Oct. 12 - The Bonneville Power Administration has paid the U.S. Treasury $1.045 billion for fiscal year 2007, which ended Sept. 30. This is the full, scheduled annual payment, with interest, plus a prepayment on the U.S. taxpayer investment in the Federal Columbia River Power System (FCRPS), which includes the federal hydropower dams and transmission system.

BPA is a self-financed agency that covers its costs with revenues from Northwest ratepayers and other purchasers of its power and transmission products and services. BPA receives no annual appropriations from the U.S. Congress.

"In an environment of rising power costs and increased demands on the federal hydropower and transmission system, this is the 24th year in a row we have paid the U.S. Treasury in full and on time," said Steve Wright, BPA administrator. "Meanwhile, we are holding our wholesale power rates steady for 2008."

BPA was able to keep rates at FY 2007 levels despite water runoff that was only 90 percent of average plus operations and maintenance costs at the Columbia Generating Station that were higher than expected.

BPA was able to keep rates at FY 2007 levels despite water runoff that was only 90 percent of average plus operations and maintenance costs at the Columbia Generating Station that were higher than expected. Wright said that the agency cut its rates by 3 percent for FY 2007 thanks to good hydro conditions in 2006, innovative collaboration with customers that addressed cash flow risks and a new financial arrangement between BPA and Energy Northwest. For more information about this arrangement, please see the related press releases from March 20, 2006, and October 2, 2006.

Details of BPA's FY2007 U.S. Treasury payment

Of the $1.045 billion gross Treasury payment, $151.6 million is paid with Treasury credits and $70.5 million comes from fish credits. The Treasury payment included $618.4 million in principal and $394.6 million in interest. BPA also paid $32.4 million in other obligations, including $21.1 million to ensure that ratepayers - not taxpayers - fully fund post-retirement benefit programs for FCRPS employees.

The $618.4 million principal payment includes $288.9 million in early retirement of Treasury debt (principal repaid earlier than planned) as part of BPA's debt optimization program. BPA's debt optimization program is implemented in partnership with Energy Northwest, which operates the region's only nuclear power plant, and is designed to restore BPA's federal borrowing authority.

In addition to the Treasury payment, BPA paid operation and maintenance expenses for U.S. Army Corps of Engineers, Bureau of Reclamation and U.S. Fish and Wildlife Service projects directly funded by BPA. This direct funding came to $234.5 million in FY 2007.

While final audited results for fiscal year 2007 are not yet available, BPA expects to end the year with more than $1 billion in reserves after making the Treasury payment. This is an unprecedented level of reserves for the agency. It will help buffer ratepayers from potential poor water years or high wholesale market prices while ensuring BPA can meet fish and wildlife funding obligations. The reserve level primarily is due to very good financial results in fiscal years 2006 and 2007 and a new financial arrangement between Energy Northwest and BPA. The agency's strong reserves also reflect the five-month suspension of Residential Exchange Program payments to investor owned utilities. The suspension of these payments to IOUs is a separate financial matter and was not a factor in the agency's decision to hold rates steady for FY 2008.

BPA is a not-for-profit federal agency that markets about 40 percent of the electricity consumed in the Pacific Northwest. The power is produced at 31 federal dams in the Northwest and one nuclear plant and is sold to more than 140 Northwest utilities. BPA operates a high-voltage transmission grid comprising more than 15,000 miles of lines and associated substations in Washington, Oregon, Idaho and Montana.