Energy

Gov’t-Run Utility Plagued By ‘Waste, Fraud And Abuse,’ Senators Write

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Michael Bastasch Contributor
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Arizona Republican Sens. John McCain and Jeff Flake are demanding Energy Department investigators brief them on the agency’s investigation into “past reports of, and ongoing allegations of, waste, fraud and abuse” at a government-run utility.

The GOP senators sent a letter to DOE Tuesday asking the inspector general’s office about their review of the use of government purchase cards at the Desert Southwest Region (DSW) of the Western Area Power Administration (WAPA) — a government utility operating across 15 western states.

“In November 2015, an internal WAPA audit into the use of Government Purchase Cards (GPCs) revealed ineffective annual management reviews; inadequate oversight and monitoring at various levels; and ineffective or non-existent internal control activities,” Flake and McCain wrote.

“According to that internal audit, electronics, gift cards, vehicles, and other items were routinely purchased for the personal use of an employee,” they wrote. “It is unclear what, if any, employees and managers were held responsible for these actions.”

McCain and Flake even argue potential fraud within WAPA could be making electricity more expensive for customers, including those in Arizona.

“Customer groups of WAPA have faced year after year increases in their power rates, and while WAPA has cooperated with our offices to this point on cost transparency, more work is needed,” they wrote.

The letter comes after DOE investigators released a report in March, criticizing WAPA for not doing enough to protect its electric grid from physical attacks.

The IG found WAPA “had not always established adequate physical security measures and practices for its critical assets, addressed physical security measures recommended in prior risk assessments, and conducted performance testing to ensure that security measures for physical assets were performing as designed.”

WAPA is one of four DOE-run electricity transmission providers and is responsible for more than 17,000 miles of transmission lines which provide power to 680 utility and power companies that operate 328 substations across the western U.S. — WAPA is one of the top 10 largest electrical transmission operators in the country.

In fact, WAPA has been hit by at least two attacks at the Liberty substation near Phoenix, Arizona. The Wall Street Journal recently reported that Liberty “is a critical link in the southwest power corridor, delivering electricity to heat homes in northwestern states during winter and cool buildings in the southwest during summer.”

In November 2013, attackers slashed fiber-optic serving Liberty and a larger substation near the Hoover Dam. Smith noted it “took workers about two hours to re-establish proper communications and normal controls,” according to WSJ.

Liberty substation was attacked again in 2014, and this time “two men with a satchel cut the gate lock and headed to the control building,” but “left after trying, unsuccessfully, to cut power to a security trailer outfitted with cameras and blinking lights.”

Cloud, who Gabriel mentioned in his email, said “16 of 18 security cameras had failed” at Liberty, according to WSJ. “Most were installed after the first break-in and hadn’t been properly programmed,” Smith reported. “Investigators retrieved a single fuzzy video from a thermal-imaging camera.”

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