101 



I would like to take the opportunity today to talk about two pro- 

 posals that are the subject of this hearing, one of which has been 

 introduced as part of the President's deficit reduction package that 

 has to do with bu3ang out the appropriated debt of Bonneville, in 

 a manner which settles, we hope, the prolonged debates on repay- 

 ment reform that continue in the region. The other proposal hasn't 

 found its way over to OMB for review but is under review in the 

 Department of Energy right now. It has received a fair amount of 

 discussion in the region, and that is a proposal to make Bonneville 

 a government corporation. 



Both of these proposals are taking place against a background of 

 increasing challenges to Bonneville's competitiveness, as we de- 

 scribed in the hearing you held in Eugene last month. The utility 

 industry is being deregulated. We are looking at a change in cir- 

 cumstances in this industry in the next 5-10 years very similar to 

 what the airlines, the phone companies, and others have gone 

 through in the last 10 years, and that presents some unique chal- 

 lenges to us. 



In that context, the buyout proposal that has been made by the 

 administration with the full participation of Bonneville in those 

 discussions is designed to try to settle the ongoing disputes that 

 started in the early 1980s surrounding the perceived subsidy asso- 

 ciated with Bonneville's repayment obligations to the U.S. Treas- 

 ury. 



The nature of the proposal essentially is this. Bonneville has 

 roughly $7 billion worth of outstanding appropriated debt. The 

 chart to your right shows how that is broken down. 



[The chart follows:] 



