New legislation co-sponsored by Arizona Sens. Jeff Flake and John McCain would require the controversial Western Area Power Administration to publish its electrical rates and budget information online to ensure transparency.
The agency, known as the WAPA, provides electrical power in 15 states, serving nearly 40 million people. It sells wholesale energy generated by 57 hydroelectric plants and Arizona's coal-fired Navajo Generating Station. The administration maintains 17,000 miles of high-voltage lines and 328 substations.
During the past few years, the WAPA has come under criticism for internal fraud, excessive rates and the accumulation of a huge "unobligated balance." Those issues were highlighted last month in an investigative report by The Arizona Republic.
Flake, chairman of the U.S. Senate Energy and Natural Resources Committee, said the Western Area Power Administration Transparency Act is designed to force openness and accountability for customers and taxpayers. If passed and signed into law, it would force the WAPA to establish an internet site with detailed financial information, including a summary of expenditures and balances.
The WAPA, one of four power administrations within the U.S. Department of Energy, has a $1.1 billion budget.
Flake said the reform legislation is designed to "restore transparency and fiscal responsibility at WAPA and hold those guilty of fraud accountable."
McCain added, "For years, Arizona consumers have been paying the price for rampant waste, fraud and abuse at WAPA in the form of high energy bills ..."
WAPA customers, including Grand Canyon State Electric Cooperative Association and Arizona Municipal Power Users Association, began complaining 18 months ago about the WAPA's overhead, rates, spending and secrecy. Whistleblowers, including the agency's chief of security and the deputy regional director in Arizona, turned to Congress and the media with allegations of mismanagement, waste and internal theft.
Energy Department inspectors verified lax financial controls and millions of dollars in "potentially fraudulent" spending by employees, particularly at the Desert Southwest Region offices in Phoenix.
Utilities, meanwhile, were particularly concerned that the WAPA had accrued an "unobligated balance," or reserve fund, estimated at $767 million. A Government Accountability Officereport last week found that the agency has taken steps to reduce the surplus while maintaining contingency funds which reasonably anticipate environmental conditions or disasters that could hurt the hydroelectric market.
After the report was issued, WAPA Chief Financial Officer Dennis Sullivan said the agency "takes its financial responsibility and accountability to its customers seriously, and this (GAO) acknowledgment validates our plan."
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