85 



FY 1996, Bonneville will make an initial annual settlement payment directly to the Confederated 

 Tribes of the Colville Reservation of about $15.3 million, pursuant to the Confederated Tribes of 

 the Colville Reservation Grand Coulee Dam Settlement Act, Public Law 103-436 



Due to the capital intensive nature of Bonneville's role as a wholesale electric utility, reliable and 

 cost-effective sources of capital are critical to the success of Bonneville's mission. A vital factor to 

 this success in the next decade will be Bonneville's ability to respond in a timely and flexible manner 

 to unforeseen risks and new opportunities, while also providing for program and rate stability To 

 be successful, Bonneville will need to maintain reliable and cost-effective capital fbnding through 

 the U.S. Treasury. Using current capital program estimates, the borrowing authority limit 

 established by the 1974 Federal Columbia River Transmission System Act ($1 .25 billion) and 

 increased by the 1983 Energy and Water Development Appropriations Act (an additional 

 $1.25 billion, for a total of $2.5 billion), will be reached during FY 1998, absent further action. 

 This borrowing authority may be used for all Bonneville investments, including new transmission 

 line development and system replacements, fish and wildlife facilities, and direct funding of Bureau 

 of Reclamation and Corps of Engineers additions, replacements and improvements An additional 

 amount of borrowing authority was established by the 1980 Pacific Northwest Power Planning Act 

 to fund conservation and renewable energy investments ($1 25 billion, for a total Bonneville 

 bortowing authority limit of $3.75 billion) Using current conservation capital program estimates, 

 this limit will not be reached until after FY 2000. 



Almost one third ($1,01 1 .8 million) of Bonneville's FY 1996 budget is earmarked for the gross cost 

 of the Residential Exchange Program. The 1980 Pacific Northwest Power Planning Act established 

 the residential exchange in order to extend the benefits of the Federal power system to all residential 

 and small farm electric power consumers in the Pacific Northwest. The gross cost of the 

 Residential Exchange Program is offset by revenues from the exchanging utilities of $808.0 million, 

 resulting in an estimated $203.8 million net cost of the Residential Exchange Program in FY 1996 



The FY 1996 budget also provides $158.1 million in direct obligations for transmission services, 



$79 9 million for environmental and fish & wildlife activities, $73.5 million for conservation resources, 



and $265.3 million for power marketing, scheduling, and spot power purchases. 



MITCHELL ACT HATCHERY FUNDING 



Legislation that modifies 16 U.S.C. 755-757, is proposed to authorize Bonneville to fund the 

 operation and maintenance of "Mitchell Act" facilities through the transfer of fijnds to the 

 National Oceanic and Atmospheric Administration (NOAA). Curtently, the NOAA is 

 responsible for funding these facilities. Under this change, the region is provided an increased 

 role in the management of these hatchery facilities in order to better protect fishery resources 

 affected by dam construction. The additional cost of $14.1 million per year for FY 1996-2000 is 

 included in the President's Budget as a negative appropriation transfer to NOAA Revenue 

 estimates have also been assumed to increase to cover these proposed additional costs 



DIRECT LOANS FOR CONSERVATION 



As part of reinvention, Bonneville is reaffirming its conservation goals and substantially changing 

 the way it approaches acquiring conservation The Draft Business Plan supports the Northwest 

 Power Planning Council's goal for regional cost-effective conservation and focuses on 

 decentralizing the region's conservation efforts by 1996. Much of the direct responsibility for 

 meeting the Northwest Power Planning Council's conservation goals will shift to our customers 

 A direct loan program is an important transition tool for meeting the Northwest Power Planning 

 Council's conservation goal and for helping to assure Bonneville's competitiveness The loan 

 program will provide a return of fiinds to Bonneville for its conservation services while at the 

 same time helping utilities meet their conservation targets established in the Northwest Power 

 Planning Council's Plan. Part of the conservation goal will still be met by Bonneville funded 

 programs that aim for electricity savings on a broad scale. 



