130 



The repayment studies are based upon year-by-year forecasts of 

 system revenues and costs over the repayment period. Revenues 

 are applied first to pay the costs of operation, maintenance, 

 replacements, and Interest. All remaining revenues are applied 

 to repay the capital Investment In commercial power facilities, 

 and Irrigation assistance as it falls due. Accordingly, there 

 is no annual schedule of capital repayment. The test of the 

 sufficiency of revenues Is whether the capital investment can 

 be repaid within the overall repayment period established for 

 each power project, each Increment of Investment in the 

 transmission system, and each block of Irrigation assistance. 

 Hence, repayment may proceed at a faster or slower pace from 

 year to year as conditions change. Annual operating costs and 

 revenues, of course, may vary from year to year, as they are 

 affected by extremes of weather conditions, streamflows, 

 current economic conditions, changing markets, and the 

 absorption of new projects Into the system. 



H.R. Rep. 1409. 85th Cong.. 2d Sess. 10 <1966); see also . 112 Cong. Rec. 8,423 

 (Apr. 19, 1966) (Rep. Asplnall). 



The current administrative Interpretation, which has Its antecedents In prior 

 policies and historical practice. Is embodied In the Secretary of Energy's 

 order RA 6120.2. The order requires that BPA establish Its rates to repay the 

 Federal Investments properly allocable to power within the average expected 

 service life of the facility or within 50 years, whichever Is less. BPA 

 develops a repayment schedule both to comply with Investment due dates and to 

 minimize costs over the repayment period. Costs are minimized In accordance 

 with RA 6120.2 by repaying the highest Interest-bearing Investments first, to 

 the extent possible. Adherence to this schedule would result in some 

 Investments being repaid before their due dates, while assuring that all 

 Investments will be repaid by their due dates. 



D. The Bonneville Fund Is Available to the Administrator For 

 Expendlturp-: BPA Deems "Necessary or Appropriate," 



Once BPA sets Its rates and earns revenues based on those rates, the revenues 

 are deposited In the BPA fund. Section 11 of the Transmission System Act 

 established in the Treasury of the United States a single fund — the BPA 

 fund— consisting of all BPA receipts from all sources. Including trust funds, 

 bond sales, and power and transmission revenues. 16 U.S.C. § 8381(a). The 

 Administrator has broad authority to make expenditures from the fund so long 

 as they are "necessary or appropriate to carry out the duties Imposed upon the 

 Administrator pursuant to law. . . ." IjL § 8381(b). 



The Transmission System Act also lists examples of purposes for which BPA may 

 expend its funds, Including (1) making such payments to the credit of the 

 Reclamation fund or other funds, or to the credit of miscellaneous receipts of 

 the Treasury as are "required by or pursuant to law to be charged to and 

 returned to the general fund of the Treasury for the repayment of the Federal 

 investment in the Federal Columbia River Power System from electric power 

 marketed by the Administrator," and (2) "making such payments, as shall be 

 required to carry out the purposes and provisions of the Pacific Northwest 

 Power Planning and Conservation Act . . . ." 16 U.S.C. § 838i(b). Priority 

 of payments from the BPA fund are to be made in accordance with the directives 

 of section 13(b) of the Transmission System Act and paragraph 8(c)(3) of 

 RA 6120.2. 



II. Sertlon 4(h)(10)(A) of the Northwest Power Ac t Directs the Adm1n1str3tnr 

 fn ikp the BPA Fund to Protect. Mitigate , and Enhance Fish and HildlifP in 

 thP Columbia River Basin. 



With regard to expenditures authorized from the BPA fund, one of the "purposes 

 and provisions" of the Northwest Power Act is set forth in section 

 4(h)(10)(A). It provides: 



