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Calendar No. 262
116th Congress } { Report
SENATE
1st Session } { 116-142
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WESTERN AREA POWER ADMINISTRATION TRANSPARENCY ACT
_______
October 23, 2019.--Ordered to be printed
_______
Ms. Murkowski, from the Committee on Energy and Natural
Resources, submitted the following
R E P O R T
[To accompany S. 1931]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1931) to require the Administrator of the
Western Area Power Administration to establish a pilot project
to provide increased transparency for customers, and for other
purposes, having considered the same, reports favorably thereon
without amendment and recommends that the bill do pass.
PURPOSE
The purpose of S. 1931 is to require the Administrator of
the Western Area Power Administration (WAPA) to establish a
pilot project to provide increased transparency for customers.
BACKGROUND AND NEED
WAPA is one of four Power Marketing Administrations charged
with the marketing and transmission of hydropower from Federal
facilities. WAPA markets power from 56 hydropower plants to
nearly 700 wholesale customers, serving over 40 million people
in 15 states across the western United States.
WAPA's roughly $1 billion annual budget is funded through a
combination of direct appropriations and revenues collected
from its customers. Over time, differences between budgeted and
executed amounts have built up large unobligated balances.
Certain levels of unobligated balances are a necessary
financing tool that agencies like WAPA use to avoid sudden
spikes in needed appropriations or electric rates for both
planned and unanticipated capital projects. However, in an
October 2015 report entitled ``2013 Sequestration and
Shutdown,'' the Government Accountability Office found that
WAPA's unobligated balances exceeded the levels it needed to
execute its mission.
In response to calls for increased transparency, WAPA
created an online repository of financial information. This
repository has helped improve transparency, but additional
steps would allow a more detailed understanding of how WAPA is
using taxpayer and ratepayer funds and ensure that customers
have the ability to engage constructively with WAPA on
operations and spending decisions.
LEGISLATIVE HISTORY
S. 1931 was introduced by Senators McSally and Sinema on
June 20, 2019.
A similar measure, H.R. 4444, was introduced by
Representative Gosar in the House of Representatives on
September 20, 2019.
In the 115th Congress, S. 930 was introduced by Senator
Flake on April 25, 2017. On June 14, 2017, the Subcommittee on
Water and Power held a legislative hearing on S. 930 (S. Hrg.
1151-38). The Committee on Energy and Natural Resources met in
open business session on May 17, 2018, and ordered S. 930
favorably reported, as amended (S. Rept. 115-309).
A similar measure, H.R. 2371, was introduced by
Representative Gosar in the House of Representatives on May 4,
2017. The Natural Resources Committee's Subcommittee on Water,
Power and Oceans held a hearing on H.R. 2371 on May 18, 2017.
The bill was reported by the Natural Resources Committee by
unanimous consent on July 26, 2017, and was passed by the House
of Representatives by voice vote on February 7, 2018.
In the 114th Congress, a similar provision was included in
S. 2012, the Energy Policy Modernization Act of 2016, which the
Senate passed on April 20, 2016, by a vote of 85-12.
The Senate Committee on Energy and Natural Resources met in
open business session on September 25, 2019, and ordered S.
1931 favorably reported.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on September 25, 2019, by a majority
voice vote of a quorum present, recommends that the Senate pass
S. 1931.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
Section 1 sets forth a short title.
Section 2. Western Area Power Administration pilot project
Section 2(a) directs the WAPA Administrator to establish a
pilot project to provide increased transparency for customers
by making an information database available and annually
updating the database with the following WAPA-related
information, beginning with fiscal year 2008: rates charged to
customers for power and transmission service by power system;
the amount of capacity or energy sold by power system; and an
accounting at the task level, budget activity level,
organizational code level, and object class level of all
expenditures by region and for the headquarters office; and
capital expenditures for each project.
Subsection (b) directs the Administrator to update the
information provided on the publicly available website on an
annual basis, including changes published by WAPA and the
rationale for such changes; the total amount of unobligated
balances retained at the end of the prior fiscal year within
each project and at headquarters, excluding amounts in the
Upper Colorado River Basin Fund (43 U.S.C. 620d(a)); and the
anticipated level of unobligated balances WAPA expects to
retain at the end of the fiscal year. Updates must be completed
within 120 days after the end of the fiscal year.
Subsection (c) terminates the pilot project seven years
after the Act's enactment.
COST AND BUDGETARY CONSIDERATIONS
The Congressional Budget Office estimate of the costs of
this measure has been requested but was not received at the
time the report was filed. When the Congressional Budget Office
completes its cost estimate, it will be posted on the internet
at www.cbo.gov.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 1931. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 1931, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 1931, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
EXECUTIVE COMMUNICATIONS
The Committee did not request executive views on S. 1931.
The testimony provided by the U.S. Department of Energy at the
June 14, 2017, hearing on S. 930, similar legislation, during
the 115th Congress follows:
Statement of Mr. Mark A. Gabriel, Administrator Western Area Power
Administration, U.S. Department of Energy
Mr. Chairman and members of the subcommittee, I am Mark A.
Gabriel, Administrator of Western Area Power Administration
(WAPA)-one of four power marketing administrations within the
Department of Energy whose role is to market and transmit
wholesale electricity from multi-use Federal water projects.
For the past 40 years WAPA has supplied at-cost electricity
to hundreds of municipalities, rural electric cooperatives,
public utilities, irrigation districts, Federal and state
agencies, military installations, and Native American tribes
across 15 states. Forty million people benefit from the Federal
hydropower and transmission services WAPA provides.
They depend on us to provide reliable service, not only
today, but also into the future. Low-cost Federal hydropower
was a cornerstone in the development of the West, and it
remains a key element of the economic life in maintaining
strong communities. WAPA serves a diverse customer base across
a 15-state territory the size of Paris to Moscow and Athens to
Oslo. We are a complex organization with 10 rate-setting
systems. Our employees work tirelessly to maximize the value of
the hydropower we market. We do this by offering the lowest-
cost rates consistent with sound business principles.
Let me begin by saying that WAPA is committed to
transparency, and so am I. In the four years I have served as
the head of the organization, we have proactively taken
multiple steps to evolve and increase our transparency efforts,
and we will continue to do so.
Now, I would like to address what I believe has prompted
this proposed legislation: Some of our customers want access to
more information that informs our planning and operations at
our Headquarters office and an understanding of how it relates
to our annual budget and ultimately, their rates. This is a
reasonable request and we are working toward that end with many
of our customers through our multiple processes.
I understand customer concern for rates. As consumers, they
are right to ask questions. Our rates, are extremely
competitive. For example, our customers in Arizona benefit from
rates that are significantly less than comparable wholesale and
retail rates. In our Upper Great Plains Region, due to
partnership and forward-looking planning, customers will be
seeing rate reductions in 2018, the second year in a row.
Now back to our growth. Our Headquarters staff and budget
has, in fact, grown over the past decade. It is bringing value
to our organization--and customers--and keeps us well-
positioned amid changing times in our dynamic industry. It is
aligned with our commitment to business excellence and sound
business practices, and enables us to continue delivering our
mission and maximize the value of hydropower for all of our
customers.
Our growth in headquarters staff has allowed us to build a
Continuous Process Improvement Program that has resulted in $34
million in cost-avoidance and cost-savings--a 217-percent
return on investment. Some of our ``growth,'' is not growth at
all, but an organizational realignment and shifting of budget
that resulted in increased efficiencies, and allows us to
improve our ability to adhere to mandatory compliance standards
and laws, such as Critical Infrastructure Protection and the
Federal Information Technology Acquisition Reform Act. Some of
our customers may not agree with the changes that we have made.
I believe it is, in part, because we did not do a good enough
job communicating early and sufficiently.
We have already begun to increase transparency specifically
regarding our headquarters budget. I am proud of the efforts
that began three years ago to address transparency and
communication gaps, and the incremental progress we have since
made.
Customers have stated they are already seeing improvements
in how we engage with them on budget issues. We are working
well with the Mid-West Electric Consumers Association, our
California customer base, and the Colorado River Energy
Distributors Association. Thanks to our customers in Arizona we
are now partners in a Customer Technical Committee to address a
number of improvement opportunities including financial
transparency.
We developed a more consistent 10-Year Planning process
across our regional offices, hosted annual all-customer
meetings since 2014, and, last year, opened up our Headquarters
10-Year Planning process to customers with more engagement in
the coming year. Additionally, we host or attend more than 300
meetings with customers every year to share information and
answer questions.
Just over a year ago we launched The Source-a page on our
website dedicated to sharing operational and auditable
financial statements. Much of the information was already on
our website, but we brought it to one convenient location and
put it front and center. It includes annual reports,
presentations, a searchable index of power system data, rates
information, key topics and customer news.
We have produced and made available reams of data. We have
memorandums of understanding in place with many customer
groups, agreeing to share and discuss financial information. We
are exploring ways to further expand our engagement.
Our recent transparency efforts are consistent with the
spirit of the proposed transparency legislation.
We are committed to sharing information openly and honestly
and providing a mechanism for feedback. As an organization, we
are accountable for delivering on our mission and responsible
for the stewardship of our program and resources for all of our
region's customers.
As a public servant charged with leading a federal
organization--a utility--I am ultimately responsible for the
safe and reliable operation of our large and interconnected
generation and transmission system. I take my responsibility in
earnest.
Thank you for the opportunity to speak with you today. I
look forward to answering your questions.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by S. 1931 as ordered
reported.
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