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Power Administration Budget Authorizations FY 2008 Analysis

Comprehensive analysis of Southeastern, Southwestern, and Western Area Power Administrations' budget authorizations for FY 2008, including program directions, purchase power and wheeling costs, alternative financing, rate provisions, and emergency provisions.

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Power Administration Budget Authorizations FY 2008 Analysis

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  1. FY 2008 Congressional Budget Southeastern, Southwestern, and Western Area Power Administrations February 2007

  2. FY 2006 v. FY 2008 CBSOUTHEASTERN POWER ADMINISTRATION($000) FY 2006FY 2008 CB Program Direction $ 5,544 $ 6,463 Purchase Power & Wheeling $47,198$62,215 Total Program $52,742 $68,678 Less Offsetting Collections (PPW) ($32,713) ($48,413) Less Alternative Financing (PPW) ($14,485)($13,802) Total Budget Authority $ 5,544 $ 6,463

  3. SOUTHEASTERN POWER ADMINISTRATIONFY 2008 Request ($000) Alternative Offsetting AppropriationFinancing CollectionsTotal Program Direction $6,463 --- --- $6,463 Purchase Power & Wheeling --- $13,802 $48,413 $62,215 Total Program $6,463 $13,802 $48,413 $68,678 Alternative Financing is Net Billing. The FY 08 budget includes requested permanent authority for Reimbursable Activities

  4. FY 2006 v. FY 2008 CBSOUTHWESTERN POWER ADMINISTRATION($000) FY 2006FY 2008 CB Program Direction $19,758 $22,214 Operation & Maintenance $ 6,972 $11,978 Construction $ 3,134 $ 4,300 Purchase Power & Wheeling $12,400$45,000 Total Program $42,264 $83,492 Less Offsetting Collections (PPW) ($ 3,000) ($35,000) Alternative Financing ($ 9,400)($18,050) Total Budget Authority $29,864 $30,442

  5. SOUTHWESTERN POWER ADMINISTRATIONFY 2008 Request ($000) Alternative Offsetting AppropriationFinancing CollectionsTotal Program Direction $21,337 $877 --- $22,214 Operations & Maintenance $ 5,674 $6,304 --- $11,978 Construction $ 3,431 $869 --- $ 4,300 Purchase Power & Wheeling --- $10,000 $35,000 $45,000 ___________________________________________ Total Program $30,442 $18,050 $35,000 $83,492 Alternative Financing includes Net Billing, Bill Crediting, and Reimbursable Activities (Customer Advances)

  6. FY 2006 v. FY 2008 CBWESTERN AREA POWER ADMINISTRATION($000) FY 2006FY 2008 CB Program Direction $143,667 $157,304 Operation & Maintenance $ 47,295 $ 53,271 Construction & Rehabilitation $ 53,957 $ 62,915 Purchase Power & Wheeling $321,397 $425,254 Utah Mitigation & Conservation $ 6,633$ 7,167 Total Program $572,949 $705,911 Less Alternative Financing & Offsetting Collections ($341,297)($504,881) Total Budget Authority $231,652 $201,030

  7. WESTERN AREA POWER ADMINISTRATIONFY 2008 Request ($000) Customer Power Net Billing/ AppropriationAdvancesReceiptsReimbursableTotal Program Direction $138,492 $15,804 $ 3,008 --- $157,304 Operation & Maintenance $ 40,371 $11,971 $ 929 --- $ 53,271 Construction & Rehabilitation $ 15,000 $47,915 --- --- $ 62,915 Purchase Power & Wheeling --- $11,717 $258,702 $154,835 $425,254 Utah Mitigation & Conservation $ 7,167 --- --- --- $ 7,167 _________________________________________________ Total Program $201,030 $87, 407 $262,639 $154,835 $705,911

  8. “Agency Rate” Provision • Assign “agency rates” to new obligations beginning in FY 2007 (FY 2008 if House version of CR passes) • The “agency rate” is the rate at which federal corporations and BPA borrow • Applicable to administratively set interest rates • All Southeastern and Southwestern investments • Investments for up to 8 Western projects • New investments 2007-2012: Central Valley, Collbran, Pacific Intertie, Parker-Davis, Rio Grande • No new investments 2007-2012: Falcon-Amistad, Provo River, and Washoe

  9. “Agency Rate” Provision • Rate impacts estimated at less than 1% • Revenue impacts of $2-3 million per year from FY 07 to FY 2012 for all three PMAs combined • “Agency rate” was 0.5% higher on average than yield rates from 1999-2006

  10. “Agency Rate” Provision • Rationale • Reflects risk associated with PMAs defaulting on payments owed to Treasury • Interest rates similar to BPA, government corporations, and other government entities • Implementation • Modification of DOE Order RA6120.2 in an Administrative Procedure Act process • Rate adjustments in Administrative Procedure Act processes as needed

  11. Emergency PPW Provision • The PMAs must repay PPW funded through Continuing/Emergency Funds within 1 year • The rate impact in a given year will depend on the extent to which Continuing/Emergency Funds are used • No revenue impact over time because all PPW costs are recovered regardless of funding source

  12. Emergency PPW Provision • SEPA already does this for two of its systems • The PMAs are working out the details of implementation with OMB • Implementation • SEPA: FY 2008-2009 for remaining systems • WAPA: FY 2008 • SWPA: FY 2009

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