GAO Questions Capitol Power Plant Transition
A Government Accountability Office report released Thursday calls into question the ongoing project to transition the Capitol power plant from relying partially on coal to completely on natural gas.
The watchdog agency suggested the Architect of the Capitol did not follow leading capital-planning practices in the project, which result in an inefficient use of taxpayer dollars. AOC Stephen T. Ayers disagreed with the report’s claims, arguing that transitioning the power plant is the most cost-effective and environmentally friendly option. In 2013, the Architect of the Capitol secured approval from the federal and D.C. governments to move forward with “cogeneration” construction, which would allow the plant to simultaneously produce electricity and heat from natural gas. The century-old power plant provides steam and chilled water to heat and cool 23 facilities on Capitol Hill, including the Capitol and House and Senate office buildings. The power plant currently purchases fuel and electricity to run the boilers and chillers.
Under a mandate from the House Legislative Branch Appropriations Subcommittee to review cost-saving opportunities for the power plant, the GAO conducted a nearly two-year review of how the AOC managed energy costs and how it decided to pursue cogeneration for the plant.
The GAO argued the AOC has not fully updated its 2009 long-term energy plan, and partial updates drafted in 2014 “did not include complete information on the need or problem that the [cogeneration] project would address.” Among its recommendations, the GAO suggested the AOC update its long-term plan before committing to a major energy project at the plant, and solicit an independent review of its plan.
“Without updating its long-term energy plan and obtaining independent review, AOC may pursue a project that does not cost-effectively meet its needs,” the report’s authors wrote.
Ayers answered the report’s claims in a 17-page response to the agency. He argued that his office has followed best planning practices, and that there is an “urgent need” to replace two antiquated coal boilers, which he wrote are “on life support.”
Ayers said that from July 2014 to June 2015, there were eight days when the power plant “did not have sufficient capacity to meet the peak winter steam demand.” He wrote that “a major crisis was averted” because the lessened capacity occurred during some of the warmer months.
Another point of contention between the GAO and AOC involved the AOC’s proposal to obtain third-party financing for the project. The office has already obligated roughly $16 million for the project, and a draft 2014 project summary projected the total project cost would be more than $85 million.
Ayers argued the third-party financing is necessary because Congress is not likely to appropriate the necessary funds. In recent years, Congress has reduced legislative branch spending, or maintained funding at flat levels. This has contributed to a more than $1 billion backlog in AOC projects.
But the GAO argued that such financing would involve a utility arranging to cover the upfront costs of the project and the agency repaying the contract using cost savings. The GAO authors wrote that under such an agreement, the AOC could face an additional $28 million in “nominal costs.”
Since the AOC did not agree with the GAO’s recommendations, the issue remains at a stalemate. The report will be sent to relevant congressional committees, including each chamber’s legislative branch appropriations subcommittees, the House Administration Committee, and the Senate Rules and Administration Committee.
A GAO spokesperson said the agency plans to follow up with the committees as well as the AOC “to track the issue and provide additional assistance if it’s needed.”
A spokesperson for the AOC did not immediately respond to a request for comment on the report, and whether the project will continue as planned amid the report.
But it appears the project will move forward, given Ayers’ disagreement with the GAO’s recommendations and his contention that construction must be “substantially underway” before the D.C. construction permit expires in June 2016. For Ayers, this is a critical project.
“[W]e’ll continue over the next 5 or 6 years to make pretty significant investments in the plant,” Ayers told House appropriators in February. “When I and my team reflect what’s the most important building that we need to keep running to ensure we don’t interrupt the functioning of the Congress, it always comes down to the Capitol power plant. If we can’t heat or cool this building, the Congress is not going to be able to effectively do its job.”
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