Electricity Regulation

The Federal Energy Regulatory Commission (FERC) regulates about 1,670 nonfederal hydroelectric projects across the country. FERC's main concern is that project operators abide by terms and conditions designed to protect people, property, and the environment. GAO concludes that FERC's monitoring procedures and practices are adequate to ensure that these projects are complying with its requirements. FERC's procedures for investigating allegations of noncompliance with license requirements are adequate and generally followed. FERC's monitoring and enforcement efforts to ensure structural soundness, public safety, and environmental protection are showing positive results. The number of violations committed each year fell from 157 in fiscal year 1989 to 87 in 1993, a 45-percent decline. Over the same period, FERC increased its enforcement efforts against project owners who commit violations. Compliance orders, which are directives to correct deficiencies, jumped from 26 to 37; fines totaling $3.7 million were levied against 31 projects; and eight licenses were revoked.

GAO found that: (1) FERC monitoring procedures and practices are adequate to ensure that nonfederal hydroelectric projects comply with its requirements; (2) FERC inspects nonfederal hydroelectric projects once every 1-1/2 years and high-hazard projects annually; (3) although the current FERC workforce has been able to adequately monitor projects' compliance with existing requirements, the current workforce may be insufficient to ensure their compliance with future environmental requirements; (4) FERC procedures for investigating noncompliance allegations are adequate and generally followed; (5) FERC investigated all of the allegations it received between 1989 and 1993; (6) in 1993, FERC reduced its average investigation time from 347 to 89 days; (7) FERC monitoring and enforcement efforts to ensure structural soundness, public safety, and environmental protection have been effective; (8) between 1989 and 1993, the number of violations committed decreased from 157 to 87 and the number of enforcement actions increased from 26 to 37; (9) FERC levied $3.7 million in fines and revoked 8 licenses against facilities that were not in compliance; and (10) FERC attributes the reduction in project noncompliance to the increased scope and proficiency of FERC inspection and compliance work.