	Operating Information

The PMAs—Alaska Power Administration (Alaska), Bonneville Power Administration (Bonneville), Southeastern Power Administration (Southeastern), Southwestern Power Administration (Southwestern), and Western Area Power Administration (Western)—were established from 1937 through 1977 to sell and transmit electricity generated mainly from federal hydropower facilities. Western owns and operates over 16,000 miles of transmission lines serving customers in all or parts of 15 states. In 1994, Bonneville accounted for about 69 percent of total PMA revenues. In addition, table I.2 in appendix I shows some operating statistics including the amount of generating capacity used to generate the power sold by the PMAs, and the number of power plants, miles of transmission lines, and employees for each PMA, as of September 30, 1994. As shown in figure 3, as a whole, public power customers are not dependent on the PMAs as their sole source of power. The PMAs, other than Bonneville, generally receive appropriations annually to cover operations and maintenance expenses and capital investments in their transmission assets.10, 11,  In fiscal year 1994, the PMAs received about $328 million in appropriations. The PMAs do not set their rates to earn a profit. The gross repayable investment assigned to be repaid by power revenues totaled nearly $34 billion, as of September 30, 1994. The PMAs generated about $3.2 billion in power-related revenues in fiscal year 1994. In addition, the PMAs’ weighted average interest rates on their outstanding debt to the Treasury ranged from 2.7 to 4.6 percent in fiscal year 1994.This compares with an average interest rate of 8.1 percent on outstanding long-term debt for the nation’s 179 largest investor-owned utilities in 1993, according to a DOE report. Because the PMAs’ debt is at low interest rates, four of the five PMAs have been able to carry high levels of debt without a corresponding increase in financial risk. However, as explained in the following discussion on competitive issues, high levels of debt currently pose problems for Bonneville and could pose problems for other PMAs in a more competitive environment. 3. 5. A Study of Power Marketing Administration Selected Financial Management Practices. U.S. Department of Energy.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the Department of Energy's five power marketing administrations (PMA), focusing on operating, financial, and competitive issues facing PMA.

What GAO Found

GAO found that: (1) five PMA were established between 1937 and 1977 to sell and transmit electricity generated mostly from federal hydropower facilities; (2) PMA power accounted for about 3 percent of the power generated nationally in 1993; (3) each PMA owns and operates about 16,000 miles of transmission lines, serves customers in up to 15 states, and is headed by an appointed administrator that is authorized to make PMA operation decisions; (4) all PMA are required to give preferences in power sales to public power customers, but these customers are not dependent on PMA as their sole source of power; (5) although PMA operations and maintenance expenses and capital investments are covered by congressional appropriations, PMA are required to repay their transmission asset appropriations; (6) PMA are required to set their power rates to generate only enough revenue to recover costs; (7) PMA generated about $3.2 billion in power-related revenues in fiscal year 1994, but gross repayable investments totalled $34 billion as of September 1994; (8) as of September 1994, $23 billion of PMA cumulative debt was outstanding; (9) PMA are required to repay their debt and interest using revenues generated from power sales; and (10) although most PMA have been able to carry high levels of debt without an increase in financial risk, high levels of PMA debt could pose problems for PMA in a more competitive marketplace.