Report on audit of Bonneville Power Administration`s energy resource programs
The Bonneville Power Administration (Bonneville) must ensure that the costs of its contracts for energy resources are as low as reasonably possible and that the resources are needed. During the audit, we reviewed Bonneville`s energy resource programs and focused on its purchase of electrical output from natural gas fired combustion turbines. The objective of this audit was to determine if Bonneville paid excessive costs to acquire the electrical output from combustion turbine facilities. The audit showed that Bonneville contracted to purchase the output from a combustion turbine facility at excessive cost, and that the electricity was not needed. The cost of the electricity under this contract exceeded the amount of revenue Bonneville could obtain by selling it. Bonneville estimated it would operate the generation facility for only 6 months of the year; the contract, however, required Bonneville to pay the fixed costs of the facility during the other 6 months. Consequently, the cost of the electricity plus the fixed costs in the first year of the contract would exceed revenues by $20.9 million. The contract also contained cost escalators that exceeded the rate of inflation. These cost escalators combined with the excessive initial cost resulted in projected excessive costs of $146.8 million in the first 5 years of the contract, Finally, the contract was not needed due to competition from similar facilities and a desire by customers to diversify their sources of electricity.
- Research Organization:
- USDOE Bonneville Power Administration, Portland, OR (United States)
- Sponsoring Organization:
- USDOE, Washington, DC (United States)
- OSTI ID:
- 110673
- Report Number(s):
- DOE/IG-0379; ON: TI96000178; NC: NONE; TRN: 95:007096
- Resource Relation:
- Other Information: PBD: 8 Sep 1995
- Country of Publication:
- United States
- Language:
- English
Similar Records
California CO2 Storage Assurance Facility Enterprise (C2SAFE): Final Technical Report
Audit of desktop computer acquisitions at the Idaho National Engineering and Environmental Laboratory