Department of Energy:

Savings from Deactivating Facilities Can Be Better Estimated

RCED-95-183: Published: Jul 7, 1995. Publicly Released: Aug 7, 1995.

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Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) plans to deactivate surplus facilities, focusing on the: (1) proportion of the Nuclear Material and Facility Stabilization Program's fiscal year (FY) 1995 budget that is allocated to projects that could reduce the program's future costs; (2) difference between the savings that the deactivation projects could generate and the costs DOE could incur to obtain these savings; and (3) reliability of DOE savings estimates from major deactivation projects.

GAO found that DOE: (1) has allocated about 31 percent of the program's available FY 1995 funding to 24 deactivation projects at three key sites to reduce future program costs; (2) could realize a combined net savings of $458 million from 11 projects over 10 to 30 years; (3) has not developed a process for consistently estimating the net savings from deactivation projects, resulting in its inability to develop reliable or complete estimates of potential net savings from these projects; and (4) must be able to target funds more effectively, since it expects that the number of facilities managed by the program may increase from 1,560 to about 5,900 facilities by 1997.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE's Office of Environmental Management is preparing a new plan, known as the 2006 Plan, to reduce environmental risks and complete projects within 10 years. To implement GAO's recommendation, as part of preparing the 2006 Plan, program officials have prepared guidance that would require field offices to use discounted costs when estimating savings from deactivating surplus energy facilities, as well as, savings from other cleanup decisions. Program officials expect that the next draft of the 2006 Plan will use this guidance and the program will begin to use the approach to prepare its fiscal year 1999 budget request.

    Recommendation: The Secretary of Energy should issue guidance that defines how to prepare reliable and complete estimates of potential net savings from deactivation projects.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: As discussed under the status section for the first recommendation, program officials expect that guidance for estimating cost savings from projects will be used to prepare the fiscal year 1999 budget.

    Recommendation: The Secretary of Energy should require Office of Environmental Management officials to use estimates of projects' net savings, in addition to other information such as health and safety risks, to determine priorities for deactivating facilities.

    Agency Affected: Department of Energy

 

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