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BPA’s third quarter financial outlook remains steady

The Bonneville Power Administration’s third quarter financial report indicates the agency’s fiscal position remains positive.
The Bonneville Power Administration’s third quarter financial report indicates the agency’s fiscal position remains positive.
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While BPA remains optimistic it can maintain its current financial position, the agency will remain vigilant with respect to managing costs in the face of potential volatility for the remainder of the year.

Tom McDonald, BPA's chief financial officer
The Bonneville Power Administration's third quarter financial report indicates the agency's fiscal position remains positive. Despite seeing some decline in positive net revenues and end-of-year days cash on hand since the second quarter forecast, BPA continues to see encouraging key performance indicators for its finances.

The third quarter forecast for agency net revenues is $184 million, a $26 million decrease since the second quarter but still significantly higher than the $70 million target. BPA predicts it will end the year with 89 days cash on hand, falling from 116 days at the end of fiscal year 2024, but well above the 60-day target established in BPA's Financial Reserves policy.

BPA's above-targets results are mainly due to higher power and transmission revenues, lower-than-predicted Integrated Program Review expenses and debt-management actions. Notably, BPA used liquidity tools to offset its largest power purchases in January and February through a federal debt-management transaction that realized significant gains for the agency.

For Power Services, the third quarter net revenue forecast is $105 million – $27 million above target. The slight decrease in forward-looking estimates for Power's net revenue since the second quarter is primarily the result of higher power purchases and an uptick in IPR expenses. Power is expected to end the year with 78 days cash on hand.

Transmission Services' net revenue forecast is $80 million above target with a third quarter forecast of $73 million. This $62 million improvement since the last financial report is the result of higher operating revenues for short-term Southern Intertie services, decreased expenses, and debt-management actions. Transmission is expected to end the year with 115 days cash on hand.

With net revenue forecasts for Power and Transmission services being above their targets, there is a very low probability that either business line will trigger a distribution or surcharge according to BPA's Financial Reserves Policy.

“While BPA remains optimistic it can maintain its current financial position, the agency will remain vigilant with respect to managing costs in the face of potential volatility for the remainder of the year," said Tom McDonald, BPA's chief financial officer.

For more information about BPA's latest financial update, visit the Quarterly Business Review page on bpa.gov.

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