Summary: GAO provided additional information on the status of the Great Plains Coal Gasification Project in North Dakota, specifically: (1) the loan default; (2) loan and gas pricing formula; (3) legal matters and agreements; (4) the Department of Energy's (DOE) options and actions; and (5) Great Plains operations.
GAO found that: (1) the pipeline companies that purchased the Great Plains gas are using a substitute pricing formula, between $3.3744 per million British thermal units (BTU) and $5.7106 per million BTU, for billing; (2) DOE cannot sell the property; (3) DOE continues to negotiate an interim agreement with the project operator to continue to operate the project; (4) DOE has no liability under current supply contracts; (5) the validity of the gas purchase agreements is still being debated; (6) a special operating agreement was effected to keep the plant in operation during negotiations and to delay interest and guarantee fee payments; (7) DOE has not made a decision on any option regarding the future of the project; (8) the operator will continue to operate the plant until a decision is made on the project's future; and (9) DOE believes that operating the plant in the interim will not result in higher costs or economic risks.
