From: Roger.Kodat@do.treas.gov [mailto:Roger.Kodat@do.treas.gov]
Sent: Friday, September 27, 2002 10:56 AM
To: jhcurtis@bpa.gov
Cc: Paula.Farrell@do.treas.gov; bruce.carnes@hq.doe.gov
Subject: RE: Advanced Amortization Recognition


Jim,

I wish to thank you and your staff for taking the time and effort to help me
and my staff understand the Advanced Amortization Recognition (AAR) concept.
We carefully reviewed the explanatory materials and memos sent to us by your
colleagues and discussed comments passed to us by your staff in phone calls.


Based on the information we received, Treasury would not favor
implementation of this concept.  As an underlying principle, we do not
support establishing a new type of offset credit, which we construe this to
be.  We recognize that BPA might face certain financial challenges in the
next fiscal year.  However, our stance is formulated with an understanding
that BPA has the option to defer certain debt repayments when there is no
fixed schedule for amortization, and may borrow additional funds from
Treasury, as needed.

Kind regards, Roger

-----Original Message-----
From: Curtis, Jim - DF-2 [mailto:jhcurtis@bpa.gov] 
Sent: Tuesday, September 17, 2002 6:54 PM
To: Roger. Kodat (E-mail)
Cc: Paula' 'Farrell (E-mail); Bruce Carnes (E-mail)
Subject: Advanced Amortization Recognition

Hello Roger,  I hope is all going well especially given the active
environment of the airline industry.

I wish to thank you for the attention Paula is giving BPA's interest in
fleshing out the Advanced Amortization Recognition concept that Steve Wright
spoke of the last time you met.  Notwithstanding a hectic year-end calendar,
Paula has been very responsive in reviewing our materials and seeking
clarification. We hope to have additions conversations this week.  

I also want to apologize for BPA's increased sense of urgency in pursuing
this topic.  Earlier we had thought that the Fall would give us adequate
time to incorporate any agreement on AAR into our financial decisions this
winter.  We now would like to get some sense of Treasury's level of comfort
with the concept we are proposing before September 30th if possible.  That
would give Steve Wright the additional information he needs in committing to
the advanced amortization payments we would like to make at year-end.  He
will be making that payment in the face of strong resistance from our
customers who urge us to hold the funds until we make the larger financial
decisions in early winter.

Best Regards,
Jim.