In particular, we object to the provisions whereby the Guam Power Authority must pay principal and interest to the Gover ment of Gust, but the Government of Guam is forgiven the payment of inter est to the Federal Government. Such a plan would constitute a windfall to the Government of Guam financed by the customers of the Guam Power Authority and the Federal Government. The 1976 loan to Guam Power Authority was @ business loan to a failing public utility. The Secretary of the Interior guaranteed the loan on the authority given him by the United States Congress and is liable to the Federal Financing Bank for the unpaid principal and interest. Nonpayment ef inter est beyond Decenber 31, 1980, as proposed by section 303, would leave the Secretary of the Interior with a Liability for which no fimds are appropriated. While we support an extension, we object strem pusly to the nonpayment of interest provision of section 303. We have been informed by officials of the Guam Power Authority that, with the approval by the Public Utility Commission of two rate increases, the Guam Power Authority will be able to achieve a 2.0 ratio of income to debt service requirements that would make its . long-term ebligations attractive to the private bond market. Assuming that such a ratio could be maintained, it is anticipated that within 10 years or less the Authority will be able to obtain private financing and end its dependence on the Federal guarantee and loan. We understand that, for this reason, the Guam Power Authority would prefer a l0-year extension to the 30-year extension contained in section 303, which provides for the amortization of a principal. - There is ample incentive for the Guam Power Authority to return to the private market as scon as possible. The private tax free bord rates should be substantially less than comparable Federal rates. Additionally, Guam Power Authority is very moch interested in reestablishing its credit rating in order to reenter the private bond market for expansion financing. The Administration endorses the idea of a 10-year extension and proposes that the following language be substituted for the current language of cee o 4 section 303: ~ am Sec. 303: ‘Section 12 of the Organic Act ofGu hereby (gq Stat. 387;°48 U.S.C. 1423a), as amended, is mber 31, amended by deleting all after the words "Dece age: 1980.", and substituting the following langu kcwer Nroe ar SRPNewey wt