Increased Productivity Can Lead to Lower Costs at Federal Hydroelectric Plants

Based on production cost data from the Federal Energy Regulatory Commission, a comparison was made of the operations of Federal and private sector hydroelectric power plants. As the basis of comparison, GAO selected 6 Federal systems, consisting of 95 plants, and 5 comparable private systems, consisting of 47 plants. The large Federal plants were not included because there were no comparable private plants. The review focused on plants operated by the Army Corps of Engineers and the Bureau of Reclamation.

Although operation and maintenance costs for individual plants varied considerably, production costs of the private plants were less than those of Federal systems--$2.72 per kilowatt-hour versus $3.29 per kilowatt-hour, based on plant capacity. Based on 1973 to 1975 data, the Federal hydroelectric systems had about 48 percent more employees per plant than private systems. Assuming that Federal plants could have operated with comparable staffing levels, the Government plants would have needed 447 fewer employees. Delays in the design or installation of automation and remote control in 17 Corps and Bureau projects have prevented the Government from saving potentially $1.5 million. Close control of maintenance costs can also yield savings at hydroelectric plants. Neither the Corps nor the Bureau has a uniform maintenance management information system that allows managers to evaluate maintenance performance effectively.

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