BPA to use stimulus bill borrowing authority for investments

Bonneville Power Administration announced a $3.25 billion increase in its borrowing authority -- included in the economic stimulus bill -- will support expanded capital investments in transmission, the federal hydropower system, energy efficiency, and fish and wildlife.

The increase in BPA's borrowing authority from the U.S. Treasury is included in the $787 billion American Recovery and Reinvestment Act, an economic stimulus bill signed by President Obama in February. (HNN 2/24/09)

BPA Administrator Stephen Wright noted borrowed money must be repaid with interest but said debt financing capital investments can help stimulate the economy without incurring substantial near-term rate impacts. Wright discussed the new borrowing authority in early March in a status report on BPA's financial situation.

Based on the new borrowing authority, BPA will build a major new transmission project -� the McNary-John Day 500-kilovolt transmission line. The $246 million line will run from BPA's substation at the Corps of Engineers' 980-MW McNary Dam, cross the Columbia River, and run parallel to the Columbia River for 75 miles, then cross back over the river, ending at BPA's substation at 2,160-MW John Day Dam.

BPA did not identify how it plans to use the new borrowing authority for the Federal Columbia River Power System, energy efficiency, and fish and wildlife. BPA, a not-for-profit federal electric utility, markets more than one-third of electricity consumed in the Pacific Northwest.

BPA forecasts dry water year

BPA said it is experiencing an unusual combination of low water and reduced prices, making it likely BPA will lose money for the fiscal year ending Sept. 30.

Below average precipitation fell across the Columbia River Basin during the winter of 2008-2009. February was particularly dry, BPA said. The current forecast is for 79 percent of average runoff from January through July. It now appears unlikely stream flows will recover to average this year, BPA said.

BPA said it expects secondary revenues -� from the sale of surplus power not needed to firm loads �- would be down sharply. When the 2009 fiscal year began Oct. 1, 2008, BPA projected it would make about $400 million in net secondary revenues this year. BPA's current forecast for net revenue from the sale of surplus power is $100 million, a roughly $300 million drop in projected revenue.

In February, BPA proposed its first wholesale power rate increase in six years, citing increased costs including the expense of salmon mitigation and of operating and maintaining its hydropower system. (HNN 2/17/09) If adopted, the rate proposal would begin in October.

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