|Program Title||Bureau of Reclamation - Hydropower|
|Department Name||Department of the Interior|
|Agency/Bureau Name||Bureau of Reclamation|
Capital Assets and Service Acquisition Program
|Assessment Section Scores||
|Program Funding Level
|Year Began||Improvement Plan||Status||Comments|
|Year Began||Improvement Plan||Status||Comments|
Give funding priority to maintenance of aging hydropower facilities, above non-core activities.
|Completed||PRO&M process developed and implemented. 48 of 53 Power Plants have received their first comprehensive facility review under the PRO&M program. The remaining 5 facilities will receive a comprehensive review by 10/1/2006. This is an ongoing process and power facilities will continue to receive some level of review once a year with a comprehensive review every six years. New PART goals to track review and condition assessments in place and being tracked annually.|
Continue to develop methods of capturing the value of ancillary services that provide flexibility and stability to the power grid.
|Completed||The Power Marketing Administrations (PMA's) capture this value in the rates they set. Reclamation plans to work with the PMA's to capture the value that revenue stream where possible.|
Investigate whether it is cost-effective for an aggressive capital improvement plan to increase reliablility of power facilities.
Measure: The availability of hydroelectric generating units to the interconnected Western electrical system during daily peak demand periods.
Explanation:The peak period is defined as Monday thru Friday between 7AM to 7 PM during the months of June through September. The availabililty will be calculated using a 5-year rolling average beginning with years 1998 through 2002.
Measure: Improve the overall condition and long-term reliability of Reclamation powerplants by reducing the total amount of generating capacity that has a major generator/turbine related component rated in poor condition.
Explanation:The major components include the unit penstock, control gate, exciter, generator, turbine runner, breaker, and tranformer.
Measure: Maintain a forced outage rate on hydropower units that is lower than the industry average for similar units.
Explanation:This goal is designed to keep Reclamation better than the industry average. The goal changes based on the latest industry average which is now down to 2.5.
Measure: Percent of annual power facility condition assessments completed.
Measure: Percent of annual, periodic, and comprehensive reviews completed.
Explanation:NOTE: This replaced the previous measure in 2005. The previous measure included only the number of comprehensive reviews. Reclamation performs a series of power facility reviews on a revolving basis. Every year, approximately ten facilities undergo a periodic review, and the remaining facilities undergo an annual review. This ensures all Reclamation facilities undergo a power review every year. This target is measured in percent of the (53?) facilities that require reviews.
Measure: Reclamation base Operation and Maintenance (O&M) costs for power, expressed as $/MW, will not increase annually beyond the 5-year rolling average increase in cost + or -5%.
Explanation:This measure is replacing the previous cost benchmarking measure. The benchmarking measure (Measure 4) was replaced because the source of the benchmarking data (Energy Information Agency) was discontinued in FY2003.
|Section 1 - Program Purpose & Design|
Is the program purpose clear?
Explanation: The purpose of Reclamation's Hydropower Program is to generate and provide low-cost, reliable power and ancillary services for the citizens of the 17 Western States in Reclamation's service area: Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming.
Evidence: The primary authorizing legislation is the Reclamation Act of 1902. Subsequent authorizations (The Town Sites and Power Development Acts of 1906, The Federal Water Power Act of 1920, the Reclamation Project Act of 1939, and individual project authorizations) have continued to authorize power development on Reclamation Projects.
Does the program address a specific and existing problem, interest, or need?
Explanation: The program addresses a major portion of the need for power generation in the Western U.S. The program is an integral part of the interconnected electric system, the grid of power generating and transmission facilities that generate and move power around the country. Reclamation was instrumental in supporting the system during the recent California power crisis.
Evidence: Reclamation provides power for about 2.5 million megawatt-hours of project use and 40 million megawatt-hours to other power customers annually. Reclamation also provides system support services such as load-following, voltage regulation, spinning reserve, standby reserve, and black start capability.
Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?
Explanation: Congress authorized Reclamation to reclaim arid and semi-arid western lands, with hydropower generation as a byproduct of its other facilities. At that time (early 1900s), there was no competition from the private sector in western hydropower production. Although other public and private entities generate hydropower, Reclamation's role is unique in that it was one of the leaders in developing western hydropower capacity, thereby establishing its facilities as central to western hydropower generation. The inclusion of power in project purposes allowed for development of water projects by repaying part of project costs and also by directly supporting irrigation by paying part of the costs allocated to irrigation.
Evidence: Reclamation provides about 10 percent of electrical capacity and 23 percent of hydropower capacity in the western U.S., and plays a crucial role in the stability and flexibility of the West's electrical grid. Power produced at Reclamation's 58 hydropower facilities is also used for pumping water on Reclamation's projects (Reclamation-Wide Power Performance for Fiscal Year 2001; Bureau of Reclamation Power Resources Office, Business Plan, January 2002). Reclamation's powerplants annually generate over 42 billion KWh of hydroelectric energy, enough to meet the annual residential needs of 14 million people (Reclamation's Power Program, agency flier).
Is the program design free of major flaws that would limit the program's effectiveness or efficiency?
Explanation: Reclamation's hydropower program was not designed as an integrated unit, although many of its components are operated in close coordination with each other. While it was not designed in an integrated fashion, it does not have any significant problems that inhibit effective operations and functions.
Evidence: There have been no significant findings or recommendations identified by any groups including the IG or OMB suggesting that the program has problems. Program personnel meet regularly with power customers to assure that potential problem areas are addressed in a timely manner. In addition, the program meets regularly with Federal Power Marketing Agencies (PMAs), other Federal power producers, and other regulatory agencies to assure continued compliance with existing system regulations, requirements, and needs.
Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?
Explanation: The program effectively meets the needs of beneficiaries, which include project users and also power customers that benefit from the surplus power.
Evidence: Reclamation project beneficiaries directly benefit from the power that is generated to meet project needs. Surplus power is marketed by the PMAs. PMA marketing is directed at public non-profit entities (such as public utilities) to ensure widespread beneficial use. PMAs and Reclamation track the amount of power delivered to customers to confirm that delivery obligations are met. Revenues pay for the portion of power repayment allocated to power which helped the initial project by directly paying for a portion of project capital costs. In addition surplus power is sold to benefit water districts, municipalities, and other not-for-profit groups, with a portion of these costs used to repay some irrigation costs that are beyond the irrigators' ability to pay. The power is also used to support the Western electrical system on a daily and emergency basis. Reclamation works closely with the PMAs to coordinate and manage the multipurpose project operations to enable effective marketing, generation, and delivery of electric power.
|Section 1 - Program Purpose & Design||Score||100%|
|Section 2 - Strategic Planning|
Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?
Explanation: The long term goal for the hydropower program is to operate and maintain the multi-purpose hydro system to provide reliable and efficient power to project users and preference customers through the PMAs. The program has recently developed new long term goals that address the ability of the powerplants to meet energy demands during peak demand periods, and to improve the overall condition and long-term viability of power facilities.
Evidence: The two new 10 year goals align with Reclamation's and the Department's strategic goals. The first goal is designed to increase unit availability during summer peak demand times when the interconnected electrical system demands are highest. This also increases the value of the various ancillary generation products and also increases the system's ability to avoid and/or recover from system emergencies. The second goal addresses long term powerplant condition by decreasing the amount of major generating components rated in poor condition. At present there are over 500 components in use that are beyond their expected useful lives with an additional 200 components reaching that point in the next ten years. In recent years the rate of upgraded or replaced components has been only 20-25 per year. An increase in this rate will likely be required to decrease the number of poor components being added to the list. See the revised Power Program Business Plan.
Does the program have ambitious targets and timeframes for its long-term measures?
Explanation: The program goals are ambitious in that they seek to increase the unit availability to very high levels when compared to typical industry availability. In addition, the long term goal is to decrease the number of power generating components rated in poor condition, even as more of these components meet their design life. This will require making the large capital expenditures in support of an aggressive maintenance and replacement plan.
Evidence: The program goal to increase peak demand period availability increases availability during peak periods from the present 92 percent to 94 percent. This is very significant since average unit availability in the hydroelectric industry is around 88 percent. There is significant risk that this goal could be missed if a couple of large units were taken out of service for any reason. As an example, a worker leaving a wrench inside a unit after a repair caused damage resulting in the loss of 600 megawatts of capacity for over one year. The other goal of decreasing the amount of generating components that are in poor condition is also ambitious because funding depends on convincing customers that these expenditures are necessary.
Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?
Explanation: The program is changing its long-term goals to better document improvements in program performance. Existing annual goals and procedures can show progress toward reaching the new long-term goals. These existing annual goals will be supplemented with new annual goals.
Evidence: The present forced outage goal fits very well into achieving the new long-term goals of increasing peak demand period availability and also is a good indicator of facility condition. The present cost per megawatt goal also fits into the goal of improving facility conditions while keeping costs competitive, and will put a premium on prioritization of program expenditures. New annual goals are also being added to measure annual progress toward meeting the long-term goals of increasing unit availability during peak demand periods and also measuring improvement in facility condition.
Does the program have baselines and ambitious targets and timeframes for its annual measures?
Explanation: The previous goals, although ambitious in their own right did not demonstrate that the program was making long-term improvements. The new annual goals will demonstrate program improvement. Baselines have been established for unit availability, facility condition, and annual costs.
Evidence: The goals are found in the Power Resources Program Business Plan for 2003. Each of these goals includes some key initiatives on which progress is tracked annually. They are also reflected in Reclamation's Strategic Plan and GPRA Plan. Some of the GPRA goals are to maximize power generation and efficiency by maintaining power production costs at a level comparable to the most efficient and lowest cost sector of the hydropower industry and forced outage below the industry average. In anticipation of an open market in ancillary services Reclamation has formed a hydropower optimization team that is starting to look at the hydropower optimization issue.
Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?
Explanation: The Regional Power offices all participate in extensive planning meetings with the Power Marketing Agencies (PMAs) and power customers. The two PMAs in the Western U.S., Bonneville and Western, set production and maintenance goals for the year in concert with Reclamation and have ongoing meetings and discussions to set goals all the way down to as little as an hourly time goal.
Evidence: Bonneville and Reclamation agree on performance goals and incentives for Reclamation power production and outages and a capital expenditure plan. These are tracked closely and reported monthly. During the recent California power crisis Glen Canyon and Hoover powerplants were called upon to produce emergency peak hourly power to meet system emergencies that were above the planned generation schedules.
Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?
Explanation: Reclamation works with the outside consultant firm of Hadden-Jackson which is known as the main player in doing hydropower assessments. This firm has an extensive database of costs and facilities of private and public hydropower plants, and conducts annual in-depth surveys and evaluations on members to determine best practices for various aspects of hydropower operations and conducts annual workshops with participants to identify weaknesses and offer suggestions for improvements.
Evidence: Reclamation has worked with Haddon-Jackson, an independent consultant generally regarded as the leader in benchmarking hydroelectric plants in North America, since 1996 and has evaluated operations at Reclamation facilities which represent almost 90 percent of Reclamation's capacity. Last year Reclamation's Parker and Davis powerplants were evaluated as the best performers in terms of performing operations and maintenance at the lowest costs of all plants in the Haddon-Jackson study. Power reviews of operations and maintenance at individual plants are conducted regularly by teams from outside the plant.
Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?
Explanation: The expenditures are fully tracked by the power customers and they participate in decision making for these expenditures. By looking at long term trends it is possible to show that when facilities are neglected for lack of funding the reliability of the units is noticeably reduced.
Evidence: Budgets are reviewed and negotiated with PMAs and power customers to determine spending priorities. The forced outage rate for Reclamation's generating facilities was at much higher levels in the early 90s when funding for maintenance was not sufficient. The PMAs also negotiate on capital expenditures at individual plants and develop capital expenditure plans, which the PMAs then track.
Has the program taken meaningful steps to correct its strategic planning deficiencies?
Explanation: The program has changed its long-term goals to more effectively demonstrate that the program is continuing to improve. The program undertook an extensive reinvention effort in past years and worked with Reclamation stakeholders to identify how the Program could improve itself and identified areas of improvement and also identified what later became strategic goals. Also, the Reclamation Power Resources Office annually updates and publishes its strategic business plan where upcoming issues and solutions are identified.
Evidence: The Power Business Plan is updated annually in consultation with the Regional offices and other stakeholders. The new long term performance measures which will increase powerplant performance are being added. The Power Management Laboratory received the Golden Hammer Award for its work on the National Performance Review Power Management Laboratory. Reclamation meets monthly and annually with power customers to discuss upcoming problems such as major replacements and operating plans.
Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals and used the results to guide the resulting activity?
Explanation: The program has a process that analyzes the costs and benefits of maintenance and repairs versus the risk of failure and the impact to operational costs. Major replacements and maintenance are scheduled with customer coordination to keep the price of energy stable. Although the program has not undergone an overall cost-benefit analysis, such an undertaking would not contribute much if anything to program operations, since the focus of operations is at the level of individual facilities, not the overall program.
Evidence: The program produces annual reviews that detail each facility's performance and costs. The program also has the power industry's foremost specialist, Haddon-Jackson, conduct annual audits on powerplant performance, which measure and quantify how Reclamation plants compare to other plants within the industry and identify possible program shortcomings. Reclamation also works closely with the power marketing agencies to meet scheduled power delivery requirements and works closely with power customers to evaluate plans for operations and maintenance improvements. Reclamation is involved with Hydro Quebec and the U.S. Army, Corps of Engineers on developing a comprehensive risk analysis methodology to prioritize capital expenditures. This work forms the basis of Reclamation's new long-term goals.
|Section 2 - Strategic Planning||Score||100%|
|Section 3 - Program Management|
Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?
Explanation: The program closey tracks performance information, which is closely scrutinized by program partners, and used to both plan future work and to assess past performance. Data is collected on power generation, outages, and individual maintenance for all its generation units. The program collects all production cost data and collates that data into an annual performance report.
Evidence: Reclamation publishes its annual "Databook" with individual and Reclamation-wide powerplant costs and reliability with industry wide comparisons. Reclamation has recently established new baselines for its two new long-term performance measures based on five years of data for peak availability. The baseline data has recently been established for measuring progress on the new long term goals.
Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?
Explanation: The program and its managers continue to be under close scrutiny from power customers who monitor and participate in major operating and spending decisions. In addition, program managers now have the program goals written into their performance standards.
Evidence: Program goals are written into each Regional Director's and project manager's performance standards. Power customers continuously monitor project performance through meetings and monthly and annual performance reports. Capital and operating and maintenance expenses are also negotiated as to timing and need. Bonneville Power Administration has set performance goals for Reclamation powerplants which have a direct linkage to employee results. There is a cash incentive program whereby PMAs may make an additional cash payment to Reclamation for meeting certain targets.
Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?
Explanation: Most of Reclamation's funds are obligated and spent on schedule and very little funding carries over from one year to the next.
Evidence: Obligation rates for Reclamation have consistently been in the 95-97% range, and this is also true for the Hydropower Program.
Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?
Explanation: An annual report is produced showing performance for each powerplant for which Reclamation has operation and maintenance responsibilities.
Evidence: The annual "Databook" report is produced showing performance for each powerplant for which Reclamation have operation and maintenance responsibilities. The performance of each powerplant is compared internally and externally with plants of similar size. Of the 25 hydroelectric powerplants over 500 megawatts in capacity, Reclamation plants ranked 1,2, 3, and 10 in lowest cost/megawatt of capacity in FY 2002.
Does the program collaborate and coordinate effectively with related programs?
Explanation: The program works very closely with its power customers and especially the power marketing agencies to ensure that costs and expenditures remain as low as possible and that powerplant performance meet contracts and power system requirements.
Evidence: The program has many different Reclamation groups that meet regularly with the power marketing agencies and power customers. Some of these groups, especially those related to meeting power delivery schedules are in daily and even hourly contact to meet changing power system conditions. The program also meets with and participates within diverse industry groups such as the North American Energy Reliability Council (NERC), to establish and monitor standards that assure system reliability. In addition Reclamation meets regularly with the Corps of Engineers and Hydro Quebec, an industry partner and worldwide leader in the hydropower industry.
Does the program use strong financial management practices?
Explanation: All power costs are tracked in the Federal Financial system and reported annually. These costs are entered in accordance with the Federal Energy Regulatory Commission's (FERC) accounts.
Evidence: Outside consultants evaluate and compare Reclamation operations procedures and costs with other private and public power producers. In addition, the costs of the program are reviewed during the rate setting process, which is in turn reviewed by FERC. Power customers and the PMAs continuously participate with Reclamation in the decisions related to major expenditures for operations and maintenance and capital expenditures. Reclamation has also established a working group with the Corps, Hydro Quebec, and the PMAs to coordinate facility condition assessments.
Has the program taken meaningful steps to address its management deficiencies?
Explanation: Reclamation has developed a comprehensive review program (the Power Review of Operation and Maintenance (PROM) program), which does annual and in-depth plant reviews on a regular basis. These in-depth and annual reviews reset the way operations are done and identifies maintenance priorities.
Evidence: A detailed assessment tool has been implemented which categorizes deficiencies in terms of priority of urgency and has a tracking mechanism to ensure that recommendations are implemented.
Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?
Explanation: As a provider of deliverables, Reclamation regularly meets with customers to define the amounts and timing of power production including other electrical products that support the interconnected electric grid. As a purchaser of equipment Reclamation has very tightly defined standards for performance. Reclamation has projections of long-term costs including replacement of aging equipment. These replacements are scheduled with customer coordination to keep the price of energy stable.
Evidence: As an example of Reclamation as a power provider, the Mid-Pacific Region is part of a standing technical group with Western and power customers that meets monthly to discuss maintenance schedules and has oversight responsibilities to access the "Rapid Return to Service" fund for addressing unanticipated problems. For equipment purchases Reclamation has guarantees of performance and testing to verify that contract specifications are met. Reclamation publishes its annual "Databook" with individual and Reclamation-wide powerplant costs. These costs are compared with industry-wide production costs to determine where Reclamation costs are compared to similar sized plants. In addition, Reclamation works with Hadden-Jackson to confirm that its costs are within industry norms and to point out where Reclamation could make improvements.
|Section 3 - Program Management||Score||100%|
|Section 4 - Program Results/Accountability|
Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?
Explanation: The long-term goals were changed this year to reflect the changes required to achieve a 'yes' on question 2.1. Therefore there is no identifiable progress on the goal. Some of the existing annual measures can be used to indicate progress toward achieving the goal concerning long-term facility condition, but these measures have not yet been reformulated to track progress on the specific aspects of facility conditions that the new long-term measure considers, namely reducing the amount of generating components rated 'poor'. However, the new measures are a strong step in the right direction, and hopefully annual measures will show progress toward this goal in the near future.
Evidence: The program has various betterment programs underway at several powerplants and can be expected to improve future performance and condition assessment ratings. Assessment ratings of Reclamation facilities are a regular part of the existing maintenance program. However, the new long-term measures will focus on an aspect of long-term maintenance that was not previously targeted, namely reducing the amount of generating components rated 'poor'. Bonneville and Reclamation have a working team which plans and implements activities to better optimize power production at Reclamation facilities.
Does the program (including program partners) achieve its annual performance goals?
Explanation: The program has met its existing annual goals and will be adding new annual performance goals. The previous goals of keeping the forced outage better than the industry average will be kept. The goal of keeping the cost per megawatt in the lowest quartile will be modified to fit with the new goal of keeping costs competitive.
Evidence: The program has consistently met or exceeded its annual goals of being a low cost provider of power and also keeping forced outages below the industry average, see annual GPRA reports. New annual goals are being added this year to complement the new long-term goals of increasing daily peak power availability and improving the overall condition of Reclamation power facilities.
Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?
Explanation: The program has consistently been within budget and has been very good at meeting contract goals and responding to support the interconnected system during system emergencies, and also helping the system to quickly recover from failure.
Evidence: Reclamation has consistently met its performance goals, see annual GPRA reports. Reclamation has consistently exceeded these goals since they were first instituted. The program has experienced a significant trend in reducing forced outages. In addition, there has been a significant increase in management attention to costs now that the costs are monitored and published.
Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?
Explanation: Reclamation hydroelectric power costs are consistently among the lowest in the U.S. Reclamation compares favorably with other Federal programs, such as the hydropower program of the U.S. Army, Corps of Engineers. It is not clear how Reclamation's hydropower program fares in a comparison of long-term goals, although the establishment of new long-term goals is a strong step in the right direction. The hydropower programs of both Reclamation and the Corps both face the challenge of how to set long-term goals for programs that are mature and have met the long-term goals as the programs were originally envisioned.
Evidence: Reclamation has consistently had a forced outage rate lower than the industry average of 2.5 percent. Costs/megawatt of capacity has been in the lowest cost quartile since the measure was instituted in 1998.
Do independent and quality evaluations of this program indicate that the program is effective and achieving results?
Explanation: The PMAs, independent contractors, and customers report on Reclamation performance and compare it with other public and private power producers. Reclamation facilities generally fare well in these comparisons.
Evidence: Contractor reports from Hadden-Jackson have outlined where plants ranks in terms of performance and made recommendations for adopting best practices.
Were program goals achieved within budgeted costs and established schedules?
Explanation: The program is generally successful at achieving its program goals within budgeted costs and established schedules. One reason for this is the intense scrutiny Reclamation Operations and Maintenance activities receive from outside entities. Regional offices work with the PMAs and other power customers to establish projected outlays for operations, maintenance, and capital expenses. The costs associated with these outlays are closely tracked on an annual and long-term basis. The general goal is to meet established production goals and keeps costs within budget.
Evidence: Reclamation has consistently met its target goals since they were instituted in 1998. Reclamation annually reports on cost and outage performance of each powerplant and benchmarks it against plants of similar size. In addition, regular customer meetings establish goals for performance. As an example, the Pacific Northwest Region works closely with the Bonneville Power Administration to establish annual goals and incentives for performance which includes power production and costs. These goals are tracked closely and a report is published monthly.
|Section 4 - Program Results/Accountability||Score||84%|