Review of the General Services Administration's Electric Utility Intervention Activities

EMD-81-95: Published: Jun 12, 1981. Publicly Released: Jun 12, 1981.

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Under the Property and Administrative Services Act, the General Services Administration (GSA) has the management responsibility for ensuring that the Government makes economical purchases of public utility services. To ensure that utility rates are reasonable, GSA intervenes or authorizes other Federal agencies to intervene in State regulatory hearings on retail rate increases proposed by utility companies. GAO reviewed the GSA intervention procedures and controls and evaluated the adequacy of the methods being used to identify significant rate cases, provide guidance to the GSA technical staff assigned to the cases, coordinate GSA and other Federal agency intervention activities, and report on intervention results.

There are four areas in which the GSA management procedures or controls for its intervention efforts could be improved. These areas are: (1) identifying significant rate cases, (2) providing program guidance, (3) delegating intervention activities, and (4) reporting results. Because GSA does not have adequate information on the cost of services provided by 20 public utility cmpanies, it was unable to determine whether intervention was warranted in 8 of the 45 electric rate cases made during the first half of fiscal year 1981. This information could be collected from either public utility companies or Federal electric consumers. Because the issues involved in the rate cases are very complex and technical, GSA must have or be able to call upon technical specialists to protect the Government's interests. While GSA has increased its intervention staff, the staff is inexperienced. GSA has not provided the guidance needed to analyze other major rate case issues which must be addressed by the Government to present convincing testimony in State regulatory hearings. GSA has not established a procedure for ensuring that its intervention staff analyzes the information that it requires other agencies to provide. Reports of intervention actions are not adequate for providing GSA management with a proper perspective on the contribution made by the intervention staff.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator of GSA should direct the Commissioner of the Transportation and Public Utilities Service to ensure that planed corrective actions are implemented to (1) determine the completeness and accuracy of GSA's information on Federal purchases of public utility services; (2) determine whether it would be more cost effective and appropriate to collect additional cost data on these purchases; and (3) provide guidance to the intervention staff on the most significant rate case issue.

    Agency Affected: General Services Administration


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