Summary

GAO made a review to amplify and synthesize its work dealing with many facets of the electric power industry and to identify areas which may deserve further Federal consideration.

Some of the problems confronting the electric power industry include maintaining a strong financial position, forecasting power needs, and deciding how best to balance supply and demand under a realm of regulatory requirements at both the Federal and State levels. Solutions such as diversifying into non-electric related businesses, deregulating the utilities' generation facilities, and implementing new measures to improve their financial status have been proposed. However, Congress and the Federal agencies having regulatory and oversight responsibilities should place into perspective the industry's diversity and complexity when considering solutions to the problems. Rapidly increasing oil and gas prices, substantially lower growth rates, and difficulties in siting and financing large generating plants have made it much more difficult for utilities to provide adequate supplies of power at prices the public is willing to pay. The utilities can play a significant role in increasing our energy independence, promoting more efficient use of electricity, and commercializing new energy technologies. New laws have been added to existing regulatory statutes. It can be expected that the costs and benefits of regulatory requirements will be examined in the future. Federal oversight of electric utilities is appropriate to insure that industry plans and Government regulations are consistent with national priorities.