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ENCLOSURE V ENCLOSURE V 



ELECTRICITY TRANSMISSION 



BACKGROUND 



The Bonneville Power Administration (BPA) owns and operates 

 some 14,000 miles of high-voltage electricity transmission lines. 

 Two reglons--the Pacific Northwest and Callfornla--are joined by 

 three high-voltage transmission lines (intertie), which allow for 

 an exchange of electricity between the two regions. BPA owns about 

 80 percent of the Northwest segment of the Intertie. The Intertie, 

 completed in 1970, also made Canadian power available through the 

 Northwest into California. The regions benefit from the exchange 

 because of the difference in the costs of generating electricity — 

 the Northwest uses relatively low-cost hydropower, while California 

 relies on higher cost oil- and gas-fired generation. 



GAO WORK 



In 1980, we found that the intertie should be expanded so that 

 California could save roughly 4 million barrels of oil per year, 

 while the Northwest could earn additional revenues from the sale of 

 surplus energy. We recommended that the Secretary of Energy take a 

 more active role in facilitating the proposed expansion. In a 

 November 1983 follow-up review, we again recommended that the 

 Secretary of Energy ensure that BPA continue to facilitate 

 negotiations to expand the intertie. We also recommended that the 

 Secretary direct BPA to resolve several outstanding concerns among 

 BPA and participating utilities. The Department of Energy (DOE) 

 concurred with our recommendations and stated that it would work to 

 resolve outstanding issues. In addition, the 1985 DOE 

 appropriations legislation contained authorization for BPA to 

 upgrade portions of the existing intertie and to expand the 

 intertie. 



In 1988, we assessed, among other things, both the economic 

 justification for a proposed $883 million expansion of the Intertie 

 and the relationship of the expansion to Canadian power imports. 

 We found the economic rationale for the expansion inadequate and 

 determined that Canadian power Imports could increase as a result 

 of the expansion. We recommended that BPA clarify the economic 

 justification for the proposed expansion. BPA later performed the 

 supplemental economic analysis, as recommended. 



17 GAO/R(XD-93-133R, GAO Products on Bonneville Power Administration 



