Proposed changes in interest rate criteria and the amortization method for repayment of federal hydro-power investments

Where review of government policies followed in charging interest on unrepaid investment (32% of total program cost) disclosed those interest rates were less than cost to the US Treasury to borrow funds to finance federal programs, IG recommended consideration of policy changes to recover interest costs on new project more closely to true costs, i.e., perhaps use of a weighted average over entire construction period. Also, a policy to amortize all unrepaid investments on a simultaneous basis should be developed. Comments are appended from the Assistant Secretary for Resource Applications, and from the Director of the Office of Power Regulation, Federal Energy Regulatory Commission. (PSB)