Table A1. Comparison of Estimates for Federal Electricity Subsidies

Report, Author Analysis Year Estimate (Million Nominal Dollars) Estimate (Million 1999 Dollars) Scope Approach Main Findings
(Nominal Dollars)
The Hidden Costs of Energy. Center for Renewable Resources 1984 28,000 42,080 Electric utilities Budget outlay, tax benefits, loans $4 billion attributed to REA, $1.2 billion in interest rate subsidy to PMAs and TVA.
Federal Energy Subsidies: Energy, Environmental, and Fiscal Impacts. Koplow 1989 13,666 17,380 Industry-wide, plus Federal Tax benefits, budget outlays $5.7 billion in agency outlays, of which $1.2 billion to REA, $7.9 billion in tax benefits, most of which to ACRS.
Federal Energy Subsidies. EIA Fiscal year 1992 1,409 1,608 PMAs, TVA, REA Budget outlay, net of receipts Alternatively: $4.3 billion at IOU interest rate, $2.8 billion at government rate; $2 billion using market price.
Reducing the Deficit: Spending and Revenue Options. CBO 1995 210 223 BPA, PMAs Cross subsidy, and price difference $145 million for BPA's residential exchange program; another $65 million is revenue forgone from a PMA average wholesale rate lower than the national average, and the preferred customer requirement.
PMAs: Cost Recovery, Financing, and Comparison to Nonfederal Utilities. GAO Fiscal year 1995 311 330 SEPA, SWPA, WAPA Interest rate subsidy plus unrecovered costs Includes $228 million in Treasury rate subsidy for three PMAs and $83 million for direct power costs not recovered through rates.
The Federal Government's Net Cost and Potential for Future Losses. GAO Fiscal year 1996 2,462 2,565 SEPA, SWPA, WAPA, BPA, RUS Interest rate subsidy plus unrecovered costs Includes $1.878 billion for RUS, $185 million for three PMAs' financing costs and other power-related costs, and $398 million for BPA.
Should the Federal Government Sell Electricity? CBO 1995 Not estimated Not estimated Federal utilities Net cash flow in present terms using average market rates Federal assets are worth between $45 billion and $62 billion, depending on power rates; selling these assets would either net $16 billion or cost $0.2 billion.
Regional Effects of Changes in PMAs' Rates. GAO 1995 Not estimated Not estimated SEPA, SWPA, WAPA Differential in preference customer average rates between PMA power and all power sources Very little price differential in SEPA, moderate price differential in SWPA and WAPA.
Subsidies and Unfair Competitive Advantages Available to Publicly-Owned Utilities. Putnam, Hayes & Bartlett 1995 4,475 4,749 All customers, including IOUs Market price difference Market price estimated as the difference between IOUs' bulk rate (4.87 ¢/kWh) and PMAs (3.05). Report also estimates competitive advantage through tax avoidance and lower cost of capital.

Appendix A

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File last modified: July 10, 2000

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