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A cornerstone of this eflFort is that Bonneville must improve its eflGciency. Our eflforts are focused 

 on reducing costs, improving customer service, and becoming more flexible in order to respond 

 rapidly to changing market conditions and customer needs. 



Achieving this will require new agency initiatives— and, it will require removal of the barriers to 

 becoming more businesslike. Bonneville was nominated by the Department of Energy to be a 

 government reinvention laboratory. Vice President Gore's National Performance Review Task 

 Force pledged to help cut red tape and remove bureaucratic barriers. This opportunity is timely, 

 compatible with our competitiveness efforts, and will help move our reinvention process forward. 



Debt Restructuring 



Since the early 1980's, arguments over proposals to increase interest rates on outstanding 

 appropriations which financed the Federal Columbia River Power System have been part of the 

 annual budget process. Proposals have been made to restructure repayment of the appropriated 

 debt, including increasing the interest rate on this debt, and repaying the debt on a fixed 

 amortization schedule over the remaining repayment period, rather than the flexible schedule now 

 in use. Current Department of Energy policy allows principal to be repaid at any time before the 

 end of the allowable repayment period. This period is the average service life of the appropriated 

 investment but in no case is longer than 50 years. Interest on the outstanding principal balances is 

 paid annually. As any business would do with a debt portfolio such as ours, we retire higher- 

 interest-bearing debt before lower, provided that we always repay within the allowable period. 

 The result is a level year-to-year repayment stream that optimizes debt service costs for 

 Bonneville's ratepayers. 



Previous repayment reform proposals have involved changes that would make repayment more 

 rigid and more costly to Bonneville's customers. 



