Federal Power:

Additional Information on Repaying Federal Investments in Electric Power Facilities

RCED-86-44FS: Published: Nov 12, 1985. Publicly Released: Dec 12, 1985.

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In response to a congressional request, GAO provided information on the basis of the Department of Energy's (DOE) practice of: (1) repaying the federal investment in power facilities within 50 years; and (2) charging an interest penalty when interest payments on the federal investment are deferred.

GAO found no documentation to explain the basis for the determination that 50 years is a reasonable period in which to amortize federal investment in a project; however, this period has become a well-established administrative practice and, in authorizing certain individual projects, Congress has specified a repayment period of 50 years. In addition, GAO found that DOE and Department of the Interior orders require interest to be charged on deferred interest, and Congress has viewed the interest penalty as an incentive for timely repayment.

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