Information on the Request for the Western Area Power Administration To Sell Some Transmission Lines

In response to a congressional request, GAO reviewed the Platte River Power Authority's (PRPA) proposal to purchase certain Western Area Power Administration (WAPA) transmission lines. PRPA buys most of its power from WAPA and constructs, operates, and maintains electric generating plants, transmission systems, and related services for four municipalities in northern Colorado.

PRPA wants to use the lines for future transmission capacity growth in its service area and wants to decrease an estimated 7-percent transmission loss that WAPA has forced it to absorb. If PRPA owned the lines, it would absorb actual losses rather than estimated line losses, which PRPA feels are too high. WAPA has rejected the PRPA proposal to purchase the lines, because WAPA officials feel that yielding control of this particular segment of the system would have a significant local impact, and they believe that there will soon be no integrated Federal system if each entity with Federal lines in its service area assumed control. In addition, other preference customers in the service area strongly oppose the sale. Although Federal power marketing agency sales of portions of their transmission systems are not common, there are some precedents for such sales. WAPA previously sold a deteriorated transmission line system to reduce operating costs, and the Southwestern Power Administration (SWPA) wants to sell 17 percent of its transmission systems which are no longer necessary to service its customers. However, both the prior sale and the proposed SWPA sales do not involve sales of integrated transmission systems. WAPA did not rule out the possible sale of the subject lines or of any other lines at some time in the future. Sale of the lines would provide funds for the Federal treasury and would provide a means for another organization to upgrade the lines without the need for WAPA approval or the expenditure of Federal funds.