BPA FY 2003 Financial Condition Update: Liquidity Tools to Bridge the Gap. FY03 . Liquidity Tool . Potential. ($ in millions). Use $250 M Treasury Note. 250. Apply Treasury Payment to FY2004-2006 Expenses. 315. Recognize Previous Prepayments. 470. Defer Treasury Payment. 170.
BPA FY 2003 Financial Condition Update: Liquidity
Tools to Bridge the Gap
($ in millions)
Use $250 M Treasury Note
Apply Treasury Payment to FY2004-2006 Expenses
Recognize Previous Prepayments
Defer Treasury Payment
TBL Forecasted Positive Net Revenues
DOE- March 03
BPA has a number of liquidity tools to bridge gaps due to short term
cash flow shortfalls.
Confidential – Sensitive Information
Current Issues With Treasury
“. . .if the Administrator fails to repay by the end of any fiscal year all of the amounts projected immediately prior to such year to be repaid to the Treasury by the end of such year . . .if such failure is due to reasons other than (A) a decrease in power sale revenues due to fluctuating streamflows or (B) other reasons beyond the control of the Administrator, the Secretary of the Treasury may increase the interest rate applicable to the outstanding bonds issued by the Administrator during such fiscal year. . . . The Secretary of the Treasury shall take into account amounts that the Administrator has repaid in advance of any repayment criteria in determining whether to increase such rate.”(See Appendix for complete language.)
Treasury is discussing the possibility oftheir attorneys giving us some general guidelines on the 1% penalty in terms of what documentation they would expect from us if we missed a payment, what things they would consider beyond the control of the Administrator, etc.
Advance Amortization Recognition
Language from BPA FY 2002 Budget, page 8 –
"In recent years, BPA has made amortization payments in excess of those scheduled in its FERC-approved rate filings, resulting in a balance of advance repayment., This balance will allow BPA to reduce amortization below scheduled amounts if, in a future year, decreased revenues or increased cost cause a serious cash flow deficit. The Advance Amortization Recognition balance will assist BPA on a cumulative basis to remain current or ahead or current on its repayment. The balance will allow BPA to use overpayments in prior years to offset reduced future payments. This recognizes an underlying concept behind the power marketing administrations' repayment policy and BPA's organic legislation--that hydro systems are dependent on extremely variable stream flows for revenues, with the potential for more than the planned annual amortization payment in good water years and less in bad water years."
Accelerated Repayment Recognition
Accelerated Repayment Recognition -Potential Design
Use of the Acceleration Balance