Power Marketing Administrations: Repayment of Power Costs Needs Closer Monitoring
United States General Accounting Offic Washington United States
Pagination or Media Count:
This report responds to your request that we examine the monitoring of the repayment of the power-related costs and debt of four of the Department of Energys DOE power marketing administrations PMA. The PMAs costs and the power-related costs of the agencies that produce the power marketed by the PMAs are required by law to be repaid. Repayment is to be made through revenues from federal power sales. You expressed concern about issues we previously reported related to the under-recovery of certain power-related costs and the large amount of debt outstandingmore than 14 billion as of September 30, 1997. Specifically, you asked us to determine 1 whether DOE or the Department of the Treasury Treasury actively monitors the amount of debt to be repaid and the appropriateness of the annual payments and 2 whether there is a potential for financial loss to the federal government as a result of any lack of such monitoring of the repayment. We evaluated the effectiveness of the existing monitoring activities to determine whether they ensure that repayment amounts are complete, accurate, and timely. As agreed with your offices, we did not attempt to quantify the potential financial loss to the federal government resulting from any ineffectiveness in monitoring repayment. This report covers the four PMAs and the power-related activities of the Department of the Interiors DOI Bureau of Reclamation Bureau and the Department of Defenses DOD Army Corps of Engineers Corps. It also includes the portion of capital expenditures for irrigation facilities that becomes repayable through the PMAs power rates. We conducted our review from December 1997 through June 1998 in accordance with generally accepted government auditing standards. Additional information on our objectives, scope, and methodology in conducting this review is contained in appendix I.
- Economics and Cost Analysis