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BONNEVILLE TREASURY PAYMENTS 



In keeping with this Subcommittee's direction, one of our most important priorities is to assure 

 that Bonneville's payments to the U.S. Treasury are made in full and on time. During FY 1994 

 Bonneville made its full armual Treasury payment of just under $700 million for the eleventh 

 straight year. 



At the close of FY 1994, Bonneville's cumulative principal and interest cash payments on the 

 taxpayer's investment in the Federal Columbia River Power System totaled about $9 billion, of 

 which $6.29 billion has been for interest and $2.61 billion has been for principal The total 

 Federal investment yet to be repaid as of the end of FY 1994 was $10. 1 billion. 



In spite of the difficulties we continue to experience, we anticipate, based on our end of First 

 Quarter FY 1995 estimates and receipts, being able to make our FY 1995 Treasury payment of 

 over $1 billion in full and on time. About $1 56 million of this payment results from the early 

 retirement of debt with receipts from the sale of capacity to non-federal participants in the Third 

 Alternating Current Intertie. 



DEBT FINANCING STRATEGIES 



Through the Draft Business Plan, Bonneville is exploring initiatives with its customers and 

 constituents to reduce its level of debt financing in order to both delay the exhaustion of the 

 borrowing authority caps and improve Bonneville's debt-equity position. The initiatives are to 

 identify additional reductions in capital spending through the application of a capital budgeting 

 process, revenue finance about $30 million in capital investments each year beginning in FY 1996; 

 to the extent allowable, shift costs from the Transmission/Fish and Wildlife borrowing authority to 

 the Conservation borrowing authority, and utilize third-party financing of capital investments 

 when possible. 



The Senate Committee on Appropriations, in its 1995 report on the Energy and Water 

 Development Appropriation Bill, requested that Bonneville present a preferred strategy for 

 rectifying its high degree of financial leverage. Bonneville addressed this concern through the 

 development of the capital spending initiatives mentioned above and through reductions in capital 

 spending developed in its Draft Business Plan. The draft plan and the FY 1996 Congressional 

 Budget submittal included a reduction in capital spending of about 32 percent for the period 

 FY 1996-2002, compared to the FY 1995 Congressional Budget submittal. To remain 

 competitive in the current business environment, Bonneville will vigorously pursue any additional 

 opportunities for further reductions in capital spending that may arise. 



FISCAL YEAR 1996 BUDGET IN BRIEF 



Since its programs are funded by sales of power and associated services, reimbursements, and 

 proceeds of bond sales to the Treasury, Bonneville has not requested or received annual 

 appropriations. Bonneville's FY 1996 budget estimates total obligations of $3,496 million and 

 capital transfers/debt reduction of $200.8 million. 



In support of Bonneville reinvention goals, the agency has modified portions of the expense side 

 of its budget structure to simplify programs and more closely align programs to the responsible 

 organization structures. The budget has also been summarized in the old structure to assure 

 continuity with the Congressional Committees during the transition period. Structural changes to 

 Bonneville's capital budget program include combining Transmission System Development with 

 Transmission System Replacements to create a unified Transmission Services program. The 

 environmental capital components of the former Transmission and Replacement Programs have 

 been combined with Fish and Wildlife capital investments to establish a comprehensive 

 Environmental Fish and Wildlife program. Marketing, Conservation and Production incorporates 

 Energy Conservation and Renewable Resources investments Operating expense program 

 structural changes include combining the traditional Energy Resources, Power Marketing and 

 Scheduling into a combined Marketing, Conservation and Production. Transmission Services 

 expenses combine System Maintenance and Operations with Engineering 



