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Capitol Power Plant: Actions Needed to Improve Operating Efficiency

543121 Published: Apr 08, 2005. Publicly Released: Apr 08, 2005.
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Highlights

The Consolidated Appropriations Act for Fiscal Year 2005 mandated that we study the costs, cost effectiveness, benefits, and feasibility of the Architect of the Capitol (AOC) entering into a contract with a private entity for the management and operation of the Capitol Power Plant (CPP). This report addresses that mandate. In conducting our analysis, we interviewed CPP managers and reviewed April 1996 and November 2004 consultant reports completed for AOC that evaluate technical and economic aspects of plant operations. We also contracted with a technical consultant specializing in heating plant operations to provide a peer review engineering assessment of AOC's November 2004 consultant report. We performed our work in March 2005 in accordance with generally accepted government auditing standards.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Architect of the Capitol By the end of fiscal year 2005, AOC should develop an implementation plan for adopting its consultant's November 2004 recommendations without decreasing system reliability or violating environmental air permits that are in effect. The consultant's report recommended that AOC use the most economically priced fuel to operate the steam boilers and reduce current CPP staff from 88 positions to 46 positions.
Closed – Not Implemented
AOC has progressed in its efforts to use the most economically priced fuel by repairing plant steam boilers and resolving previous operational problems to allow for greater use of coal, which is currently the most economical fuel available to the Capitol Power Plant (CPP). In addition, AOC officials said they are in the process of conducting an ongoing bio-diesel feasibility study that may help identify more efficient energy initiatives for the future. Concerning its efforts to reorganize CPP, AOC developed a CPP staff reorganization plan that is being reviewed by the Acting Architect and considered for approval. According to an AOC Workforce Planning official, the plan does not take into consideration the recommendations of its consultant's workload analysis. CPP officials began preliminary work on a staff reduction plan, but AOC management and Workforce Planning officials have yet to be involved in the plan's development.
Architect of the Capitol AOC should not wait to implement prudent operational and incremental organizational changes in anticipation of a more permanent organization when the West Refrigeration Plant Expansion project is complete. If carefully planned, anticipated workforce reductions can be managed in a manner that minimizes adverse impacts. Workforce planning can result in CPP employees being placed in other AOC organizations and can account for natural attrition by considering retirement eligibility of current employees.
Closed – Implemented
AOC has made limited progress in carrying out our recommendation to implement prudent operational and incremental organizational changes in anticipation of a more permanent organization when the West Refrigeration Plant Expansion project is complete, which is expected in November 2006. AOC's ability to make operational changes has been largely impacted by problems with its coal boilers, as previously discussed. Concerning incremental organizational changes, AOC indicated in its May 12, 2006, correspondence that it has taken steps to modify existing positions--as they have been vacated--to reflect the additional skill sets required to successfully operate and maintain the modernized plant. These steps are intermediate to permanent staffing changes that are expected to be made once AOC completes its ongoing staffing study. AOC's ability to make additional operational changes is limited by the current diminished condition of CPP's boilers. Moreover, the pending completion of AOC's staffing study, that will include a phased implementation plan to achieve CPP's permanent organizational structure, will supersede the need to make interim changes. Accordingly, we expect no more progress to be made in terms of AOC implementing this recommendation.

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Topics

Contract administrationCost analysisCost effectiveness analysisManagement and operating contractsPowerplantsPrivatizationPower plantsHuman capital managementOutsourcingPeer review