16 U.S.C. § 838l: Bonneville Power…

Summary

Changes how the Bonneville Power Administration (BPA) resets and pays back certain federal money used for power projects. It splits such federal-funded costs into "old" and "new" based on whether the project was in service before or after October 1, 1996. For old investments, BPA must set a new principal amount on October 1, 1996. That new principal equals the present value of the old scheduled payments (using a Treasury interest rate) plus a share of $100,000,000 divided among all old investments. The Secretary of the Treasury must approve BPA’s calculations. The new unpaid balance for old investments bears interest at the Treasury rate for those investments from October 1, 1996 until it is repaid or reaches its repayment date, which cannot be earlier than the repayment date assumed before October 1, 1996. From October 1, 1996 through September 30, 2001, BPA may prepay at most $100,000,000 of those new principal amounts. For new investments, interest during construction is added to the principal each year using a one-year Treasury rate, but BPA does not have to make interest payments during construction. After a new project is placed in service, its unpaid balance bears interest at the Treasury rate until repaid or until its repayment date. BPA must offer to put these rules into its sales contracts after September 30, 1996, and the rules do not change BPA’s duty to repay principal and interest from its net proceeds or its ability to prepay except for the $100,000,000 limit. Key words: "Administrator" = BPA head; "capital investment" = federal appropriations for projects; "new capital investment" = placed in service after 9/30/1996; "old capital investment" = placed in service before 10/1/1996 with costs incurred before 10/1/1996; "repayment date" = date by which rates must repay principal; "Treasury rate" = interest rate set by the Secretary of the Treasury for comparable Treasury obligations.

Title 16, §838l

Conservation, Source: USLM XML via OLRC

(a)Definitions

For the purposes of this section

(1)

(2)“capital investment” means a capitalized cost funded by Federal appropriations that—

(A)is for a project, facility, or separable unit or feature of a project or facility;

(B)is a cost for which the Administrator is required by law to establish rates to repay to the United States Treasury through the sale of electric power, transmission, or other services;

(C)excludes a Federal irrigation investment; and

(D)excludes an investment financed by the current revenues of the Administrator or by bonds issued and sold, or authorized to be issued and sold, by the Administrator under section 838k of this title;

(3)“new capital investment” means a capital investment for a project, facility, or separable unit or feature of a project or facility, placed in service after September 30, 1996;

(4)“old capital investment” means a capital investment the capitalized cost of which—

(A)was incurred, but not repaid, before October 1, 1996, and

(B)was for a project, facility, or separable unit or feature of a project or facility, placed in service before October 1, 1996;

(5)“repayment date” means the end of the period within which the Administrator’s rates are to assure the repayment of the principal amount of a capital investment; and

(6)“Treasury rate” means—

(A)for an old capital investment, a rate determined by the Secretary of the Treasury, taking into consideration prevailing market yields, during the month preceding October 1, 1996, on outstanding interest-bearing obligations of the United States with periods to maturity comparable to the period between October 1, 1996, and the repayment date for the old capital investment; and

(B)for a new capital investment, a rate determined by the Secretary of the Treasury, taking into consideration prevailing market yields, during the month preceding the beginning of the fiscal year in which the related project, facility, or separable unit or feature is placed in service, on outstanding interest-bearing obligations of the United States with periods to maturity comparable to the period between the beginning of the fiscal year and the repayment date for the new capital investment.

(b)New principal amounts

(1)Principal amount

Effective October 1, 1996, an old capital investment has a new principal amount that is the sum of— (A)

(B)an amount equal to $100,000,000 multiplied by a fraction whose numerator is the principal amount of the old payment amounts for the old capital investment and whose denominator is the sum of the principal amounts of the old payment amounts for all old capital investments.

(2)Determination

With the approval of the Secretary of the Treasury based solely on consistency with this section, the Administrator shall determine the new principal amounts under subsection (b) and the assignment of interest rates to the new principal amounts under subsection (c).

(3)Old payment amounts

For the purposes of this subsection, “old payment amounts” means, for an old capital investment, the annual interest and principal that the Administrator would have paid to the United States Treasury from October 1, 1996, if this section had not been enacted, assuming that—

(A)the principal were repaid—

(i)on the repayment date the Administrator assigned before October 1, 1994, to the old capital investment, or

(ii)with respect to an old capital investment for which the Administrator has not assigned a repayment date before October 1, 1994, on a repayment date the Administrator shall assign to the old capital investment in accordance with paragraph 10(d)(1) of the version of Department of Energy Order RA 6120.2 in effect on October 1, 1994; and

(B)interest were paid—

(i)at the interest rate the Administrator assigned before October 1, 1994, to the old capital investment, or

(ii)with respect to an old capital investment for which the Administrator has not assigned an interest rate before October 1, 1994, at a rate determined by the Secretary of the Treasury, taking into consideration prevailing market yields, during the month preceding the beginning of the fiscal year in which the related project, facility, or separable unit or feature is placed in service, on outstanding interest-bearing obligations of the United States with periods to maturity comparable to the period between the beginning of the fiscal year and the repayment date for the old capital investment.

(c)Interest rate for new principal amounts

As of October 1, 1996, the unpaid balance on the new principal amount established for an old capital investment under subsection (b) bears interest annually at the Treasury rate for the old capital investment until the earlier of the date that the new principal amount is repaid or the repayment date for the new principal amount.

(d)Repayment dates

As of October 1, 1996, the repayment date for the new principal amount established for an old capital investment under subsection (b) is no earlier than the repayment date for the old capital investment assumed in subsection (b)(3)(A).

(e)Prepayment limitations

During the period October 1, 1996, through September 30, 2001, the total new principal amounts of old capital investments, as established under subsection (b), that the Administrator may pay before their respective repayment dates shall not exceed $100,000,000.

(f)Interest rates for new capital investments during construction

(1)New capital investment

The principal amount of a new capital investment includes interest in each fiscal year of construction of the related project, facility, or separable unit or feature at a rate equal to the one-year rate for the fiscal year on the sum of— (A)

(B)accrued interest during construction.

(2)Payment

The Administrator is not required to pay, during construction of the project, facility, or separable unit or feature, the interest calculated, accrued, and capitalized under subsection (f)(1).

(3)One-year rate

For the purposes of this section, “one-year rate” for a fiscal year means a rate determined by the Secretary of the Treasury, taking into consideration prevailing market yields, during the month preceding the beginning of the fiscal year, on outstanding interest-bearing obligations of the United States with periods to maturity of approximately one year.

(g)Interest rates for new capital investments

The unpaid balance on the principal amount of a new capital investment bears interest at the Treasury rate for the new capital investment from the date the related project, facility, or separable unit or feature is placed in service until the earlier of the date the new capital investment is repaid or the repayment date for the new capital investment.

(h)Omitted

(i)Contract provisions

In each contract of the Administrator that provides for the Administrator to sell electric power, transmission, or related services, and that is in effect after September 30, 1996, the Administrator shall offer to include, or as the case may be, shall offer to amend to include, provisions specifying that after September 30, 1996—

(1)the Administrator shall establish rates and charges on the basis that—

(A)the principal amount of an old capital investment shall be no greater than the new principal amount established under subsection (b);

(B)the interest rate applicable to the unpaid balance of the new principal amount of an old capital investment shall be no greater than the interest rate established under subsection (c);

(C)any payment of principal of an old capital investment shall reduce the outstanding principal balance of the old capital investment in the amount of the payment at the time the payment is tendered; and

(D)any payment of interest on the unpaid balance of the new principal amount of an old capital investment shall be a credit against the appropriate interest account in the amount of the payment at the time the payment is tendered;

(2)apart from charges necessary to repay the new principal amount of an old capital investment as established under subsection (b) and to pay the interest on the principal amount under subsection (c), no amount may be charged for return to the United States Treasury as repayment for or return on an old capital investment, whether by way of rate, rent, lease payment, assessment, user charge, or any other fee;

(3)amounts provided under section 1304 of title 31 shall be available to pay, and shall be the sole source for payment of, a judgment against or settlement by the Administrator or the United States on a claim for a breach of the contract provisions required by this Part; and

(4)the contract provisions specified in this Part 1 do not—

(A)preclude the Administrator from recovering, through rates or other means, any tax that is generally imposed on electric utilities in the United States, or

(B)affect the Administrator’s authority under applicable law, including section 839e(g) of this title, to—

(i)allocate costs and benefits, including but not limited to fish and wildlife costs, to rates or resources, or

(ii)design rates.

(j)Savings provisions

(1)Repayment

This section does not affect the obligation of the Administrator to repay the principal associated with each capital investment, and to pay interest on the principal, only from the “Administrator’s net proceeds,” as defined in section 838k(b) of this title.

(2)Payment of capital investment

Except as provided in subsection (e), this section does not affect the authority of the Administrator to pay all or a portion of the principal amount associated with a capital investment before the repayment date for the principal amount.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was enacted as part of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, and not as part of the Federal Columbia River Transmission System Act which comprises this chapter. Section is comprised of section 3201 of Pub. L. 104–134. Subsec. (h) of section 3201 of Pub. L. 104–134 amended section 6 of Pub. L. 103–436, which is not classified to the Code.

§838l Bonneville Power Administration Refinancing

Summary

Title 16, §838l

Notes & Related Subsidiaries

Editorial Notes

Citations & Metadata