Burdensome and Unnecessary Reporting Requirements of the Public Utility Regulatory Policies Act Need To Be Changed

GAO reviewed the need to continue portions of the Public Utility Regulatory Policies Act which address retail rate and regulatory policies for electric utilities. The Act was established to encourage conservation of energy supplied by electric utilities, efficiency in the use of facilities and resources by these utilities, and equitable rates to electricity consumers. It requires each State regulatory authority, in the case of every electric utility for which it has ratemaking authority, and nonregulated electric utilities to consider and determine whether adoption or implementation of 11 ratemaking and regulatory standards is appropriate. They are required to report to the Department of Energy (DOE), the President, and Congress on their actions and to make recommendations on additional Federal actions needed to achieve the purposes of the Act. The Act also requires utilities to file biennially with the Federal Energy Regulatory Commission (FERC) and their respective State regulatory authorities extensive cost-of-service data.

DOE is unclear regarding the specific contents of the annual reports and believes that the contents should focus on the status of the consideration process, not the actual implementation of the standards. The preparation of future annual reports is jeopardized by the Administration's proposed budget cuts. The effectiveness of the DOE annual reports is somewhat weakened by untimely and nonverified information on actual State and utility progress in considering and making a determination on the standards. Some of the data available from sources other than DOE on State and utility ratemaking status are more timely than the material presented in the DOE annual report. There is a wide variance of opinion among utilities regarding the cost of compliance. Officials at small utilities stated that the costs of compliance are especially burdensome to them. Despite serving fewer customers, the load research sample requirements for small utilities are nearly as large as those of the much larger utilities. The current use of filed reports by the Federal Government, States, utilities, and special interest groups is minimal. The content, analyses, and potential use of the data have yet to be thoroughly reviewed by States and special interest groups.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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