Comments on Proposed National Power Grid System

Published by the Government Accountability Office on 1971-12-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                                                   ~~~~~~~~~~~~~~52'   -~
                                   COMPTROLLER GENERAL OF THE UNITED STATES
                                                      WASHINGTON, D.C. 2f54B                               I

              B-158701                                                         DE       14 t971

              D:ear Mr.   airn:           ,'

                   I r letter of July 2{6             19T1, you requested our cc.ents an S. 2 3 24,
              9-d Congress.

                     The subject bin proposes to establish a netiomi power grid system.,
                    the purpose of assuring an adequate and reliable lim-eost electric
              power supply consistent %┬▒th the enhamement of environmental values and
               e     reservation of aopetition in the electric power industry.
                   Beceuse of the pvesed substantial expend       itmes, for research and
             deloent      provided for under section 10k,   the Senate    Commerce     ilttee-
             ;:hy wt to onsider providing for the evnerabip and utilizatis of ax
.        -   patents sdtemn frfitee       ffaetions       S<. lX 46  92d Congrss file:
     -       olB1s107).

                  section 105(a)(1) pdes     thlt, effcde 180 a      er eaen
             of the lRatl*l Pwer Crld Act, all electric pier generating and trans-
             mission fW3litles of thc B3ureau c    alann , Arz too    of
             8outhvesen, S:anthaternp ftxvlle m-ad AsitPwr                                      An ila   tion
             Vll te trwithout to the Nation  Grii5

                    The pooed. laoSg                  doe     t speif          whte            tiproes poects-- -
             these whihch,, in addition to Vrovcu    eleti pers provde water for
              nmicipal and idsrial      use., reetioan d fish an lldlifeuro      es*,
             irrigption,, taigio      and fod control--Aw11 be toally transferred to
             the fttional.Grid or rewan, in part, the tdinis7                               aive repmbllity:
             of t     existof     angag
                                    e          3ncles. W sgest, therefrtees at the prelpoed leg
             islxti= lbe revied to claif   thlis issue an topmrbe    thae necessary
             mechaiwb whc       the propfted transers are to be aave"      Relted
             ra     s would be requ'red in secton 105(a)(2). Als, ve e         tat
             th e~mittee my wih to consider providing focr maimUilization of
             tho existin manoe of the agencie who4 genertigan                                     trasmison
             f    ities aeto betrasfre    to th WM

     -             8~~~ection 10B5(ft(3)(B) prvdes- or t~he allction of TVATB. outstadn
-        :   bon~ds btenTVA and th fttoaGrd,             but is silent vith res t to the
              alloction of t~he Goennt's inetmentne   In TVA. 'W sugest thtti
-:           ~secti be   reised to prvide for such allocatio.
                   Under section 203(m)(2) aoffrs and evloyees of the corpmrtions
               mybe pad vitht rer        to tepoisios    of chaper 51 and amb:-
               ebp~ III of chpe 53 '* title 5, Md,- Stts Coe relating ts


                                                  :          70    /       8`76'    .   .
                                     .              .~~~~~~~~2

classification and Ceneral Sohedule pay rates. We are not aware of any
employent condrtion which w~ould justifypyrates focr such officers
           ta taeabaisdia        erent    tlt
                                          hl       the Geeril chedule.
Afco lse. elity beeourthat the coittee onrvesh to5onsider revi2S9,
sect1on 2038to make the    Aovrsionl 13 ti9le 5 a bial te to he oe,    ers
  we         t            tt1eesta
                            th e corptationsl
      beytPlio L   03(a)(9    ) alonprvies thedity                bonding ofit    officers
and e       tlioye of )           eacht corporation                of the iosrd of eoy
ct ofoaionTisOftiace 8ns conststently supported proposed legislctron
to ovider but thsine 8deral             Invorderthat the vmrions riasts of its
    erisity           tosses.
                           (See vir re    abrts to     rhe orts io59riy        March 29, .
196;2.an 3-820 B-59149., AP21 13, 19T0* ) A bill to so provide.,
Hden 8084a      ws
                 otherstodeit        theis, conss on                5, l be. Additonto      ,
ve understga that, effectiveyt                  1,o 19ac
                                                      n tihe
                                                           g    ostal Berrcdp    estabadshed
bs }ublic I~vw 91-3T5, dlseotlme the fidellt~bodlw of its officers

         Section 206          w
                              that each crporation deteroine its o aSys-
tai     iinlnisteir
        of             actiunts and the fora and contents on its contrac
 and otierofsinesr dogunt. Ih order tdit theaprias critions            to
  oemprise the .cftoru
                     ersidall 'rbe able to report ucoifemy to tae Preti-
prnt aid b othes on Its ati vtres, cthtiders      n   Smreldil gven to
requr the that tat ifter st em of accounting oadiecordteoprivate depe-
by the tormat- ns

       thon ag2h6 ouloteborizete corporatiuy p to iasue bonds to h           rsist
thnfinfnds       tth   itioes rhe guregabe debtandling onds coutd not
excep e $15 billion atie btime. o hOffcerfavredee                       fi-
ntming of Govma ent togconsthrough direet appropriations betiae of
the pertodii    of te   ora scrtinaor ay aatierativ congressionalicnrn
prth   ed by the appropriation poces thot is not o r     ly     tvrilable-to
lth Cbctss.und(er (2c)     dor" financing techniques. Alio, we hae observed
ovr the years that interst rates on money         ed f    the rivate ec-
taxr throg agencies othr ha the Treasurwy Deparmnt ar      enerally higber
than *afud obtaie      bog regular public debt obligatio with em-~'
prble maurities Issued- by the Treasury Dearmt.      Ybr thesereasons,
te eomttee may ish to ecnsider autluizig aprorationss to fnane
th acivties of the ctpsmtos       or as an alternt~ve, borwin rra
the Treayrthe      than the Issuance of bonds to te 'pblic by the

 byth            ?i.Q -    tes.Sic       rea    =-.Saioma:;dbeGotb...        2-


by Federal 1cr, it is unlikely tbat they vosld be ievied as fizancielly
independent zirtites; vhile not official a guarantor of the subject
bonds, the United States might wel be loK1ed upon as the prime supporter
of the regional corporatiobs' general tizantial stability. Conseqently,
we beLieve that son limitation uboald be plaed wpon the outstanding
amownt of all bonds issued by regional corporations1 , regardless of vhether
they are formally guarateed by the Goyerment.

     Seation 204(d) adds "&y corporation established under the National
Power 04d At" to the list of agencies'covered by the GoireMa     Corpora-
tion Control At and by so doing makes the corporations established pur-
suat to tbo bill subject to aSl of the provisios of- that act including
the reqairemert for anmal audit by the General Acounting Office.

     Secti8n 206 which provides for the issuw** of boids to the public
by each *wpmration satbmrizes audits by certified public accounting firms
in addition to anmal audits by the General Accouting Office as required
by the            Corportion control Act.

     We believe that the reqwirement for =mil audits and reports to
Congess by the General Aceounting Office vill be uceeessary, and that
the bill should authorize the General Aceounting Office to review the
operations of the corporation at the discretion of the Ccuptroller General
to provide us flexibility in th* use of ow available manpower.

                -          tbt the               statemttict on lines 5,
6; an7T of Me21 of 'te -bin be deletedBd    tbat a   vlsilou Llong the..,
  fo ovn lines be iserted in the bill, perhas at the end of subsea-
tion (e) -of aetion 206 (page 21 of the

           "Nowitstadin        reqrownts fr       1   le audIts
    and arnnul repm-ts to the Congrese thereon contained In
    sections 105 and 106 of the enormeat Corportion Con-
    trol Act, the opeatioos of any corporation established
    under the Vatism' Poer -Grid Act Wall be subject to
     auit by te Seneral.Aaeauit*g. Office -at such times,
    and to sz* extentas the Coptroller Geeal my

                                                           *           q   ;   :529


     As a teebnhim uatter, the vord "rote" shud be inserted before
te vord                e 13, Lie
                      MprV          8.
                                  Sincerely yewah

                                (SIGNED) ELMER B. STAATS
                                    CHptroler Oenerol
                                    of tbe United States

The UOwreble Wr~en 0. Iogmsao
Chair-i Comtttee an CH=eme
United States Seate

                                                                 In4                  C