Letter asks for explanation of why Western Area Power Administration is raising rates, calls for oversight, accountability
(Tempe, AZ) — Arizona Senators John McCain and Jeff Flake are expressing strong concerns that a federal agency involved in marketing and delivering hydroelectric power throughout much of the western United States is expanding its mission and raising rates, even as it fails to deliver more power or explain why higher rates are necessary.
Both senators today signed a letter to the US Department of Energy (DOE) about what they see as the need for transparency and accountability on the part of the Western Area Power Administration (Western). The letter includes 13 specific questions directed to DOE Deputy-Director Elizabeth Sherwood-Randall that ask for everything from a justification for increased electric rates over the past decade, to an explanation of whether or not the agency has increased its ability to deliver power to its customers, and if not, why not. (Read the letter here)
Western is what’s known as a “power marketing administration,” or PMA, tasked with marketing and delivering hydroelectric power from dam projects in the Western U.S. The agency is mandated by law to deliver power at the lowest possible rate to consumers “consistent with sound business principles.”
Western’s overhead has grown significantly in recent years. The agency’s operational costs have jumped from $33.2 million in 2009 to $54 million this last fiscal year, a 63 percent increase. These increases have had a significant impact on rural electricity customers throughout Arizona.
Arizona’s Generation and Transmission Cooperatives, (www.azgt.coop), which provide power and transmission to 500,000 customers throughout the Southwest, were hit with a $1.5 million increase between the beginning of 2013 and the end of 2014.
“Senators Flake and McCain are stepping up as champions in an effort to keep energy costs low for rural Arizonans,” said Patrick Ledger, AzGT CEO.
“Arizona’s not-for-profit electric cooperatives have gone through painful operational cuts in an effort to keep rates low for our customers. Unfortunately, Western has not taken these same actions, as they have greatly expanded their operational costs without providing any additional electricity to existing customers,” said Ledger.
The letter further asks DOE to specifically examine Western’s budget, resulting rate increases and the level of oversight customers have over this process.
Tyler Carlson, CEO of Mohave Electric Cooperative, said, “The hydroelectric power and Western’s transmission network that supports it is critically important to rural Arizonans. The steps being taken by Senator McCain and Flake are pivotal in ensuring that this resource remains affordable into the future.”
Mohave Electric Cooperative serves 32,830 electric co-op members in the northwestern portion of Arizona to include Bullhead City and Mohave Valley.