Federal Electric Power:
Operating and Financial Status of DOE's Power Marketing Administrations
RCED/AIMD-96-9FS, Oct 13, 1995
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.
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.