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123359 1 (1984-02-07)

handle is hein.gao/gaobactfn0001 and id is 1 raw text is: UNITED SVsp GEIeRAL ACCUNTING OFFICE WSRINGTON, D.C. FOR RIEEASE ON DELIVERY EKPECTE FEBRUARY 7, 1984 STATEMENT OF F. KEVIN BOLAND 123359 SENIOR ASSOCIATE DIRECIOR RESOUCES, COMMUNITY, AND ECONOMIC DEVELOPMENT DIVISION BEFORE THE sUBCOMMITTEE ON ENERGY CONSEVATION AND POMER COMMITTEE ON ENERGY AND CMRCE UNITED STATES HOUSE OF REPRESATIVES Chairman and Members of the Subconmittee: We appreciate this opportunity to discuss the Dopartment of Energy's (D0E) Elec- tricity Policy Project (Project). The Project- report The Future of Electric Power in kAricat Economic Supply for sconomic Growth has received considerable attention most notably because of its conclusion that the industry needs to build substantial amounts of new large generating capacity at a time when existing reserve margins are high and grw in demand for electricity is relatively low. Ebrecasting the need for new electricity resources, especially on a nationwide ba is over two decades, has become an increasingly uncertain process. DOE ran 25 cases of their model to project electric demand through 2000. The model' s estimated most li ely electric demand growth rate was 2.49 percent per year. This result was about mi y between DOE's 25 estimates which ranged from 1.10 percent to 3.82 percent ually.... Based on revised electricity price estimates, which increased the 2.49 per- ce t growth rate to 3 percent, DOE then chose the 3 percent rate as the basis for esti- ma ing needed new capacity resources. Using this higher growth rate led to DOE's fore- t being over 80,000 megawatts higher than originally estimated by their rdel's most li ely case. OE's estimate of available generating capacity by 2000 assumes utility supply p are limited to 1991 even though sane plants are currently scheduled tr commercial ration after 1991. DOE considered but did not include nonconventional supply strate- gi s such as cogeneration and load management in their supply estimate. This has the effect of further increasing their projection of needed new central-station generating ity. National forecasts of electricity supply and demand have scue severe limitations ardless of the specific estimates. Significant regional variations exist not only in ttje current level and composition of electric demand and supply, but also it factors affecting future demand and specific supply alternatives available to reliably and econ- agically meet that demand. By not accounting for such variations or by generalizing c clusiords based on limited regional applicability, DOE's forecast of needed new gener- a ing capacity cannot be readily applied to specific regions. DOE made extensive use of contractors during the Project to increase its analytical pability and obtain views of other groups while meeting their expected one year com- p etion target. Almost $2.7 million of the $3 million spent on the Project by DOE was t support 27 reports through 15 contracts and subcontracts. DOE used a va iety of con- acting arrangements and awarded 5 contracts on a sole source basis. DOE lied exten- s vely on a contracting procedure known as task order contracts, under whic 20 reports re produced. As we have previously reported, DOE' s use of sole source an task order c tracts limits ccmpetition and may not assure that quality products are tained at least cost. DoE used these type of contracts because of the one year get date f r the study. According to DOE program officials, their experience in a ding con- acts under the competitive process has taken about 12 to 18 months. Re red conflict d d not contain the data needed to determine whether the assessment had bee, completed.

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