Bonneville Power Administration: Borrowing Practices and Financial
Condition (Briefing Report, 04/19/94, GAO/AIMD-94-67BR).

The Bonneville Power Administration (BPA), which markets and distributes
power generated on the Columbia River and its tributaries, faces
significant operating and financial risks because of its heavy reliance
on borrowing, recent operating losses, and other uncertainties.  For
nearly all of its capital investments, BPA uses debt financing--that is,
BPA borrows money and repays the debt, with interest, through future
revenues. Almost all of BPA's new borrowing is projected to come from
the U.S. Treasury.  By contrast, public utilities and federal entities,
such as the Tennessee Valley Authority, generally use a higher portion
of their current revenues to pay for capital expenditures than BPA does.
In the short term, BPA's low financial reserves provide little
flexibility to respond to further operating losses, increasing the
possibility that BPA would be unable to make its annual payment to
Treasury.  In the longer term, BPA's financial viability could also be
jeopardized if the gap between BPA rates and the cost of alternative
energy sources continues to narrow. Such a scenario could cause some BPA
customers to meet their energy needs elsewhere, leaving a dwindling pool
of ratepayers to pay off the debt burden accumulated during previous
years.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-67BR
     TITLE:  Bonneville Power Administration: Borrowing Practices and 
             Financial Condition
      DATE:  04/19/94
   SUBJECT:  Financial management
             Borrowing authority
             Authority to borrow from Treasury
             Energy industry
             Electric utilities
             Energy marketing
             Budgetary reserves
             Budget authority
IDENTIFIER:  Snake River (ID)
             Columbia River Power System
             
************************************************************************

We regret that the full text of this item is presently unavailable.

See the GAO FAQ - Section 2.0 for printed copy ordering information.
The FAQ is automatically retrieved with all WAIS search results or 
can be obtained by sending e-mail to: [email protected]