Energy Regulation:

More Effort Needed To Recover Costs and Increase Hydropower User Charges

RCED-87-12: Published: Nov 25, 1986. Publicly Released: Jan 12, 1987.

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In response to a congressional request, GAO evaluated the Federal Energy Regulatory Commission's (FERC) responsibilities under the Federal Power Act (FPA) to assess and collect three annual charges from licensees participating in its hydropower licensing program.

GAO found that: (1) FERC has taken steps to increase its administrative cost collection by including other federal agency costs in its annual billings to licensees; (2) FERC is finalizing rulemaking that revises the basis for valuing federal lands used for hydropower projects; (3) an analysis of the potential impact of increased land-use charges on licensees and their customers showed that the impact would likely be minimal; and (4) land exchanges have not affected the FERC assessment process except where legislatively exempted. GAO also found that efforts to: (1) provide additional guidance and clarification of cost data requirements appears to be a positive step in encouraging agencies to provide their administrative costs to FERC for billing licensees; and (2) ensure the recovery of reasonable charges for use of federal lands and reduce interest costs from delayed billings to licensees also are in progress.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: At the urging of FERC, the Forest Service submitted its fiscal year 1986 administrative costs applicable to FERC licensing activities. These costs amounted to $262,000.

    Recommendation: To ensure that all administrative costs attributable to the hydropower licensing program are recovered, the Chairman, FERC, should have the Director, Office of Program Management, work with officials of the Forest Service to apportion their administrative costs between activities under the Federal Land Policy and Management Act and FPA and seek recovery of all FPA-related costs.

    Agency Affected: Federal Energy Regulatory Commission

  2. Status: Closed - Implemented

    Comments: Final rulemaking is complete and revised land-use charges billed with increased collections of about $800,000.

    Recommendation: To ensure that FERC assesses reasonable hydropower charges for usage of federal lands and minimizes federal interest costs, the Chairman, FERC, should take steps to ensure that a final rule to revise land-use charges and change the current annual administrative charge billing cycle is completed in a manner that authorizes land-use charges to become effective January 1, 1987.

    Agency Affected: Federal Energy Regulatory Commission


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