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                                                       Calendar No. 534
                                                       
115th Congress    }                                        {   Report
                                  SENATE
 2d Session       }                                        {  115-309

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



 
           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.