2016 Performance Audit

The Office of the Auditor General has completed a performance audit of the Arizona Power Authority (Authority) pursuant to Laws 2016, Ch. 107, §4. The Authority was created in 1944 to receive and manage Arizona’s share of hydroelectric power generated by the Hoover Dam (Hoover power). Federal law allocates Hoover power to Arizona, Nevada, and specific entities in California. The Authority contracts with a federal agency, the Western Area Power Administration, to receive Arizona’s allocation. In turn, the Authority allocates the State’s Hoover power to eligible Arizona entities and enters into long-term power sales contracts with those entities for a portion of this power. We found that the Authority’s most recent process for allocating Arizona’s Hoover power, which occurred from June 2011 through July 2015 and will take effect in October 2017, allowed for public input and was consistent with federal and state legal requirements. Additionally, the Authority works with its customers, who have some flexibility in using their Hoover power, to manage their allocations of this power. Customers may also participate in power pooling, and the Authority should ensure that any such arrangements taking effect in October 2017 are approved in accordance with its rules. Further, the Authority should implement the new policies and procedures it developed during the audit to improve conflict-of-interest disclosures and procurement practices.

2016 Performance Audit

2016 Auditor General Report Highlights

2016 Performance Audit Response

Rate Projection

Projected Post-2017 Rate Forecast 9.22.17

Repayable Advances

This is a preliminary rate projection for the 10 years starting in 2017.  There are several unknown factors in the calculation such as the energy, capacity and A&G amounts.  The energy estimates are from Western’s 10-Year Plan, the capacity is constant from the current year and the A&G is an estimated amount.  There is a section at the bottom that includes scheduling entity revenue for the purpose of comparing to the current rate.  This spreadsheet will be updated as new information becomes available, and the date and time will be updated on the spreadsheet in order to identify the version.  Repayable advances for each new allottee are listed on the second attachment.  (The rates do not include Repayable Advances)

This is an updated forecast as of 9/22/17