Summary of Written Comments on the Financial Choices

**October 7, 2002**

# Introduction

Steve Wright and Paul Norman sent letters to the region in July 2002,
asking for public comment on how BPA should solve the financial problems
it is facing. BPA held six general public meetings and one tribal
meeting in the region during August and September, and the agency took
written comment through September 30. A notetaker was present at each
meeting to keep a record of the comments and prepare a meeting summary.
BPA reviewed thousands of letters, postcards and e-mail comments
received during the comment period and prepared the following summary.

# Evaluation of Comments

A total of 265 letter and e-mails were logged. Many of the letters
addressed more than one issue, for a total of 644 comments.

In his letter, Paul Norman suggested over a dozen "key questions" on
which BPA is seeking advice, and he laid out five approaches to dealing
with BPA's financial choices. Each of the key questions and each of the
approaches was given a number (see the following list) and the comments
were coded accordingly. There is overlap between issues addressed in the
key questions and those addressed in the five approaches. In order not
to infer anything that was not specifically stated, a comment was
assigned codes 13-17 only if it referred directly to Approaches 1-5.

It is important to note that the category names the issue. The comments
logged in that category may be for, against or simply an observation on
the topic.

## Category/Issue

1 Push Problem to Future

2 Risk and Treasury Repayment

3 Infrastructure Improvements

4 Conservation and Renewables

5 Nuclear (Columbia Gen. Sta.)

6 Fish and Wildlife Costs

7 BPA's Internal Costs

8 Existing Contracts

9 Cash Reserves

10 Actions to Address 2003

11 Regional Economy

12 Financial Tools/Other Actions

13 #1-Close rev. gap thru rates only

14 #2-Cut costs/increase efficiencies

15 #3-Take more risk in paying Treas.

16 #4-Push problem to future

17 #5-One time adjust thru SN CRAC

18 Combination of Approaches

19 Rates

20 Miscellaneous

The following are the total comments in each category:

+-----------------------------------+-----------------------------------+
| ## 1 Push Problem to Future       | 7                                 |
+-----------------------------------+-----------------------------------+
| ## 2 Risk and Treasury Repayment  | 34                                |
+-----------------------------------+-----------------------------------+
| ## 3 Infrastructure Improvements  | 6                                 |
+-----------------------------------+-----------------------------------+
| ## 4 Conservation and Renewables  | 80                                |
+-----------------------------------+-----------------------------------+
| ## 5 Nuclear Pl                   | 21                                |
| ant (Columbia Generating Station) |                                   |
+-----------------------------------+-----------------------------------+
| ## 6 Fish and Wildlife Costs      | 100                               |
+-----------------------------------+-----------------------------------+
| ## 7 BPA's Internal Costs         | 95                                |
+-----------------------------------+-----------------------------------+
| ## 8 Existing Contracts           | 22                                |
+-----------------------------------+-----------------------------------+
| ## 9 Cash Reserves                | 7                                 |
+-----------------------------------+-----------------------------------+
| ## 10 Actions to Address 2003     | 6                                 |
+-----------------------------------+-----------------------------------+
| ## 11 Regional Economy            | 34                                |
+-----------------------------------+-----------------------------------+
| ##                                | 31                                |
|  12 Financial Tools/Other Actions |                                   |
+-----------------------------------+-----------------------------------+
| ## 13 Approach #1---clo           | 9                                 |
| se revenue gap through rates only |                                   |
+-----------------------------------+-----------------------------------+
| ## 14 Approach #2---cu            | 6                                 |
| t costs and increase efficiencies |                                   |
+-----------------------------------+-----------------------------------+
| ## 15 Approach #3---              | 2                                 |
| take more risk in paying Treasury |                                   |
+-----------------------------------+-----------------------------------+
| ##                                | 3                                 |
|  16 Approach #4---Defer costs and |                                   |
|  push the problem into the future |                                   |
+-----------------------------------+-----------------------------------+
| ## 17 Approach #5---one time      | 1                                 |
|  adjustment of rates thru SN CRAC |                                   |
+-----------------------------------+-----------------------------------+
| ## 18 Combination of Approaches   | 14                                |
+-----------------------------------+-----------------------------------+
| ## 19 Rates                       | 109                               |
+-----------------------------------+-----------------------------------+
| **20 Miscellaneous**              | 57                                |
+-----------------------------------+-----------------------------------+

## [Key Comments]{.underline}

# The following is a summary of representative comments in each category. The number in parenthesis is the total number of comments in the category.

# 

# 1 Push Problem to Future (7)

-   Unacceptable to push costs to the future

# 2 Risk and Treasury Repayment (34)

-   Treasury payment must be the top priority

-   It is vitally important not to miss a Treasury payment

-   Do not prepay Treasury; seek to have past prepayments credited to
    future obligations

-   Reduce Treasury Payment Probability (TPP) to 92-93 percent

-   Avoid rate increase, even if it means reducing TPP

**3 Infrastructure Improvements (6)**

-   Support funding to expand and upgrade properties

-   Defer non-critical capital projects

# 4 Conservation and Renewables (80)

-   Reduce/delay expenditures for conservation and renewables

-   With loads down, question the need to acquire conservation/renewable
    resources

-   Conservation and renewables are part of the solution; do not cut
    funding

-   Diversify resources to include wind and new technologies

# 5 Nuclear Plant (Columbia Generating Station) (21)

-   Phase out nuclear power

-   Increase efficiency/cut costs at Columbia Generating Station

# 6 Fish and Wildlife Costs (100)

-   Fish and wildlife (F&W) expenditures should be reduced

-   Only cost-effective recovery measures should be continued

-   BPA has legal/treaty obligations to recover salmon; do not reduce
    spending

-   Support hydro operations changes (ID/MT proposals) to reduce spill
    and flow aug

-   Proposed F&W cuts lack specificity; if cuts are to be made, future
    hearings must be held

-   Streamline review process for F&W restoration projects

# 7 BPA's Internal Costs (95)

-   Cut costs wherever possible, including programs, staff, salaries

-   Increase efficiency at Corps and Bureau projects

-   Return to rate case spending levels

-   Rate case spending levels were unrealistically and unreasonably low

# 8 Existing Contracts (22)

-   Work to cancel/restructure high-priced purchases; look into fraud

-   Renegotiate IOU contracts

-   Enforce DSI contract obligations

# 9 Cash Reserves (7)

-   Achieve \$500-million reserve level

-   Use Energy Northwest refinancing proceeds for cash reserves

# 10 Actions to Address 2003 (6)

-   Focus on near term, 2003

-   Address financial problems year to year

**11 Regional Economy (34)**

-   The economy in the region is weak; it is not yet recovering

-   Coastal and agricultural communities are suffering

-   Another rate increase will further weaken the Northwest economy

-   Continue funding the economic development program

-   Work with the aluminum smelters so they can operate

-   Northwest has lost its competitive edge with electricity rates

# 12 Financial Tools/Other Actions (31)

-   Explore tools such as short-term borrowing

-   Seek to extend Treasury debt payments

-   Bond finance capital projects

-   Use ENW refinancing proceeds to keep rates down

-   Borrowing to cover operating costs is not in the region's best
    interest

-   Use cash-management tools

# 13 Approach #1 -- close revenue gap through rates only (9)

-   Use CRAC mechanisms already in place

-   Make reasonable cost cuts and use the CRACs

# 14 Approach #2 -- cut costs and increase efficiencies (6)

-   Cut costs, but don't put mission at risk

-   Approach #2 does not go far enough with cost cuts

# 15 Approach #3 -- take more risk in paying treasury(2)

-   Option #3 is politically risky

# 16 Approach #4 -- defer costs and push the problem into the future (3)

-   Do not push costs to the future

-   Defer costs

# 17 Approach #5 -- One time adjustment of rates through SN CRAC (1)

-   SN CRAC is not warranted without further study

# 18 Combination of Approaches (14)

-   The five approaches should be combined

-   Consider a combination of 2, 3 and 4

-   Approaches rely too heavily on rate increases

# Rates (109)

-   We cannot absorb another rate increase; an increase is unacceptable

-   Evaluate all options to reduce rates

-   A 7 percent increase is a small price to pay to continue investments
    in F&W and clean energy

-   Raising rates is the most defensible option

-   Trigger the CRACs

-   Further rate increases jeopardize the profitability and viability of
    businesses/agriculture

# 20 Miscellaneous (57)

-   Ratepayers are the true stakeholders in the system

-   Oppose FERC's RTO and SMD proposals

-   Add new generating resources, including coal and nuclear

-   BPA should seek government-to-government consultation with the
    tribes