Federal Electric Power

Pursuant to a congressional request, GAO provided information about the Colorado River Storage Project, a comprehensive federal water project designed to develop the Upper Colorado River Basin's water resources, focusing on: (1) investment costs and repayments; (2) power sales revenues; (3) power asset values; (4) wholesale power rates; and (5) the effects of its Central Utah Project's proposed modification of a planned power system to enable it to provide commercial power.

GAO found that: (1) the federal government expected to recover about $1.8 billion of its $2.5-billion project investment as of September 30, 1987; (2) the project had repaid about $630 million of the investment; (3) the federal government expected reimbursable investment costs to total about $3.9 billion; (4) the project estimated that power customers would provide 80.6 percent of revenues, with municipal and industrial water customers and irrigators contributing most of the remaining revenues; (5) project revenues will pay for operating costs, interest, and the reimbursable investment costs; (6) power revenues averaged $106 million annually between 1980 and 1987; (7) the book value of the project's power assets was $741.8 million as of September 30, 1987; (8) the project's composite wholesale electric power rates have ranged from 6.15 to 9.92 mills per kilowatt-hour from 1980 to March 1989; (9) the proposed power system would cost about $1.91 billion and provide about 18 megawatts of power for project-pumping purposes; (10) to pay for the proposed power system, the project would need to increase its wholesale electric power rates from 9.92 to 11.08 mills per kilowatt-hour; and (11) an alternative power system design, which would add about 60 megawatts of commercial power to the system and increase costs to $1.957 billion, would increase the project's rate to between 10.66 and 11.34 mills per kilowatt-hour.