Federal Power

Hydropower plants run by the Army Corps of Engineers and the Bureau of Reclamation are generally less reliable in generating electricity than are nonfederal hydropower plants. These plants could not always obtain funding for maintenance and repairs when needed, and, as a result, the agencies postponed maintenance until the money was available. These delays caused frequent, extended outages and inconsistent plant performance. The power marketing administrations' electricity is generally priced less than other electricity. However, as markets become more competitive, the power marketing administrations' customers will have more suppliers of electricity to choose from. As nonfederal electricity rates fall in competitive markets, part of the federal government's $22 billion in debt may be at risk of nonrecovery if the federal electricity does not remain marketable. One factor affecting the marketability of this electricity is its reliability. The Bureau, the Corps, and the power marketing administrations have taken steps to obtain funding to maintain and repair their hydropower plants.

GAO noted that: (1) the Bureau's and the Corps' hydropower plants are generally less reliable in generating electricity than nonfederal hydropower plants; (2) the reliability of the Bureau's hydropower plants has improved recently, while the Corps' has remained relatively unchanged; (3) from 1993 through 1997, the Bureau's units were available to generate electricity an average of about 83 percent of the time compared with about 91 percent for nonfederal units; (4) the availability of the Bureau's units to generate electricity improved from about 81 percent of the time in 1993 to about 87 percent in 1997; (5) the Corps' units were available to generate electricity an average of about 89 percent of the time during the period 1993 through 1997; (6) the Bureau's and the Corps' units in the Pacific Northwest were available about 79 percent and 85 percent of the time, respectively; (7) the Bureau's and the Corps' plants were less reliable because they could not always obtain funding for maintenance and repairs when needed; (8) GAO found that because of uncertain funding, the agencies delay repairs and maintenance until funds become available; (9) GAO also found that these delays caused frequent, extended outages and inconsistent plant performance; (10) the power marketing administrations' (PMA) electricity is generally priced less than other electricity; (11) however, as markets become more competitive, PMAs' customers will have more suppliers from whom they can buy electricity; (12) as nonfederal electricity rates decline in competitive markets, a portion of the federal government's appropriated and other debt of about $22 billion may be at risk of nonrecovery if the federal electricity does not continue to be marketable; (13) a factor affecting the marketability of this electricity is its reliability; (14) Congress, the Office of Management and Budget, and GAO have been working to help ensure that the purchase and maintenance of all assets and infrastructure have the highest and most efficient returns to the taxpayer and the government; (15) the Bureau, the Corps, and the PMAs have taken actions to obtain funding to maintain and repair their hydropower plants; (16) these actions involve directly funding maintenance and repairs from the PMAs' electricity revenues or from funds contributed by the power customers; and (17) by enabling repairs to be made in a timely manner, these actions have the potential to help to improve the reliability of the PMAs' electricity and to continue their existing rate-competitiveness.