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                                                       Calendar No. 262
116th Congress  }                                            {   Report
                                 SENATE
 1st Session    }                                            {  116-142

======================================================================


 
           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.

                                  [all]