Arizona Sens. John McCain and Jeff Flake have sent a letter to the U.S. Department of Energy, questioning higher rates charged to utilities by a federal agency that markets hydroelectric power across the West.
Following concerns raised by utilities including Arizona’s rural electric cooperatives, the senators sent a letter to DOE Deputy Secretary Elizabeth Sherwood-Randall expressing strong concerns that the Western Area Power Administration (WAPA) has improperly expanded its mission and raised rates without delivering more power or explaining the rate increases.
“It is our understanding that WAPA’s customers are being asked to fund WAPA’s efforts to expand its mission despite the amount of power it delivers remaining stagnant,” McCain and Flake wrote. “We further understand that WAPA is asking its customers to increase funding with little or no accountability or assurances that the increased expenses are prudent and that the rates charged for these federal resources are reasonable.”
In an email statement, WAPA said it was aware of the senators’ Oct. 27 letter and will respond after it receives an official copy.
The agency said its main goal is to “support clean, renewable, reliable, cost-based federal hydroelectric power and transmission services by using economically responsible business practices.”
“We continue to support our federal mission by providing power to our preference customers at the lowest cost consistent with sound business principles.”
WAPA is one of four regional power administrations under the U.S. Department of Energy involved in marketing and delivering mostly hydroelectric power.
The Arizona senators said they were prompted to query the agency after receiving a letter from WAPA customers including the Irrigation and Electrical Districts Association of Arizona, the Grand Canyon State Electric Cooperative Association and the Arizona Municipal Power Users Association. The groups raised concerns that WAPA “has sought to expand the scope of its mission, increased its overhead, and unfairly attempted to pass on costs to its customers,” the senators said.
Arizona’s Generation and Transmission Cooperatives, which provides power and transmission to 500,000 electric co-op customers throughout the Southwest, says it was hit with a $1.5 million increase in WAPA rates between the beginning of 2013 and the end of 2014.
The senators’ letter to Sherwood-Randall poses 13 questions including asking for justification for increased electric rates over the past decade and an explanation of whether or not the agency has increased its ability to deliver power to its customers.
The Grand Canyon State Electric Cooperative Association said in a news release that WAPA is mandated by law to deliver power at the lowest possible rate to consumers consistent with sound business principles.
The co-op association says WAPA’s overhead has grown significantly in recent years, with operational costs jumping from $33.2 million in 2009 to $54 million this last fiscal year, a 63 percent increase.
The Grand Canyon State association’s membership includes Trico Electric Co-op, which serves parts of Pima County; and the Sulphur Springs Valley, Navopache, Mohave, Graham County and Duncan co-ops in Arizona, as well as a small co-op in Southern California.