"We can now start preparing to refinance $1.7 billion in high-interest bonds on our remaining plants," Mr. Petersen said.

Thus, those high-interest bonds are retired, and the city is left paying back the second set of bonds at the lower interest rate.

The loss came from paying off $550 million in high-interest bonds and reissuing lower-cost debt.

The new securities would be used to refinance $1.7 billion in high-interest bonds that were sold to construct the power system's three remaining nuclear plants.

Over the last few years, Mr. Pataki has paid off $1 billion in high-interest bonds ahead of schedule.

The refinancing issue is the first step in a program intended to reduce debt service on about $2 billion in high-interest bonds.

The initial intention of selling $250 million in the high-interest bonds was scaled back in the face of investor reluctance.

By now Mexico has already spent $5 billion of American money making good on its high-interest bonds and is readying another $5 billion.

The Dutch auction and a $266 million refinancing of high-interest bonds issued in 1992, are scheduled to go to market today.

In addition, Denver had also planned to issue about $266 million in new bonds today to pay off high-interest bonds issued in 1992.