Federal Electric Power:

Controversy Relating to Construction of Transmission Lines

RCED-89-43: Published: Dec 6, 1988. Publicly Released: Jan 5, 1989.

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GAO reviewed the Western Area Power Administration's (WAPA) justifications for conducting a joint transmission line construction project with other utility companies, particularly its proposed Craig/Bonanza line project, to determine: (1) the extent of WAPA participation in the project's costs and the resulting line capacity; and (2) whether WAPA construction activities comply with its legislative authority.

GAO found that: (1) WAPA justified its construction projects on the basis of improving the reliability of the federal transmission system; (2) the projects usually increased WAPA transmission capacity; (3) WAPA sold its excess transmission capacity to other utilities in the past and expected to do so in the future to increase its revenue; (4) private utility companies expressed concern over the Craig/Bonanza and Tracy/Livermore transmission line projects because of the potential for WAPA to deliver excess power to their markets through wheeling arrangements with other suppliers, which could result in a loss of their customers; and (5) although WAPA indicated that its participation in the Craig/Bonanza project was based on estimated cost or resulting line capacity, it did not adequately document the extent of or reasons for its participation.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Department of Energy has fully adopted GAO recommended actions, directing WAPA involvement in joint transmission construction projects.

    Matter: The House Subcommittee on Water and Power Resources should consider examining: (1) WAPA transmission construction activities to improve system reliability; and (2) how WAPA may use transmission capacity beyond that needed for its power marketing activities.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: As of March 31, 1990, this recommendation was closed. WAPA developed formal policy and procedures to comply with the recommended action, dated March 1990.

    Recommendation: The Secretary of Energy should direct the Administrator, WAPA, to establish a formal policy and implement procedures to direct its involvement in joint transmission construction projects, including a requirement for documenting the basis for and the extent of its participation in individual projects.

    Agency Affected: Department of Energy

 

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