Treasury or guarantees that future 

 Administrations would not seek to alter new PMA debt terms. Alternatively, 

 private refinancing of BPA debt would offer a clear reduction of public debt while 

 also settling, once and for all, any debate over existing debt terms. 



The willingness of private market sources to buy revenue bonds underscores 

 BPA's credit worthiness and points out what should be obvious -- that BPA's 

 customers have been and will continue to pay for these project in full, both 

 principle and interest. Which brings up an interesting point -- who owns the 

 projects after they are paid for. While the customers will have paid for them in 

 full, as well as bearing ongoing operations and maintenance costs, the principle 

 of preference has dictated that they be held for the benefit of the public ~ 

 defined as public preference customers. 



I am not here to make a pitch that public utilities should be given full ownership 

 of those projects. However, some have suggested that, in mainta inin g title to the 

 projects , the Federal government may want to continue charging for their use 

 through some type of "rent" or "falling water" charge. These types of schemes 

 are patently unjust and ignore the contributions of regional rate payers in paying 

 for these projects. 



Government Corporation Status 



In an effort to enhance BPA's ability to meet the needs of an increasingly 

 competitive energy market , Bonneville Administrator Randy Hardy has initiated a 

 series of broad reforms that include a function by function review, the creation of 

 a BPA marketing plan, and advocating true government corporation status. Mr. 

 Hardy and BPA should be commended for attempting to reshape Bonneville into a 

 leaner, more efficient agency that is more cost effective and responsive to the 

 needs of its customers. PNGC and most customer groups are supportive of these 

 changes, but have reserved the right to condition that support on the details of 

 final proposals . 



Government corporation status is a good example. It is clear that, released from 

 the constraints of civil service and government procurement rules, Bonneville 

 would have far more flexibility to provide better service at a lower cost. I have 

 no reason to doubt Bonneville's claim that DOE regulations alone cost them over $6 



