New York Power Authority

Management and Operations (Follow-Up Review)

The New York Power Authority (NYPA) provides about a quarter of the electricity used in New York State, selling electricity to government entities, the investor-owned- utilities operating in New York State, and other non-residential customers. In our prior audit report 95-S-110, we examined selected aspects of NYPA’s operations and concluded that NYPA’s role should be reassessed in light of the changing nature of the electric utility industry, which was becoming more competitive and less regulated. In particular, we noted that revenues from two hydroelectric plants were subsidizing chronic operating losses from nuclear plants, fossil fuel plants, and transmission facilities. We also noted that the losses incurred by some of the facilities were obscured to some extent by NYPA’s accounting practices. We further noted that NYPA lagged well behind New York’s investor-owned utilities in its efforts to reduce the size of its workforce. In addition, in a program intended to create jobs in New York State by selling low-priced power to certain businesses, we identified significant inconsistencies in the prices charged by NYPA for the power and in the job commitments made by the businesses purchasing the power. In our follow-up review, we found that NYPA officials generally had not implemented the recommendations contained in our prior report. However, NYPA had sold its two nuclear power plants, which were the target of several of our recommendations.

For a complete copy of Report 2001-F-37 click here.
For a copy of the 90-day response click here.