Increased Productivity Can Lead to Lower Costs at Federal Hydroelectric Plants

FGMSD-79-15: Published: May 29, 1979. Publicly Released: May 29, 1979.

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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.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretaries of the Army and the Interior should direct the Corps of Engineers and the Bureau of Reclamation to complete the automation and conversion to remote control of those hydroelectric plants where such changes have been evaluated and are both feasible and cost effective. Budget justifications for automated and remote controlled projects should be evaluated where feasible. Uniform maintenance management information systems for use by all organizational levels in operating and maintaining hydroelectric plants should be established. The operation and maintenance costs of hydroelectric power plants should be evaluated, taking into consideration the staffing disparity between the public and private sectors. Further, consideration should be given to reassigning or retraining personnel and eliminating personnel through attrition in plants that are automated or remote controlled. Also, the validity of cost allocations for the current joint activity (for example, flood control and recreation) needs to be assessed.

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