Summary: 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.
