Office of Inspector General report on audit of the Western Area Power Administration`s contract with Basin Electric Power Cooperative

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At the request of the Western Area Power Administration (Western), an audit of 17 areas was conducted with respect to possible overcharges on a power contract between Western and Basin Electric Power Cooperative (Basin), Contract No. DE-MP65-82WP-19001. The contract for Western`s purchase of electric power from Basin was entered into on April 15, 1982, and was in effect from January 1, 1986, through October 31, 1990. During this 58-month period, Basin billed Western approximately $197.6 million. Overall, it was found that Basin overcharged Western approximately $23.8 million. These overcharges occurred because Basin: (1) did not recognize or amortize as gain ... continued below

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20 p.

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Creator: Unknown. June 25, 1997.

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Description

At the request of the Western Area Power Administration (Western), an audit of 17 areas was conducted with respect to possible overcharges on a power contract between Western and Basin Electric Power Cooperative (Basin), Contract No. DE-MP65-82WP-19001. The contract for Western`s purchase of electric power from Basin was entered into on April 15, 1982, and was in effect from January 1, 1986, through October 31, 1990. During this 58-month period, Basin billed Western approximately $197.6 million. Overall, it was found that Basin overcharged Western approximately $23.8 million. These overcharges occurred because Basin: (1) did not recognize or amortize as gain its overestimate of completion and correction costs for Antelope Valley Station (AVS) Unit 2; (2) did not amortize the gain on the sale/leaseback of AVS Unit 2 as an offset to lease costs; (3) billed Western prematurely for lease and interest costs; (4) overcharged for the cost of coal by including administrative and general expenses and profit, as well as incorrectly calculating discounts, royalty payments, and imputed interest costs; (5) made faulty calculations of amortization rates for deferred costs; (6) used a shorter depreciation period for AVS common facilities than it had used for other power plants; (7) retained tax benefit transfers; and (8) charged Western for interest and depreciation that had been paid by others. In addition to the $23.8 million in overcharges, interest accrued on the overcharges through December 31, 1996 was estimated to be approximately $22.1 million, resulting in a total of $45.9 million due Western.

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20 p.

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OSTI as TI97006973

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  • Other Information: PBD: 25 Jun 1997

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  • Other: TI97006973
  • Report No.: DOE/IG--0409
  • DOI: 10.2172/495759 | External Link
  • Office of Scientific & Technical Information Report Number: 495759
  • Archival Resource Key: ark:/67531/metadc680840

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  • June 25, 1997

Added to The UNT Digital Library

  • July 25, 2015, 2:21 a.m.

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  • June 22, 2016, 2:34 p.m.

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Office of Inspector General report on audit of the Western Area Power Administration`s contract with Basin Electric Power Cooperative, report, June 25, 1997; United States. (digital.library.unt.edu/ark:/67531/metadc680840/: accessed October 21, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.