Does a decrease in power sales affect future repayment to Treasury?
Although Western must repay all the investment and operating costs of the power facilities, short-term decreases in power sales would not necessarily negatively impact future repayment obligations to the U.S. Treasury. Each year, Western prepares a power repayment study. We analyze current power rates to determine if they will provide enough revenue to cover all costs, including future repayment obligations. Western’s power repayment studies anticipate cycles of above and below average water to derive the power rate. Surplus sales accelerate repayment, while deficits are capitalized at a current interest rate. If the study projects that rates will under collect the required revenue, Western begins a public process to adjust its rates accordingly.
