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Thank you for your consideration and if you need additional information please let me know.

Sincerely,

Shman pour
Herman E. Roser
Assistant Secretary

for Defense Programs

Enclosures

Honorable William Lehman • .
Chairman, Subcommittee on Transportation
Committee on Appropriations
House of Representatives
Washington, D.C. 20515

Honorable Lawrence Coughlin .
Ranking Minority Member
Subcommittee on Transportation
Committee on Appropriations
House of Representatives
Washington, D.C. 20515

Honorable Samuel S. Stratton
Chairman, Subcommittee on Procurement

and Military Nuclear Systems
Committee on Armed Services
House of Representatives
Room 2115, Rayburn House Office Building
Washington, D.C. 20515

Honorable Tom Bevill
Chairman, Subcommittee on Energy

and Water Development
Committee on Appropriations
House of Representatives
Washington, D.C. 20515

Honorable James J. Howard
Chairman, Committee on Public

Works and Transportation
House of Representatives
Washington, D.C. 20510

THE SECRETARY OF TRANSPORTATION

WASHINGTON, D.C. 20590

JAN 20 1983

The Honor able Pete V. Domenici
United States Senate
Washington, D.C. 20510

Dear Pete:

Following our meeting of January 14, I reviewed the supplemental Stipulated Agreement between the State of New Mexico and the U.S. Department of Energy (DOE) on upgrading State highways which may be used for shipments to the Waste Isolation Pilot Project (WIPP). Although I understand the final decision on construction of the WIPP will not be made until later this year after consultation with the State, I agree that it is appropriate for the . Department of Transportation (DOT) to begin considering this matter now.

The agreement includes the DOE's commitment to work with New Mexico's congressional delegation to seek funding for 205.9 miles of identified highways, estimated to cost $57,886,544.00. (in 1982 dollars) over 4-years. As 1 ädvised you during our meeting, it does not appear the terms of the agreement could be met through existing DOT programs. Therefore, I agree with the DDE_that a special appropriation will have to be pursued.

To that end, I want to assure you of this Department's full support for upgrading this vital system and to let you know the DOT will work closely with you to secure the needed funds. If desirable, the DOT, through its Federal Highway Administration, would be pleased to administer the specially appropriated funds using regular Federal-aid procedures.

While I will be leaving the Department at the end of the month, I will brief incoming Secretary Elizabeth Dole thoroughly on the importance of this funding and am sure she will be working closely with you on it.

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SUBCOMMITTEE RECESS · Senator ABDNOR. We're going to adjourn this committee until 2 p.m. tomorrow when the Bonneville Power Administration will be here. Thank you all very much.

[Whereupon, at 11:35 a.m. Tuesday, March 27, the subcommittee was recessed to reconvene at 2 p.m. Wednesday, March 28.]

ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR FISCAL YEAR 1985

WEDNESDAY, MARCH 28, 1984

U.S. SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C.
The subcommittee met at 2:15 p.m. in room SD-192, Dirksen Senate
Office Building, Hon. Mark O. Hatfield, chairman, presiding.
Present: Senators Hatfield and Sasser.

DEPARTMENT OF ENERGY
FEDERAL POWER MARKETING ADMINISTRATIONS

BONNEVILLE POWER ADMINISTRATION STATEMENT OF PETER T. JOHNSON, ADMINISTRATOR ACCOMPANIED BY:

STEVEN HICKOK, ASSISTANT ADMINISTRATOR FOR CONSERVATION STEPHEN AILSHIE, ASSISTANT ADMINISTRATOR FOR FINANCIAL MAN

AGEMENT Chairman HATFIELD. The hearing will come to order. This afternoon we will receive testimony on the 1985 budget request for the Bonneville Power Administration. As you know, our earlier hearing had been canceled. Rather than requiring all the power marketing administrations to return to Washington, we asked each of them to submit written testimony and to respond to some questions for the record

Without objection, that material will be made part of the hearing record following the testimony of the Bonneville Power Administration.

PREPARED STATEMENT Our principal witness today is Peter T. Johnson, Administrator of Bonneville Power. I extend a warm welcome to you and look forward to your testimony, Mr. Johnson. We will include your full statement in the record and you may proceed to summarize or to highlight your testimony at this time. [The statement follows:)

STATEMENT OF PETER T. JOHNSON

We are pleased to present to you today the fiscal year 1985 budget of the Bonneville Power Administration.

FISCAL SUMMARY

Total program obligations are projected to be about

$2.9 million, and our borrowing requirements are estimated to

be about $300 million. In the documents before you, you will

find a detailed description of items contained in the budget. I'd like to take this opportunity to present to you a broad view of the events and activities behind those numbers.

The 1985 budget reflects what I believe to be a major turning point in the affairs of BPA and the Northwest electric utility industry as a whole. As you know, BPA and its utility customers have been struggling through a very long and severe economic winter. That winter is ending.

We can see signs of renewal in virtually every phase of our operations. Because we have worked hard over the past several years to preserve and strengthen our fiscal integrity, we are

well prepared to take advantage of the new opportunities to

assist in the economic recovery of our region and the nation.

I will briefly discuss the positive trends we currently see,

and identify a couple of major issues rising before us in coming months.

BCONOMY

A thaw is clearly evident in the Northwest's economy. Until recently, economic recovery in our service area had been sluggish, and this has affected power sales. But in the first quarter of this fiscal year, our revenue was right on target

with projections. So far in the second quarter, sales are

holding up well and we hope to finish the first half of the year in a very solid fiscal position.

REPAYMENT

Two years ago, I stated that we would make full repayment of

deferred interest on Treasury_borrowings, plus a sizeable

amortization payment, by the end of fiscal 1985.

Slack power

sales slowed our progress initially. However, we did not

abandon our repayment goals, and they are reflected in the

rates adopted late last year.

Those rates will carry us into

1985, and early results give us good reason for optimism that we will meet our goals. Again, this is a very positive sign-the most encouraging sign of recovery that I have seen since becoming Administrator.

Another area in which I see positive signs is BPA's internal management. In my previous appearances before you, I stressed the themes of sound business principles, fiscal responsibility, and good planning. Our strategic planning process has produced a concept we call "best value." The best-value concept

challenges managers to conduct their affairs as if a tough

competitor were seeking to capture a greater share of the

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Efforts to bring a new computer on line demonstrate the best

value concept. We are developing a comprehensive financial

management information system. Our new IBM 308 ID computer is

management in

mation system.

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enabling us to achieve greater efficiency by_bringing

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