The Bonneville Power Administration's Oversight Activities Related to Washington Public Power Supply System

GAO discussed the Bonneville Power Administration's (BPA) oversight of the Washington Public Power Supply System (WPPSS), focusing on the impact of WPPSS-related costs on the rates charged by BPA; BPA rights and opportunities with regard to oversight of WPPSS; and BPA policies, procedures, and programs for oversight of WPPSS. BPA is committed to paying the total cost of two WPPSS projects and 70 percent of the cost of a third WPPSS project. Although none of the projects are producing power, BPA must make principal and interest payments to WPPSS for the bonds used to finance the construction projects. BPA collects the necessary revenues through its power rates. For fiscal year 1984, WPPSS-related costs comprise about 44 percent of the BPA standard rate. The primary objectives of BPA oversight efforts are to successfully complete one construction project and to ensure the quality, safety, and operating capability of the projects. GAO believes that, while BPA has improved its oversight efforts since 1979, further improvements are necessary. GAO stated that: (1) the success of BPA oversight efforts depends on timely and accurate information; (2) procedures are needed to ensure that BPA is taking advantage of all oversight authorities and opportunities; (3) BPA audit coverage of WPPSS is not sufficient to undertake all necessary audits; (4) BPA does not exercise its authority to monitor WPPSS staffing and organization; and (5) BPA does not undertake line-item reviews of WPPSS budgets. GAO believes that recent organizational changes at BPA should alleviate oversight problems that were identified by previous GAO work.