Actions by the Bonneville Power Administration To Implement the Long-Term Contracting Provisions of P.L. 96-501

Pursuant to a congressional request, GAO reviewed the Bonneville Power Administration (BPA) statements about its responsibilities under P.L. 96-501 which requires it to offer initial long-term power sales contracts to customers. Congress had expressed concern that BPA might be seeking to have its customers sign power sales contracts earlier than what is necessitated by the timeframe set out in the Act.

The Act provides that each customer offered an initial long-term contract shall have 1 year from the date of such offer to accept the contract. The response of BPA to congressional questions attempted to show that BPA was in compliance with the Act. Regulations require that, within 9 months of the effective date of the Act, BPA must begin negotiating with customers and simultaneously offer them initial long-term contracts. BPA initiated contract negotiations in January 1981 and offered contracts on August 27, 1981. Based on a limited review, it appears that BPA has latitude in how it could implement the Act. Under the regulations, BPA has several options it could choose regarding offers and negotiations. BPA made the management decision to enter into negotiations for more than 8 months in an effort to draft contracts based on information obtained during the negotiating process. While the Act allows for negotiations for a period of 1 year after the offering of contracts, it appears that BPA management decided it would be better to complete as much of the negotiation phase as possible prior to offering the contracts.