Bush urges TVA to modify debt estimates

The Bush administration last month said it intends to propose legislation that will require the Tennessee Valley Authority (TVA), the largest public power producer in the US, to count its lease-leaseback deals as debt.

Last year, a report by the US General Accounting Office (GAO) argued that TVA’s alternative arrangements for refinancing new power plants have resulted in long-term obligations similar to debt, but are not counted toward its federally set $30 million debt cap.

In 2000, TVA began using a financing arrangement known as a ‘lease-leaseback’ to refinance new power plants, supplementing its traditional reliance on financing with cash generated by operations and the issuance of bonds and notes. As

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