[Senate Report 115-309]
[From the U.S. Government Publishing Office]
Calendar No. 534
115th Congress } { Report
SENATE
2d Session } { 115-309
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WESTERN AREA POWER ADMINISTRATION TRANSPARENCY ACT
_______
July 31, 2018.--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. 930]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 930) 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
with an amendment in the nature of a substitute and recommends
that the bill, as amended, do pass.
AMENDMENT
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Western Area Power Administration
Transparency Act''.
SEC. 2. WESTERN AREA POWER ADMINISTRATION PILOT PROJECT.
(a) In General.--Not later than 120 days after the date of
enactment of this Act, the Administrator of the Western Area Power
Administration (referred to in this section as the ``Administrator'')
shall--
(1) establish a pilot project, as part of the continuous
process improvement program and to provide increased
transparency for customers
(A) to make available a database of information
relating to the Western Area Power Administration in
accordance to paragraph (2); and
(B) to provide annual updates to the database in
accordance with subsection (b); and
(2) publish on a publically available website of the Western
Area Power Administration, a database of the following
information, beginning with fiscal year 2008, relating to the
Western Area Power Administration:
(A) By power system and in a consistent format, rates
charged to customers for power and transmission
service.
(B) By power system, the amount of capacity or energy
sold.
(C) By region, an accounting, at the task level,
budget activity level, organizational code level, and
object class level, of all expenditures, including--
(i) indirect costs, including overhead costs;
(ii) direct charges and direct allocations;
(iii) costs related to contract staff;
(iv) costs related to independent
consultants;
(v) the number of full-time equivalents;
(vi) charges to the regions from the
headquarters office of the Western Area Power
Administration for all annual and capital
costs; and
(vii) expenses incurred on behalf of other
Federal agencies or programs or third parties
for the administration of programs not related
to the marketing, transmission, or wheeling of
Federal hydropower resources within the Western
Area Power Administration marketing area,
including--
(I) indirect costs, including
overhead costs;
(II) direct charges and allocations;
(III) costs related to contract
staff; and
(IV) the number of full-time
equivalents.
(D) For the headquarters office of the Western Area
Power Administration, an accounting, at the task level,
budget activity level, organizational code level, and
object class level, of all expenditures, including--
(i) indirect costs, including overhead costs;
(ii) direct charges and direct allocations;
(iii) costs related to contract staff;
(iv) costs related to independent
consultants'
(v) the number of full-time equivalents;
(vi) a summary of any expenditures described
in this paragraph, with the total amount paid
by each region and power system; and
(vii) expenses incurred on behalf of other
Federal agencies or programs or third parties
for the administration of programs not related
to the marketing, transmission, or wheeling of
Federal hydropower resources within the Western
Area Power Administration marketing area,
including--
(I) indirect costs, including
overhead costs;
(II) direct charges and allocations;
(III) costs related to contract
staff; and
(IV) the number of full-time
equivalents.
(E) Capital expenditures for each project,
including--
(i) Capital investments delineated by the
year in which each investment is placed into
service; and
(ii) the sources of capital for each
investment.
(b) Annual Summary.--
(1) In General.--Not later than 120 days after the end of
each fiscal year in which the pilot project is being carried
out under this section, the Administrator shall make available
on a publicly available website--
(A) updates to documents made available on the date
of the initial publication of the information on the
website under subsection (a)(2);
(B) an identification of the annual changes in the
information published on the website under subsection
(a)(2);
(C) the reasons for the changes identified under
subparagraph (B);
(D) subject to paragraph (2), the total amount of the
unobligated balances retained by the Western Area Power
Administration at the end of the prior fiscal year
within each project and headquarters by--
(i) purpose or function;
(ii) source of funding;
(iii) anticipated program allotment; and
(iv) underlying authority for each source of
funding; and
(E) the anticipated level of unobligated balances
that the Western Area Power Administration expects to
retain at the end of the fiscal year in which the
annual summary is published, as delineated by each of
the categories described in clauses (i) through (iv) of
subparagraph (D).
(2) Limitation.--Amounts in the Upper Colorado River Basin
Fund established by section 5(a) of the Act of April 11, 1956
(commonly known as the ``Colorado River Storage Project Act'')
(43 U.S.C. 620d(a)), shall not be considered to be an
unobligated balance retained by the Western Area Power
Administration for purposes of paragraph (1)(D).
(c) Termination.--The pilot project under this section shall
terminate on the date that is 7 years after the date of enactment of
this Act.
PURPOSE
The purpose of S. 930 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. 930 was introduced by Senator Flake on April 25, 2017.
The Subcommittee on Water and Power held a legislative hearing
on S. 930 on June 14, 2017.
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 Committee on Energy and Natural Resources met in open
business session on May 17, 2018, and ordered S. 930 favorably
reported, as amended.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on May 17, 2018, by a majority voice vote
of a quorum present recommends that the Senate pass S. 930, if
amended as described herein.
COMMITTEE AMENDMENT
During its consideration of S. 930, the Committee adopted
an amendment in the nature of a substitute. For purposes of
accounting for regional and WAPA headquarters-related costs,
the amendment deleted the terms ``functional level,'' ``capital
costs,'' and ``staffing costs'' and inserted the terms ``task
level,'' ``organizational code level,'' and ``object class
level.'' The amendment is further described in the section-by-
section analysis.
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 publically available website on an
annual basis, including changes published by the Administration
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 following estimate of the costs of this measure has
been provided by the Congressional Budget Office:
S. 930 would direct the Western Area Power Administration
(WAPA) to make more information about its financial operations
available to the public. WAPA is an agency within the
Department of Energy that markets electricity produced at
federally owned dams in several western states. WAPA's
expenditures are funded by annual appropriations and are offset
over time by income from the sale of electricity.
Using information from WAPA, CBO estimates that
implementing S. 930 would cost less than $500,000 over the
2019-2023 period, subject to the availability of appropriated
funds, and would primarily involve making existing data
available in new formats. According to WAPA, much of that work
is being done under current law. Enacting [Title] would not
affect direct spending or revenues; therefore, pay-as-you-go
procedures do not apply.
CBO estimates that enacting S. 930 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
S. 930 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
On August 16, 2017, CBO transmitted a cost estimate for
H.R. 2371 as ordered reported by the House Committee on Natural
Resources on July 26, 2017. The provisions in the two bills are
similar and the estimated costs are the same.
The CBO staff contact for this estimate is Kathleen Gramp.
The estimate was reviewed by Theresa Gullo, Assistant Director
for Budget Analysis.
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. 930. 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. 930, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 930, 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 testimony provided by the U.S. Department of Energy at
the June 14, 2017, hearing on S. 930 follows:
Statement of Mr. Mark A. Gabriel, Administrator, Western Area Power
Administration, U.S. Department of Energy, Before the Subcommittee on
Water and Power, Committee on Energy and Natural Resources, United
States Senate
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 the bill as ordered
reported.