Federal Electric Power

Views on the Sale of Alaska Power Administration Hydropower Assets Gao ID: RCED-90-93 February 22, 1990

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) proposed sale of the Alaska Power Administration's (APA) assets, focusing on whether the APA divestiture method would: (1) allow the government to fully recover APA costs; and (2) reveal the full value of APA assets to potential purchasers.

GAO found that: (1) APA sales agreements benefited APA ratepayers at the expense of taxpayers; (2) the bids that APA received probably did not reflect the full market value of its assets, since APA limited the sale to current purchasers of APA power, and to certain state and local concerns; (3) the APA present-value pricing method limited taxpayers' cost recovery by not assuming the assets' residual value following federal loan repayment; (4) the pricing method did not consider that the Department of the Treasury would not recover all interest costs of its loan to APA, since federal power interest rates were usually below the Treasury's borrowing rates; and (5) unresolved possible costs included obtaining rights-of-way across private and Native American lands, and $5.8 million for the completion of a construction project.

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.

Director: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.