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Power Co., Souice areas added 20. Georgia

SOUTHEASTERN POWER ADMINISTRATION STATEMENT OF HARRY C. GEISINGER, ADMINISTRATOR

Chairman HATFIELD. Mr. Geisinger, I believe that Southeastern is probably the next in line based on age of the PMA's. We invite you to make your statement and will put your full statement in the record. You may proceed.

POWER MARKETING POLICIES Mr. GEISINGER. Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, it is a pleasure to once again appear before this committee to discuss Southeaster's budget request for fiscal year 1987.

Since I last appeared before this committee, Southeastern has made significant progress in implementing the new power marketing policies. Contract negotiations just completed with the South Carolina Public Service Authority, Duke Power Co., South Carolina Electric and Gas Co., and preference agencies in their service areas added 26 new preference customers, thus completing the implementation of the GeorgiaAlabama power marketing policy.

The final power marketing policy for the two-project Kerr-Philpott System has been completed and issued. Negotiations are currently in progress with Appalachian Power Co., Virginia Power, Carolina Power & Light Co., and preference entities within their service areas to carry out the policy. These negotiations are expected to add 48 new preference customers to those we are now serving.

SEPA presently markets power from 22 multipurpose projects to 248 power purchasers, serving approximately 400 preference customers. Estimated power revenues for fiscal year 1987 are $130 million, reflecting the sale of 3,092 megawatts of installed capacity with 7.4 billion kilowatt-hours of energy.

REPAYMENT STATUS AND BUDGET REQUEST SEPA's repayment status is very good. From inception in 1950 to September 30, 1985, operating revenues available for repayment totaled $1.2 billion. These revenues were allocated to the repayment of $482 million to operating expenses, $444 million to interest expense, and $310 million to capital investment in electric projects. By the end of fiscal year 1985, SEPA's total capital investment was $1.3 billion, less the amount repaid, leaving a balance of $992 million to be repaid.

A funding level of $21.7 million is requested in the President's 1987 budget to allow SEPA to carry out its mission. Of this request, $2 million is for the system operations and maintenance activity. The major

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ese revenues wereenues available for fation in 1950 to

portion of the budget request, $19.7 million, is requested for the purchase power and wheeling activity. No increase in the manpower level of 40 full-time equivalents is requested in fiscal year 1987, although sig. nificant increases will occur in the workload.

Mr. Chairman, this concludes my brief statement, and I would be happy to answer any questions from you or the members of the committee.

[The statement follows:)

STATEMENT OF HARRY C. GEISINGER, ADMINISTRATOR, SOUTHEASTERN POWER ADMINISTRATION

Mr. Chairman and Members of the committee:

It is a pleasure to appear before you today to discuss southeastern Power Administration's (SEPA) budget request for fiscal year 1987.

Southeastern Power Administration, with headquarters in Elberton, Georgia, markets hydroelectric power from projects constructed and operated by the 0. s. Army Corps of Engineers located in 10

southeastern has no transmission lines and accomplishes the delivery of power by wheeling agreements with power utilities in the area that have the necessary transmission facilities.

southeastern states.

southeastern presently markets power from 22 multiple-purpose projects to 248 power purchasers. Estimated power revenues for FY 1987 are $130,417,000, reflecting the sale of 3,092 megawatts of installed capacity with 7.4 billion kilowatt-hours of energy.

Southeastern's overall repayment status is as follows: from inception in 1950 to September 30, 1985, operating revenues available for repayment totaled $1,233,859,000. These revenues were allocated to payment of $482,583,000 of annual operating expenses, $444,266,000 of interest expense, and $310,010,000 of capital investment in electric plant. The total capital plant on September 30, 1985, of

$1,302,717,000, less

the amount repaid, leaves a balance of

$992,707,000 to be repaid.

FY 1987 BUDGET

A funding level of $21,736,000 is requested in the President's 1987 Budget to effectively carry out Southeastern's mission. The PY 1987 program level request represents an increase of $7.001,000 over the

amount authorized for the current year.

A comparison by activities of the FY 1987 Operations and Maintenance budget request with the amounts available in FY 1986 is as follows:

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The request of $2,031,000 for the System Operation and Maintenance activity will provide funds for the negotiation and administration of wheeling and power sales contracts; development and review of rates to assure repayment of power costs; scheduling the generation of power

and supervision of power deliveries; and direction and support of

Southeastern's power marketing program.

This amount represents a

$175,000 increase over the amount available in the current year.

The major portion of the request for this activity provides funding for personnel compensation and related costs and reflects the continuation of the current manpower level of 40 full-time equivalents. The request provides for increases resulting primarily from statutory within-grade and performance Management Recognition System increases, terminal leave payments, additional personnel

benefit costs, and higher administrative costs for support functions.

occur.

No increase in the manpower level of 40 full-time equivalents is requested for FY 1987, although significant workload increases will

As a result of changes in the marketing program, Southeastern will serve significantly more customers within enlarged marketing areas under different marketing conditions, affecting workload throughout the agency. Southeastern will strive to accomplish these workload increases within the current manpower level through improved

management of employee resources and additional use of automation

PURCHASE POWER AND WHEELING

The major portion of the budget request, $19,705,000, is required for the Purchase power and Wheeling activity and represents an increase of $6,826,000 over the amount available in the current year.

Funds provided for this activity are used to pay amounts charged the Government under contractual arrangements for (1) delivery of power over non-Federal systems to load centers of preference customers for the account of the Government, (2) purchase by the Government of energy, if necessary, during adverse water periods, and (3) support capacity required to meet commitments for the Jim Woodruff Project

under adverse water conditions.

In the absence of ownership or operation of transmission facilities, Southeastern carries out its marketing program by utilizing the

existing transmission systems of the power utilities within its marketing area. This is accomplished through "wheeling" arrangements between Southeastern and each of the area utilities who have transmission lines connected to the projects, under which the utility agrees to deliver specified amounts of Federal power to customers of the Government and Southeastern agrees to compensate the utility for the transmission service performed.

Southeastern has been deeply involved in the development and implementation of new power marketing policies for its respective systems which will ultimately allow all available Southeastern power, both capacity and energy, to be marketed to preference customers in the future. These new policies have been implemented as new contracts were executed for the respective marketing areas.

Contracts providing for the sale of all power to both existing and new preference customers which are expected to be in effect during FY 1987

cover the following Southeastern sales:

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