I READ WITH INTEREST THE ARTICLE "TIME'S UP FOR PUBLIC Power," in the July 1 edition of your publication, written by Charles Bayless, the former CEO of Tucson Electric Power Co. (and now CEO of Illinova - Ed.). Particularly striking was the sidebar on page 34, which accuses the Western Area Power Administration, a power marketing administration within the Department of Energy, of hiding costs and inappropriately handling a number of financial issues such as depreciation. I welcome the opportunity to respond to this misinformation.
The Bayless article relied erroneously relies on selected information from Western's 1994 annual report, hardly the most recent information available. While the sidebar asserts that Western must reflect depreciation in its rates, no mention was made of the footnotes to the financial statements published in the annual report, which clearly state that Western's rates, pursuant to law, are not depreciation-based. Congress has approved the use of amortization in the setting of our rates, recognizing the variable nature of hydrology and hydroelectric power generation. Far from "hiding" costs, Western fully and clearly disclosed its business practices, which were found by an independent auditor to be "in conformity with generally accepted accounting principles."