Bonneville Power Administration's Repayment of Federal Investment in Columbia River Power System

GAO discussed the Bonneville Power Administration's (BPA) repayment to the Treasury of the federal investment in the Columbia River Power System. The federal investment in the system stands at about $7.9 billion, and federal law requires BPA to repay this investment. At the close of fiscal year (FY) 1983, BPA had repayed about 8 percent of the total federal investment. In March 1982, the BPA Administrator made a commitment to reduce costs and increase rates to prevent nonrepayments on the investment from occurring in the future; however, BPA experienced an operating loss in FY 1983 and no payments were made. BPA estimated that it would pay $153.4 million in deferred interest in FY 1984. GAO concluded that, while BPA has made recent efforts to catch up on repayments, a cost-based method with a fixed annual repayment schedule would place more discipline in the repayment process and help ensure its consistent application over the long run. This is important considering that 92 percent of the federal investment remains to be paid in future years.