Objectives, Scope, and Methodology

As requested by the Chairman, Subcommittee on Water and Power, House Committee on Resources, we examined the (1) reliability of the Bureau’s and Corps’ hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau’s and the Corps’ plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau’s and the Corps’ plants. However, the Bureau’s and the Corps’ hydropower plants are generally less reliable in generating electricity than nonfederal plants.The Bureau’s and the Corps’ hydropower generating units have been in outage status more of the time for forced and scheduled outages. From 1993 through 1997, nonfederal hydropower generating units were available to generate electricity an average of 91.3 percent of the time. The Bureau’s availability factor improved from 80.9 percent of the time in 1993 to 86.6 percent in 1997. From 1993 through 1997, the Bureau’s units in the Pacific Northwest were available to generate power an average of about 78.7 percent of the time, and the Corps’ units were available an average of 85.4 percent of the time. Funding Processes’ Impacts on the Reliability of Hydropower Plants

The Bureau’s and the Corps’ plants were less reliable than nonfederal plants partly because, under the federal planning and budget cycle, they could not always obtain funding for maintenance and repairs when needed. As a result, the agencies delay repairs and maintenance until funds become available. The PMAs’ electricity generally is priced less than other electricity. However, because markets are becoming more competitive, the PMAs’ customers will have more suppliers from which they can buy electricity. In more competitive markets, the reliability of the federal electricity will have to be maintained or improved to maintain the competitiveness of federal electricity and thus help ensure that the federal government’s $22 billion appropriated and other debt will be repaid. In addition, the Congress, the Office of Management and Budget (OMB), and we have been working to help ensure that the purchase and maintenance of all assets and infrastructure have the highest and most efficient returns to the taxpayer and the government. However, in competitive markets, increased rates decrease the marketability of federal electricity, as nonfederal electricity rates are expected to decline. By enabling repairs to be made on time, they have the potential to help improve the reliability of the PMAs’ electricity and to continue its existing rate-competitiveness. Objectives, Scope, and Methodology

As requested by the Chairman, Subcommittee on Water and Power, House Committee on Resources, we examined (1) the reliability of the Bureau’s and Corps’ hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau’s and the Corps’ plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau’s and the Corps’ plants. 5. 10. 11. 13. 14. 15. 16. 8.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the: (1) reliability of the Bureau of Reclamation's and Army Corps of Engineers' hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau's and the Corps' plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau's and the Corps' plants.

What GAO Found

GAO noted that: (1) the Bureau's and the Corps' hydropower plants are generally less reliable in generating electricity than nonfederal hydropower plants; (2) the reliability of the Bureau's hydropower plants has improved recently, while the Corps' has remained relatively unchanged; (3) from 1993 through 1997, the Bureau's units were available to generate electricity an average of about 83 percent of the time compared with about 91 percent for nonfederal units; (4) the availability of the Bureau's units to generate electricity improved from about 81 percent of the time in 1993 to about 87 percent in 1997; (5) the Corps' units were available to generate electricity an average of about 89 percent of the time during the period 1993 through 1997; (6) the Bureau's and the Corps' units in the Pacific Northwest were available about 79 percent and 85 percent of the time, respectively; (7) the Bureau's and the Corps' plants were less reliable because they could not always obtain funding for maintenance and repairs when needed; (8) GAO found that because of uncertain funding, the agencies delay repairs and maintenance until funds become available; (9) GAO also found that these delays caused frequent, extended outages and inconsistent plant performance; (10) the power marketing administrations' (PMA) electricity is generally priced less than other electricity; (11) however, as markets become more competitive, PMAs' customers will have more suppliers from whom they can buy electricity; (12) as nonfederal electricity rates decline in competitive markets, a portion of the federal government's appropriated and other debt of about $22 billion may be at risk of nonrecovery if the federal electricity does not continue to be marketable; (13) a factor affecting the marketability of this electricity is its reliability; (14) Congress, the Office of Management and Budget, and GAO have been working to help ensure that the purchase and maintenance of all assets and infrastructure have the highest and most efficient returns to the taxpayer and the government; (15) the Bureau, the Corps, and the PMAs have taken actions to obtain funding to maintain and repair their hydropower plants; (16) these actions involve directly funding maintenance and repairs from the PMAs' electricity revenues or from funds contributed by the power customers; and (17) by enabling repairs to be made in a timely manner, these actions have the potential to help to improve the reliability of the PMAs' electricity and to continue their existing rate-competitiveness.