Detailed Information on the
Southwestern Power Administration Assessment

Pursue funding alternatives/proposals, such as net zero/receipt financing, to reduce Southwestern's appropriation requirements while creating a stable budgetary resource to provide for annual operating costs.

Implement a Special Receipt and Disbursement Account to minimize rate impacts on customers and the use of the Continuing Fund.

The Budget proposes to continue current operations and provide modest increases for maintenance and high cost electrical equipment identified in its replacement schedule.

Southwestern will develop recommendations to improve its power marketing functions and meet all its financial obligations.

Southwestern will develop long-term goals, targets, and measures.

The Administration will develop and collect data on efficiency measures comparable to those used by private industry.

Southwestern will develop a plan to repay any purchase power and wheeling expenditures made through the Continuing Fund within one year.

Southwestern will adopt consistent performance measures for use and reporting by the Power Marketing Administrations to ensure opportunities to benchmark and identify best practices for program operations.

Measure: System Reliability Performance

Explanation:Meet North American Electric Reliability Corporation (NERC) Control Performance Standards (CPS) of CPS1>100 and CPS2>90 and meet or exceed industry averages. CPS1 measures a generating system's performance at matching supply to changing demand requirements and supporting desired system frequency in one minute increments. CPS2 measures a generating system's performance at limiting the magnitude of generation and demand imbalances in ten minute increments.

Measure: Repayment of Investment Performance

Explanation:Repayment of Investment Performance. Ensure timely repayment of Federal Investment in accordance with DOE Order RA 6120.2 by maintaining unpaid investment (UI) equal to or less than the allowable unpaid investment (AUI).

Measure: Efficiency Performance

Explanation:Provide power at the lowest possible cost by keeping total operation and maintenance expense per kilowatt-hour generated below the national median for public power.

Measure: Reliability Performance

Explanation:Effectively operate the transmission system to limit the number of accountable outages to no more than three (3) annually.

Measure: Provide power at the lowest possible cost (old measure)

Explanation:Southwestern's average Operations and Maintenance (O&M) cost component of its rates do not exceed the National average for hydropower systems. Starting in 2009, data will not be reported for this measure.

Measure: Maintain power system reliability (old measure)

Explanation:Operate the transmission system so the rolling 10-year average for preventable outages is 2 or less. The FY 2004 target/actual is based on an 10-year average. Starting in 2009, data will not be reported for this measure.

Measure: Achieve and maintain financial integrity (old measure)

Explanation:Meet all required Treasury payments fully and timely. Starting in 2009, data will not be reported for this measure.

Is the program purpose clear?

Explanation: The Southwestern Power Administration's (Southwestern) mission is to cover all costs of producing, transmitting, marketing and reliably delivering cost-based Federal hydroelectric power, giving preference to public entities, encouraging its most widespread use and repaying the Federal investment (principal plus interest) consistent with sound business practices. Southwestern meets most of its mission requirements. This is accomplished by striving to maximize the use of assets while recommending to the U.S. Corps of Engineers (Corps) how to balance power needs with the diverse interests of other interstate water resource users, and implementing public policy.

Evidence: "Authorizing legislation; Section 5, Flood Control Act of December 22, 1944; 58 Stat. 887, 890; 16 U.S.C.A. 825; Other legislation; Continuing Fund established under Title I, 58 Stat. 890, H.R.3896, P. L. 350 (Amended in 1989); Department of Energy Organization Act of 1977; P.L. 95-91, Section 302; Southwestern's Mission Statement; Southwestern's Strategic Plan; Southwestern's Annual Budgets; Congressionally Authorized Project Purposes; National Environmental Policy Act (NEPA); and Southwestern's Marketing Plan."

Does the program address a specific interest, problem or need?

Explanation: Southwestern is responsible for marketing power from 24 Federal dams built for multiple purposes including hydroelectric generation, navigation, flood control, fish and wildlife, recreation, and water supply. Southwestern also recovers most of the cost of the Federal investment associated with the hydropower purpose. Power is marketed at cost based wholesale rates to municipal utilities and rural electric cooperatives in a six state area. Factors considered prior to Congress authorizing project construction includes the estimated economic benefit hydropower would bring to the region.

Evidence: To accomplish the widespread use principle in Section 5 of the Flood Control Act of 1944, Southwestern markets power at wholesale rates to 78 municipal utilities, 22 rural electric cooperatives and three government installations located in six states; AR, KS, LA, MO, OK, and TX; and transmits power through 1,380 miles of transmission line. Southwestern reviews annually and, as necessary, develops and assesses rates for power and other services which repay all annual operating costs and much of the Federal investment. Rate reviews by Department of Energy and Federal Energy Regulatory Commission are intended to ensure that Southwestern meets its acknowledged requirements. Each year, Southwestern publishes an annual report, which documents customers served, power and energy sold, and the Federal investment repaid. The Federal hydroelectric generation marketed by Southwestern produces an average annual benefit to the region in excess of $400 million, based on the average annual energy of the System and FERC's replacement value.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: Southwestern's marketing plan is designed to provide all available power to customers and spread the benefits of Federal power as widely as possible within a six state region. As a matter of DOE policy, consistent with FERC requirements, Southwestern offers excess capacity in its transmission system to other users in a non-discriminatory manner, and supports regional transmission service reliability. More recently, Southwestern has participated in the development of FERC initiated Regional Open Access Transmission Services with the use of its Federal transmission system. Southwestern's marketing plan recognizes the relatively small amount of water storage of its hydroelectric system in a manner which maximizes and assures the reliable repayment of the Federal investment and provides significant economic benefits to the region while accommodating the diverse interests of other interstate water users.

Evidence: Southwestern repays annual operating costs and much of the Federal investment associated with the hydropower purpose. This is evidenced in Southwestern's annual report, financial statements, and annual repayment studies. Southwestern's customers consider this power critical to their communities' economic health. Southwestern routinely meets with those having an interest in other project purposes to determine the impact of power operations on those purposes and vice versa. Southwestern is a member of the White River Dissolved Oxygen Committee; is a signatory to the Corps Management Plan, dealing with Least Tern (an endangered bird) issues; and has an Memorandum of Understanding with the Corps, which recognizes the multi-purpose nature of the projects and Southwestern's resulting responsibilities. Southwestern is currently a member of the regional reliability council and is participating in an Open Access Transmission Tariff. Other evidence includes Congressionally authorized project purposes as stated in project authorizing legislation; and Southwestern's Marketing Plan.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: The generation and transmission of power is a well developed technology, largely provided by municipal and independently-owned utilities across the country. This function could be performed under contract or through non-federal ownership of transmision lines and generation capacity on the dams. Southwestern is the only entity marketing and delivering Federal hydropower in the six state area of Oklahoma, Arkansas, Missouri, Kansas, Texas and Louisiana. Southwestern's transmission system is an integral part of the interconnected transmission network that is vital to the delivery of power in this region.

Evidence: "DOEOA (1977); Section 5 Flood Control Act of 1944; FERC Orders 888 & 889; National Energy Policy Act (1992); Current membership in a regional reliability council; Participating in the development of a regional transmission organization; Southwestern Open Access; and Transmission Tariff. Hundreds of utilities across the country provide power to consumers and do identical work."

Is the program optimally designed to address the interest, problem or need?

Explanation: Southwestern benefits from subsidized loans that place part of the cost of hydrosystem construction on the Treasury. In addition, the application of preference in the sale of power creates administrative inefficiencies and restricts market activity. Market pricing of power and unrestricted sales would improve opportunities for more efficient operations. Southwestern also conducts a purchase power and wheeling program ( buying power and transmitting it over leased lines) that, to some degree, duplicates available private sector services. Southwestern believes this program enhances the value of its power, though it does not capture that value in its customer rates. Southwestern's marketing plan assures the reliable repayment of annual operating costs and much of the Federal investment, and provides significant economic benefits to the region while accommodating the diverse interests of other water users. As an interconnected transmission system partner in the region, Southwestern also maintains its transmission system in compliance with the regional reliability council and NERC requirements.

Evidence: Using Congressionally authorized appropriations and authorities, Southwestern has and continues to meet its marketing plan and reliability obligations to the region's interconnected power and transmission system even though budgets have been reduced in recent years. In addition, Southwestern in partnership with its power customers and the U. S. Army Corps of Engineers (Corps), developed and implemented a customer funding mechanism whereby a significant portion of Corps non-routine maintenance items are funded by Southwestern's customers. Southwestern continues to look for such mechanisms to optimize its program and reduce the burden on the U.S. Treasury. Southwestern's subsidies are discussed in various reports including GAO Report GAO/AIMD-97-110 and GAO/AIMD-00-114.

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Southwestern has been unable to state long term goals that focus on outcomes and they do not qualify for a yes rating. The goals identified by Southwestern below do not qualify for that purpose. Southwestern's arguments for achieving a yes are provided below: 1. Market and deliver all available hydroelectric power from Corps dams while balancing power needs with the diverse interests of water resource users and providing regional economic benefits to the region. 2: Operate and maintain a Federal power system to assure reliability of the system while meeting utility safety standards and encouraging competition through open access to facilities. 3: Maximize the use of Federal assets to repay the investment (principal plus interest) as well as operation and maintenance costs of the Southwestern Federal power system while supporting the President's Management Agenda. Southwestern reviews its long-term goals annually and makes operational adjustments to its Strategic Plan as needed to assure that all available power is marketed and reliably delivered, and repayment of annual operating costs and the Federal investment is achieved.

Evidence: "Southwestern's Strategic Plan; DOE Strategic Objective ER9-1; Annual Report; Annual Budget Submission; and Mission Statement."

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: Southwestern's annual performance goals are: maintain reliability in the evolving electric utility industry; meet repayment of the Federal power investment; and promote employee awareness and commitment to working safely by providing the necessary training and equipment to assure a safe working environment. The achievement of annual performance goals contribute to long-term goals to market and deliver all available hydropower, operate and maintain the power system, and repay the Federal investment.

Evidence: FY 2004 Congressional Budget Request; DOE Energy Resources Strategic Objective ER9-1, ER9-2, ER9-3, ER9-4, ER9-5; Annual Performance Plan/Report; Southwestern's Strategic Plan; Annual Report; Annual Budget Submission; and Performance and Accountability Report.

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: Southwestern recommends to the Corps how to balance power needs with the diverse interests of other interstate water users. Southwestern also works closely with its customers and interested parties to ensure repayment of annual operating costs and the Federal investment with interest. Southwestern works with the Corps, State Agencies, and other affected interests to address competing uses of interstate water resources and transmission capacity.

Evidence: Joint planning and operations meetings with the Corps; Corps/Southwestern Hydropower Council meetings; Corps/Southwestern/Customer Hydro power Conference meetings; Southwestern Power Resources Association (Customer Organization); Monthly operations conference calls with Corps; Quarterly Operations meetings; and Meetings with Competing Users.

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: Southwestern works closely with the other Power Marketing Administrations (PMAs) and the Corps on issues that affect these Agencies. Southwestern is actively involved with the NERC and other reliability organizations to ensure the reliability of and the nondiscriminatory access to transmission in Southwestern's marketing area.

Evidence: Memorandum of Understanding with the Corps; PMA Issue Meetings; PMA Peer Reviews; Department of Energy; NERC; and Southwestern Power Resources Association.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: Southwestern's internal and external reviews provide performance information to evaluate program effectiveness. Southwestern power repayment studies and customer, DOE and FERC reviews of power rates have provided information that Southwestern consistently controls costs and is meeting the requirements of the law to pay annual operating costs and most of the Federal investment. Cyber and facility security peer reviews and audits have provided recommendations resulting in additional security for the Southwestern's facilities and improved protection for the power system and automated business systems. NERC and the Regional Reliability Council Operational Audits and Control Area Reviews have resulted in improvements to the regional electrical grid of which Southwestern is a participant. Some evaluations have provided no recommendations for improvement as was the case when the DOE IG reviewed Southwestern's fiber optic program and found that Southwestern was doing a good job. Unqualified opinions from independent auditors since 1979 attest to the reliability of our financial system.

Evidence: DOE IG Review; Information Technology Reviews and Audits; Summary Management Review; Customer Formal Comment Periods on Rate Filings; DOE and FERC Rate Filings; Office of Personnel Management Audits; General Accounting Office Audits; Reliability Council Audits; Control Area Reviews; Procurement Management and Assistance Review; NERC/Regional Reliability Council Operational Audits and Control Area Reviews; DOE IG's Survey of Transmission Line Maintenance; and Independent audit of Southwestern's financial statements.

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: Southwestern's requested budget supports Southwestern's short-term and long-term performance goals. The request is based on Southwestern's best assessment of program needs and is aligned with long-term performance goals. Therefore, any funding, policy, and legislative changes affect Southwestern's ability to meet performance goals.

Evidence: Annual Budget Request; and Southwestern's Strategic Plan.

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: Southwestern relies on several annual reviews to monitor and adjust the Strategic Plan's performance goals. A Summary Management Review, Budget Decision Templates, and the Annual Financial Audit Report are prepared and reviewed by managers annually. Aligned with the Strategic Plan, Southwestern also defines Annual Improvement Measurement (AIM) Goals accomplishments for measuring performance across the Agency. Progress toward goals is updated quarterly and available on Southwestern's Intranet for all employees to monitor and track the progress toward their achievement. Utilizing the information in these reviews, Southwestern identifies and corrects any noted weaknesses in the strategic planning process.

Evidence: Summary Management Reviews; Budget Decision Templates; Achievement Improvement Measurement (AIM) Goals; and Annual Financial Audit Report.

Are acquisition program plans adjusted in response to performance data and changing conditions?

Explanation: Southwestern's funding for its program consists primarily of replacements to its existing system. Priorities are placed on those situations that pose the highest risk to safety and reliability. Southwestern's Maintenance and Engineering Offices prepare 1 year, and 10 year program plans. The Offices review these plans annually to determine if any adjustments should be made due to industry changes, reliability, emergency situations (earthquakes, tornado, etc.), or safety issues. Due to Southwestern's aging infrastructure, program plans are adjusted frequently due to these changing conditions. Recommendations are then forwarded to Southwestern's Senior Management Team for review and approval. Facility/Project Data Sheets and Budget Decision Templates are prepared for all projects and activities over $100,000.

Evidence: One and Ten Year Construction Plans; Facility/Project Data Sheets; Budget Decision Templates; and Acquisition Planning (Quarterly Meetings).

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule and performance goals?

Explanation: Southwestern's 10 year Construction Plan is updated at least annually to determine if priorities have changed. The Budget Decision Templates are updated annually. Southwestern's Senior Management Team reviews these Templates for cost estimates, schedules, justifications, alternatives and benefits before determining if a particular activity/project should be initiated or continued. This process is used by Southwestern in preparing its annual budget request analyzes trade-offs among cost, schedules, and performance.

Evidence: Annual Budget Request; 10 Year Construction Plan; Facility/Project Data Sheets; and Budget Decision Templates.

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: Southwestern's funding for its program consists primarily of replacements to its existing system. Priorities are placed on those situations that pose the highest risk to safety and reliability. Southwestern's Maintenance and Engineering Offices prepare 1 year, and 10 year program plans. The Offices review these plans annually to determine if any adjustments should be made due to industry changes, reliability, emergency situations (earthquakes, tornado, etc.), or safety issues. Due to Southwestern's aging infrastructure, program plans are adjusted frequently due to these changing conditions. Recommendations are then forwarded to Southwestern's Senior Management Team for review and approval. Facility/Project Data Sheets and Budget Decision Templates are prepared for all projects and activities over $100,000.

Evidence: One and Ten Year Construction Plans; Facility/Project Data Sheets; Budget Decision Templates; and Acquisition Planning (Quarterly Meetings).

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: Performance standards for Federal managers include specific Agency activities for which they are held responsible and accountable. The Agency Strategic Plan contains objectives which are the responsibility of Agency managers to implement. The Agency also has an annual performance and award system tied to the objectives of the Strategic Plan. Each manager and employee annually reviews and recommends, and commits to the achievement of the goals. The Strategic Plan is reviewed annually and adjusted as needed to address deficiencies. Southwestern's customer group reviews Southwestern's operations and activities as well as rates. The regional reliability council reviews Southwestern's operational performance. Southwestern's customers also review work performed by Southwestern under its non-Federal reimbursable program. All projects/activities whose estimated cost is $100,000 or more require a budget decision template justifying the project/activity.

Evidence: Employee Annual Performance Appraisals; Achievement Improvement Measurement (AIM) Award Program; Various operational reviews of Southwestern's system by the Regional Reliability Council such as Southwestern's area control error, under frequency and other NERC compliance requirements; Annual summation of the duration of Southwestern's transmission line outages; Contract audits; Facility/Project Data Sheets; Public forums for customer review of system rate changes; Customer Review of System Operations/Activities; and Budget Decision Templates.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Southwestern uses generally accepted accounting practices in managing its obligations. Obligations are entered into a financial management accounting system by organization, fund type, and object code. Appropriate approvals are obtained in the system before the actual obligations are made to assure accountability and that the funds are used for the intended purpose. The enacted budget is used as the guiding document in the obligation of funds with the exception of emergency purchases. The financial management system provides program managers up to date reports on the obligations and expenditures that occur. Southwestern does periodic reviews on the obligation and expenditure activity to assure that obligations occur in a timely manner. A formal Mid-Year Review is conducted to assure that all requirements are being funded on schedule. In addition, managers prepare project estimates. These estimates are compared with the obligations and expenditures to enable the manager to keep the project on schedule.

Evidence: Oracle Reports; Enacted Budget; Budget Status of Funds Report; Project Cost Estimates; Purchase Order Reports; Mid-Year Budget Review; FERC Uniform System of Accounts; Annual Financial Statement Audits including Internal Controls; and Budget Execution Report (SF133) to OMB/DOE.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Southwestern uses cost comparisons and competitive sourcing as required under Federal Acquisition Regulations to satisfy the principle of "lowest possible rates to consumers consistent with sound business principles" as set forth in Section 5 of the Flood Control Act of 1944. In addition, Southwestern's rates are reviewed by its customers in a public forum for overall cost effectiveness. Southwestern utilizes an Agency performance award system called AIM (Achievement Improvement Measurement) in which the objectives of the Strategic Plan are summarized in annual performance targets. Each employee's individual performance is reviewed semi-annually. All projects with an estimated cost of $100,000 or more must be justified in a project template in order to receive funding from the Agency. Additionally, the Agency maintains a rolling 10 Year Construction Plan and detailed individual program plans for major projects such as the one prepared for Southwestern's fiber optic system.

Evidence: AIM Award Program; Federal Acquisition Regulations; Budget Decision Templates (for Procurement over $100,000); Purchase Orders/Contracts; Southwestern's Performance Award System tied to Objectives set forth in the Agency's Strategic Plan; 10 Year Construction Plan; and Detailed Program Plans for Major Projects.

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: Southwestern budgets for most annual costs of operating the program including allocated overhead and administrative costs but assumes some debt subsidies. Overhead is allocated by direct labor hours and all direct labor hours are budgeted. Southwestern, by law, recovers costs of the program in accordance with RA 6120.2 and the Flood Control Act of 1944. Funding level changes are evaluated and program performance impacts are identified in budget proposals. Effects on reliability and repayment are analyzed.

Evidence: Proposed Budget; Enacted Budget; Budget Status of Funds Report; RA 6120.2; and Flood Control Act of 1944, Section 5. See also GAO/AIMD Reports 96-145 and 97-110

Does the program use strong financial management practices?

Explanation: Southwestern's books and records have been audited on an annual basis by an independent audit firm since 1979. The fact that Southwestern has always received an Unqualified Opinion attests to the fact that Southwestern maintains strong financial management practices. During the FY 2001 and FY 2000 audits there were no material findings or recommendations. Southwestern complies with accounting regulations prescribed by the U.S. Treasury, the FERC, the DOE and the CFO Act of 1990 to ensure strong financial practices. Southwestern's financial management employees are trained in accordance with the DOE Financial Management Development Program. Southwestern endeavors to use the latest financial accounting tools and management practices such as use of the Oracle Financial System.

Evidence: Southwestern's audited financial statements for FY 2001 and FY 2000; DOE Financial Management; Development Training; Oracle; and FERC Uniform System of Accounts.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Southwestern continuously improves its business systems and follows sound business practices by leveraging its capabilities to achieve functional efficiencies and process improvements. For example, an in-house computer-based maintenance planning system consisting of two major functions is used. One part of the system Maintenance Management Information System (MMIS) is used for electrical substation equipment and microwave station maintenance scheduling and planning while the other part Overhead Transmission Maintenance System (OTMS) is used for all transmission line and right-of-way maintenance scheduling and planning. This system establishes a comprehensive maintenance database for reliability-centered maintenance programs and principles. Oracle Financials is used to ensure that Southwestern's complex business is totally and accurately accounted for. Southwestern uses project management principles and practices. Southwestern has developed a multi-year effort to recruit and maintain highly qualified employees.

Evidence: Process documentation is continuously updated; MMIS and OTMS is updated by using a complex testing and verification process to ass ure accuracy and user-friendliness; Facility/Project Data Sheets; Budget Decision Templates; and Organization 2000 Plus.

Does the program define the required quality, capability, and performance objectives for deliverables?

Explanation: Southwestern's offices prepare statements of work for the installation and procurement of equipment. These statements are used to prepare Invitations for Bid (IFB) or Requests for Proposal (RFP).

Evidence: Statements of Work; IFB/RFP; Procurement Package; and Performance Clauses.

Has the program established appropriate, credible, cost and schedule goals?

Explanation: Southwestern's 10 year Construction Plan is reviewed at least annually to determine if priorities have changed. The Facility/Project Data Sheets and Budget Decision Templates are updated annually reflecting any necessary changes. The Budget Decision Templates provide Southwestern's Senior Management Team with the necessary information for decision making, including cost estimates, schedules, justifications, alternatives, and benefits to determine appropriate program adjustments.

Evidence: 10 Year Construction Plan; Facility/Project Data Sheets; Budget Decision Templates; and Power Repayment Studies.

Has the program conducted a recent, credible, cost-benefit analysis that shows a net benefit?

Explanation: The Facility/Project Data Sheets and Budget Decision Templates are updated annually reflecting any necessary changes. The Budget Decision Templates provide Southwestern's Senior Management Team with the necessary information for decision making, including cost estimates, schedules, justifications, alternatives, and benefits to determine appropriate program adjustments. Southwestern's 10 year Construction Plan is reviewed at least annually to determine if priorities have changed.

Evidence: Budget Decision Templates; Power Repayment Studies; 10 Year Construction Plan; and Facility/Project Data Sheets.

Does the program have a comprehensive strategy for risk management that appropriately shares risk between the government and contractor?

Explanation: Each construction project is evaluated for risk at the beginning of the procurement process. When the requirements are defined, the procurement and program offices make a determination as to the type of contract to be awarded. To minimize the risk to the government all contracts include detailed statements of work and surveillance plans. These procurement tools promote sound risk management.

Evidence: Statements of Work; IFB/RFP; Procurement Package; Surveillance Plan; and Performance Clauses.

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: The table below does not provide long-term goals. Southwestern needs to continue its efforts to define long-term output oriented goals. The statements below are Southwestern's proposed long term goals.

Evidence: Annual Performance Plan; Accountability Report; Power Repayment Studies; Annual Financial Audit Report; NERC Standards; Bureau of Labor Statistics; Occupational Safety and Health Act (OSHA) Reports; Southwestern's Marketing Plan; Southwestern's Strategic Plan; and Annual Budget Submission.

Does the program (including program partners) achieve its annual performance goals?

Explanation: See table below.

Evidence: "Annual Performance Plan; Accountability Report; Power Repayment Studies; Annual Financial Audit Report; NERC Standards; Bureau of Labor Statistics; OSHA Reports; Southwestern's Marketing Plan; Southwestern's Strategic Plan; and Annual Budget Submission."

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: Southwestern meets its safety and reliability goals every year under average water conditions. Repayment of the Federal investment (principal plus interest) is achieved. Due to cost control efforts, Southwestern's annual power repayment studies have identified the need for only minor payment increases. The only uncontrollable external variable that impacts repayment is water conditions. Southwestern's budget has remained at the same level over the last three years without any financial relief for new initiatives or cost of living adjustments. Southwestern has reduced its staff and cut costs in non-direct program areas to achieve program goals. Efficiencies and cost savings are evident in that Southwestern has been able to meet its program goals.

Evidence: Annual Performance and Accountability Report; Annual Performance Plan; Annual Budget Requests; and Annual Power Repayment Studies.

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: Southwestern has successfully marketed all Federal power in its region. Southwestern has not missed a required payment on a Federal power investment within the required repayment period and is on target to meet its overall repayment requirement. Southwestern has been and continues to be one of the top NERC performers, consistently exceeding the "Pass" rating. Southwestern's long-term safety performance is better than industry average.

Evidence: Bureau of Labor Statistics; NERC Reports; Annual Report; and Annual Power Repayment Studies.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: Southwestern has operational and financial reviews on an ongoing basis, which provide evidence that our program is accomplishing its mission.

Evidence: NERC Quarterly Compliance Ratings;The DOE IG's survey of Transmission Line Maintenance; DOE's Physical Security Audit in August 2001; Southwestern's Independent Financial and IT Audit; DOE Cyber Security Audit; PMA Peer Review of IT Controls at our Power Dispatch Center; DOE Personnel and Procurement Reviews; NERC Compliance Surveys and Audits; Annual Power Repayment Studies; Rates Public Forums; FERC Rate Reviews; DOE Reviews; Safety and Environmental Audits; Customer Surveys; DOE Fiber Optic Study; and OPM Review.

Were program goals achieved within budgeted costs and established schedules?

Explanation: The majority of projects are completed on time and within budget. For those projects which include rights-of way or real property acquisition and/or site work, both project scope and schedule may be adversely impacted by site conditions or negotiations with land owners. Weather conditions and outages on adjacent facilities owned by the Government or other utilities may occasionally delay project completion.

Evidence: "Construction Program Budget Execution Report; Facility/Project Data Sheets; and Financial Management System Data."