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BPA Pays Treasury $1 Billion by Business Journal staff Portland Business Journal, November 17, 2003

The Portland-based Bonneville Power Administration has sent the U.S. Treasury more than $1 billion, including an early payment of $328 million designed to reduce overall debt costs. The agency said it ended fiscal 2003 in the black, despite low water conditions.

Steve Wright, BPA administrator, said potential losses projected early in 2003 were averted through a combination of spending reductions and debt refinancing.

BPA set a target of limiting internal power-related expenses affecting rates to actual 2001 levels, and beat the objective by nearly 10 percent in 2003, he said. Debt management reduced expenses $463 million, the agency reported.

The agency's audited financial results for fiscal year 2003 ending Sept. 30 show net revenue of $555 million on total revenue of $3.6 billion.

The Treasury payment included $544 million in principal and $466 million in interest. BPA also paid $47 million in other obligations, such as reimbursement for civil service retirement benefits.

Most of the $328 million of early retirement of Treasury debt was made possible by refinancing Energy Northwest bonds at lower interest rates.

In October, BPA and members of the two major utility groups in the region signed a proposed litigation settlement that would roll back BPA's wholesale rates 7.4 percent if ratified by all remaining public utility litigants.

BPA signed the agreement and sent it to more than 50 litigant utilities to sign within 90 days. If the settlement succeeds, BPA would eliminate a 2.2 percent rate increase that took effect Oct. 1 and reduce rates 7.4 percent below 2003 average rates. The net effect, compared to current rates, would be a nearly 10 percent reduction in wholesale power rates for fiscal year 2004.