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This podcast uses government documents to illuminate the workings of the American government, and offer context around the effects of government agencies in your everyday life.
Welcome to Civil Discourse. This podcast will use government documents to illuminate the workings of the American Government and offer contexts around the effects of government agencies in your everyday life. Now your hosts, Nia Rodgers, Public Affairs Librarian and Dr. John Aughenbaugh, Political Science Professor.
N. Rodgers: Hey, Aughie.
J. Aughenbaugh: Good morning, Nia. How are you?
N. Rodgers: I'm feeling powerful. How are you?
J. Aughenbaugh: I was just going to say that.
N. Rodgers: I stole your thunder.
J. Aughenbaugh: Well, that's quite right. The number of times in these podcast episodes that by the end of the episode, I've gone ahead and ruined your well constructed plans to be the president, the Secretary of State, the head of our Space Force, etc.
N. Rodgers: I'm still open for those jobs. Donald Trump has not called me.
J. Aughenbaugh: The number, turnabout as they say, is fair play.
N. Rodgers: I think that I may have a loyalty gap problem.
J. Aughenbaugh: A loyalty gap problem. Wow, we just went existential.
N. Rodgers: Donald Trump, I think, won't hire me for a job because I don't think I have sufficient loyalty to anybody or anything, because I'm Gen X, and we are first and foremost loyal to ourselves because we're feral.
J. Aughenbaugh: Yes.
N. Rodgers: But we're also loyal in small groups. We're not really loyal to large institutions. I'm loyal to VCU to a point. But then there's a point where I'm like, we've gone too far now.
J. Aughenbaugh: Well, it's an interesting phenomenon how generations respond to phenomenon. I know that I just used phenomenon twice.
N. Rodgers: You're phenomenal.
J. Aughenbaugh: Yes. I'm not powerful today listeners, I'm phenomenal. Anyways, that was so cheesy. But to me, it is fascinating because one of the reasons why you and I get along so well in this podcast works is that we do have a shared set of, if you will, experiences in how we view the world to a certain extent. Because even though I grew up in the North, you grew up in the South, we're from the same generation. Our view on institutions, we remarked on this podcast that we are inherently skeptical of institutions even when they do good because our experience in our youth, eventually, they're going to screw up.
N. Rodgers: Just wait. The screw will turn.
J. Aughenbaugh: Okay.
N. Rodgers: It's funny. We are also broadly loyal, I think you and I, to the United States.
J. Aughenbaugh: Yes.
N. Rodgers: To the US government, to the US way of life. I think we're both broadly loyal to those concepts. Especially, not broadly, we are specifically loyal to democracy and the idea of a democratic world in which to live. But then we're also like, yeah, but. We say that a fair bit, which I think is why neither one of us has been offered a job in the current administration which prizes personal loyalty enormously. I don't know about you, but I can name the people on two hands that I'm personally loyal to.
J. Aughenbaugh: What we're referring to listeners, is the number of people who if they called us up in the middle of the night-
N. Rodgers: I'd bail you out of jail.
J. Aughenbaugh: Yeah.
N. Rodgers: I'd help you bury a body.
J. Aughenbaugh: Yeah.
N. Rodgers: I'd cover for you while you left the country, those kind of people. Because there's a whole bunch of people I like, and then I would do basic things for. Do you have a paper clip? Sure, here, take 20.
J. Aughenbaugh: But if they went ahead and called me up and said, hey, Aghie, I need you to go ahead and drive me out of state because I think law enforcement is breathing down my neck.
N. Rodgers: It's looking for me, I'd be like, all right. But that number's not real high.
J. Aughenbaugh: It's not real high because other people would be like, so what did you do?
N. Rodgers: There's a small number I wouldn't ask. I'll just be like, okay, get in the car. Let's go.
J. Aughenbaugh: Give me 5 minutes so I can go ahead and fill up my coffee mug, and I'll be outside your door.
N. Rodgers: Which by the way, we are not suggesting that you should thwart law enforcement at all.
J. Aughenbaugh: No.
N. Rodgers: We're just saying that we probably would for a limited number of people.
J. Aughenbaugh: All that aside, and some of our listeners are just like, what is the focus of this talk?
N. Rodgers: What is the episode about? What are we talking about?
J. Aughenbaugh: Interestingly enough, we're going to talk about power, but it's going to be an agency that listeners, I'm going to acknowledge, and this might be the first time I've acknowledged this on the podcast. Until Nia went ahead and said that she wanted to do an entire episode on this agency, I was unaware this agency existed. Even though I have a PhD in public policy and administration, I did not know this agency existed. Right now, Nia's got her hands above her heads.
N. Rodgers: I have won the lottery. This is my lottery win for the day.
J. Aughenbaugh: She is celebrating because she's just like, I actually stumped.
N. Rodgers: Up the chump. I stumped. Do you remember that from the car guys?
J. Aughenbaugh: Yes.
N. Rodgers: The two brothers who had the car show on NPR. We used to have to stump the chump. Were able to call in and say, my car is going, waka waka waka. What does that mean? I love those guys.
J. Aughenbaugh: I always like it.
N. Rodgers: Anyway, I love it when I say, what about this? Well, you almost never. In fact, this is the first time you've said.
J. Aughenbaugh: Because usually when Nia goes, hey, Aughie, can we go ahead and do about X? And then 5 minutes later after I've won it.
N. Rodgers: After you've waxed poetic.
J. Aughenbaugh: We'll go about it. Nia's just like, we can do an episode about this.
N. Rodgers: There's enough information.
J. Aughenbaugh: Aghie's already ready to go. But this one, I had to go to the websites. I had to go ahead and pull up some books. I really had to go far to go ahead and find, if you will, critiques. It was difficult. But nevertheless, we are talking today about the Western Area Power Administration, WAPA, which is one of four power marketing administrations within the United States Department of Energy, which, by the way, still exists as of the day and time that we are recording.
N. Rodgers: But that can always change. If that no longer exists, good luck to people in the West with your power.
J. Aughenbaugh: This will be almost like a collector's episode. Right?
N. Rodgers: If it no longer exists, by the time of airing, we'll put in a note on the research guide that says, never mind.
J. Aughenbaugh: Never mind
N. Rodgers: Remember that from SNL. Never mind.
J. Aughenbaugh: Never mind.
N. Rodgers: But anyway, what's the role of the power marketing administrations?
J. Aughenbaugh: There's four of them. We're just going to focus on one simply because it is so important for the western part of the United States. But the role of these power administrations is to market wholesale hydro-power, which is generated in 57 hydro electric federal dams operated by the Bureau of Reclamation.
N. Rodgers: Wait, those 57 are the ones out west. There are more dams than that in the United States. This is the Western area power administration which is 57.
J. Aughenbaugh: Yeah. This is just a focus on an agency within a unit of the federal government, the Bureau of Reclamation that we're going to do a standalone episode on the Bureau of Reclamation. But the Bureau of Reclamation, the United States Army Corps of Engineers and the International Boundary and Water Commission. All have the authority in law to take the massive amounts of power generated by dams and other huge bodies of water in the United States and generate electric power. There's two words there, hydroelectric. This is electric power that is generated by water.
N. Rodgers: By dams.
J. Aughenbaugh: Yes.
N. Rodgers: Okay. Briefly for folks who don't know how this works. Generally, the reason you build a dam is for irrigation and for reservoirs.
J. Aughenbaugh: Yes.
N. Rodgers: You hold water for when rain doesn't come, and you can release water into irrigation networks for agriculture, you can release it into cities for water.
J. Aughenbaugh: Consumption.
N. Rodgers: Consumption for people and all that kind of stuff. That's why you build a dam. But the benefit of the dam is that when you have water that goes over the dam, because dams all release some level of water because otherwise they would break.
J. Aughenbaugh: Yeah.
N. Rodgers: They all release some level of water. When water goes over a dam, and enter here technical stuff that Nia has no idea how actually happens because it's engineering. But somehow power is generated on the turbines that the water goes over, and it turns turbines which generates power. Boy, is that a some engineer somewhere just screamed, his heart was being struck or her heart was being stuck. I'm sorry, but that's more or less how you get the power.
J. Aughenbaugh: Yeah. For our listeners who are engineers.
N. Rodgers: Sorry.
J. Aughenbaugh: Yeah. Sincerely, we apologize.
N. Rodgers: We love you. If you want to come on and explain, we will have you on.
J. Aughenbaugh: Okay. But the idea here is WAPA delivers this power through a 17,000 circuit mile high voltage power transmission system, and they have categories of customers. They have 700 preference power customers across the West. Who then turn that around and deliver that to 40 million consumers.
N. Rodgers: Retail. They get power and then they can sell it. They get it wholesale and they can sell it.
J. Aughenbaugh: Sell it retail.
N. Rodgers: Retail.
J. Aughenbaugh: Yes.
N. Rodgers: Then if there's leftover, other people can buy it. If something is generating a lot of power, so if for some reason, there's a lot of water. Yeah.
J. Aughenbaugh: Like the infamous Hoover Dam. If there's surplus Hoover Dam, wholesale power remaining.
N. Rodgers: Other companies can buy it. What they'll do is subsidize people's power with that power because it costs less. What they can do is give a break to their customers.
J. Aughenbaugh: Exactly.
N. Rodgers: They'll usually say, Hey, this month, your power bill dropped because of whatever. It's a nice benefit they can give. How many states?
J. Aughenbaugh: WAPA services 15 central and western states. This is pretty much the entirety of the western part of the United States, with the exception of Alaska and Hawaii for obvious reasons. But we're talking about Arizona, California, Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, both Dakotas, Texas, Utah, and Wyoming.
N. Rodgers: Although Texas also has another power grid.
J. Aughenbaugh: Yes.
N. Rodgers: Texas is a funky part of this because otherwise, you would not have had the insanity that you had with Texas in thee blackouts and all that stuff.
J. Aughenbaugh: Yeah, a couple winters ago. But WAPA services mainly Western Texas.
N. Rodgers: Got you.
J. Aughenbaugh: Yeah. Interestingly enough, WAPA was created in 1977.
N. Rodgers: It's recent.
J. Aughenbaugh: It is recent. This again, occurred during the Carter administration after the Department of Energy was created. Now, for our listeners, we in the United States did not have a standalone Department of Energy until after the energy crisis of the early 1970s.
N. Rodgers: You got to fix that. We need a department.
J. Aughenbaugh: Okay. Which was pretty remarkable when you think about how the United States was this industrial giant but we did not have the energy.
N. Rodgers: Nobody to manage.
J. Aughenbaugh: When we talked about the Department of Energy in a previous podcast episode, Nia, you and I fixated on that for easily five minutes, right?
N. Rodgers: Yeah.
J. Aughenbaugh: We were just like, How in the world do you create if not the one of the most powerful industrial countries in the entire world without a coordinated energy program. Well, hey, it's the United States. We don't.
N. Rodgers: We are off in the bull in the China shop.
J. Aughenbaugh: Yes. Like, there goes our tail. Under the law, WAPA assumed power marketing responsibilities in ownership, operation and maintenance of this transmission system from the Bureau of Reclamation.
N. Rodgers: We should also note that while Aughie mentioned California as one of the states. A huge amount of California's power skull comes from PG&E.
J. Aughenbaugh: Yes.
N. Rodgers: It's Pacific Gas and energy. If you live in California, they're a bunch of criminals. If you don't live in California, they are a bunch of screw ups. Either way, they are not perceived particularly well.
J. Aughenbaugh: Oh, yes.
N. Rodgers: In the power generation business. But this is not them. This is where Texas, you're talking about the western part of Texas, you're talking about the eastern part of California being under WAPA?
J. Aughenbaugh: Yeah.
N. Rodgers: It's separate from the PG&E, stuff that causes fires on a regular basis and all that.
J. Aughenbaugh: The Pacific Gas and Electric company.
N. Rodgers: Goes along the coast and is more of the major city.
J. Aughenbaugh: If you ever want to get an earful from a resident.
N. Rodgers: Ask anybody in California? Hey, how do you feel about PG&E? Then just sit back.
J. Aughenbaugh: Sit back.
N. Rodgers: What you should have is a donut and some coffee, 'cause it's going to be a while before you're done.
J. Aughenbaugh: Order the meal from the wait staff first.
N. Rodgers: First.
J. Aughenbaugh: Then go ahead and just sit back because you will get an earful. Anyways, so let's talk about how the marketing works. Nia has basically already explained the engineering process. The marketing works as follows. You have a whole bunch of federal dams in these11 states. Well, there's more states. But there's basically 11 states out.
N. Rodgers: Big dams are in 11 states.
J. Aughenbaugh: These dams produce all this hydropower that Nia so precisely described a few moments.
N. Rodgers: Shut up. I'm not an engineer.
J. Aughenbaugh: Well, you did a better job than I would have. I've been like, Okay, there's a whole bunch of water. Water is powerful. It produces energy. We tap the energy. Ya, water. It basically produces about 40% of all the hydroelectric generation in the Western and Central United States. This used to be produced by what energy source, Nia.
N. Rodgers: Coal, I would say.
J. Aughenbaugh: Yeah, Coal. But the last coal generating electrical plant closed in 2019, and that was the Navajo generating station near Page, Arizona.
N. Rodgers: The last one that WAPA controls.
J. Aughenbaugh: WAPA controls. Now, the private sector has others. But those coal generating plants in the private sector, okay, are severely regulated by the EPA.
N. Rodgers: Currently.
J. Aughenbaugh: Currently, yes. They may not be regulated by the EPA.
N. Rodgers: By the time you hear this episode.
J. Aughenbaugh: By the time we finish recording this finish Sorry.
N. Rodgers: That's true.
J. Aughenbaugh: I should have given our listeners a sarcasm alert. I just went right for the jugular there. Anyways, as Nia described, hydropower is a byproduct because the purpose of the dam is to store water for irrigation.
N. Rodgers: It's consumption of a variety of consumption. But also, it's designed for navigation and flood control, which many environmentalists don't like.
J. Aughenbaugh: Right.
N. Rodgers: Because a whole bunch of ecosystems get destroyed when you, if you will, impose a dam dam.
N. Rodgers: We can't count the number of valleys that have been flooded when dams have been built.
J. Aughenbaugh: Yeah.
N. Rodgers: But this is basically making something good out of something bad in the sense of if you're going to do that, then you should also try to make it as productive a situation you are going to destroy an ecosystem, then, if you're going to flood a valley, then make sure that the people around that can get power or can do something that's a good that comes out of it.
J. Aughenbaugh: When you think about federal dams, obviously, you have the environmental impacts. But Nia, you mentioned this. You're talking about irrigation for farming, municipal and industrial water needs, recreation.
N. Rodgers: Like Meat.
J. Aughenbaugh: Ask a lot of people out west how big the recreation industry is on bodies of water. You have saline control. Fish and wildlife. Again, you create dams, you can populate those bodies far behind behind, with fish and wildlife. Now, initially, these dams produced energy for project and industrial purposes. But then it expanded, and this is where you get the need for WAPA and the other three energy marketing, if you will, agencies. Nia already described how it works. WAPA first reserves the power to meet project needs. Then it sells the surplus generation at cost based rates to preferential customers, and then any other remaining is sold in short term spot markets. Let's just say, for instance, you are an energy company in Arizona, and for whatever reason, one of your plants goes down for maintenance, sabotage or whatever. You need a short term supply of energy for your customers. You can go to WAPA, for well established market rates, you can go ahead and buy that surplus power.
N. Rodgers: Right.
J. Aughenbaugh: Again, this is supposed to create certainty in the market.
N. Rodgers: It's supposed to create stability for consumers.
J. Aughenbaugh: Yes.
N. Rodgers: You don't have to wonder about rolling blackouts, rolling brown outs, that whole thing. It seems to me a good system in the sense of it allows them to come offline for maintenance without people being affected. Most of the time when your power company goes down for maintenance, you don't know it.
J. Aughenbaugh: That's right.
N. Rodgers: Because they've purchased other power and they're supplementing so that they don't have to tell you to turn off your oxygen for your grandmother or whatever. It's one thing if you have a blackout for four hours in a temperate zone when it's the nice weather and you don't have to really stress about. But it's a whole other thing for people who are medically required to have power.
J. Aughenbaugh: You don't want hospitals, for instance, in a community to go without power.
N. Rodgers: Right. Now you don't want the elderly to have to go without heat or air conditions.
J. Aughenbaugh: WAPA and the other energy marketing agencies are not supposed to make a profit. It's written in the law.
N. Rodgers: Again yet.
J. Aughenbaugh: But, there have been presidents who have looked at WAPA and other arrangements in federal law as potentially profit generating enterprises within the government. Now, the only reason why the private sector energy firms did not have a problem with WAPA is that the federal government explicitly promised they would not be in competition with the private sector.
N. Rodgers: Right.
N. Rodgers: They, generally speaking, sell to that sector at a fair and reasonable rate, but not they act like they're not trying to make money.
J. Aughenbaugh: That's right.
N. Rodgers: They have to they do have to build in the dam repair and replacement, line repair and replacement, those costs. They are generating a small profit, but it's not really a profit so much as it is overhead. They're trying to cover overhead.
J. Aughenbaugh: I like how you described it, because in a number of the sources that I reviewed, they went ahead and referred to the revenues generated by WAPA as covering overhead costs.
N. Rodgers: That's what they're supposed to do.
J. Aughenbaugh: That's right. Annual operations and maintenance, plus interest. What a lot of Americans don't understand is a lot of these dams were built with people loaning federal government money to buy them.
N. Rodgers: A project borrows money, and it can borrow money from within the government, like it can borrow money from the Department of Transportation or the Department of Interior or Department of whoever, but it has to pay for itself in some way. You are paying back the money that you borrowed to build the dam.
J. Aughenbaugh: These are known as capital investment or improvement projects. When the government does this, the government frequently sells bonds.
N. Rodgers: You pay back to people who basically lend you money.
J. Aughenbaugh: Lend you money, and eventually you pay off those bonds. That's the hope.
N. Rodgers: But you also have constant replacement of transmission lines and the transformers that blow, occasionally, you hear them in your neighborhood boom, and then suddenly the power goes off. All of those have to be replaced. They do need to make enough money to take care of that themselves. Otherwise, they're just going deeper in the home.
J. Aughenbaugh: Once you go ahead and create this kind of marketing agency, where you have so many states with so many people relying upon it.
N. Rodgers: You have to maintain it, you can't let it fail.
J. Aughenbaugh: You can't let it fail.
N. Rodgers: If you let it fail, you're now PG&E. I'm just saying.
J. Aughenbaugh: I've already talked about the four basic types of contracts, basically you got the wholesale contracts, but also you got some retail contracts, particularly for short term energy buys from private sector companies. They got long term firm power, so they will enter into a 10, 15, 20 year contracts. Again, this creates stability in the market.
N. Rodgers: Because it is not a small thing for a private company to build a power station. They are enormously expensive, and it takes years to get the components. This idea of one of the things I studied in Homeland Security was EMPs. Electromagnetic pulses. If an electromagnetic pulse takes down power a power station, replacing all the bits that make the power station work, could take 2, 3, 4 years to do because they have to be built, whatever it is they're going to be then brought in. Nobody has an extra power station laying around.
J. Aughenbaugh: You can't go to the local hardware store.
N. Rodgers: Right and and pick up an 18 billion watt transmitter. You just can't.
J. Aughenbaugh: Can't go to Home Depot or Lowe's and say, hey, this is my weekend household project. No. You're going to have to go ahead and plan this out. You're going to have to have a company actually build you the parts, because again, these are not parts that are just lying around. Then you have to go ahead and install this. We're talking about the United States West. You're talking about mountains.
N. Rodgers: Desert. How to reach spots. There's some real there's some real financial investment for private companies, which is why the government providing them a stable source of power that they can then sell, makes them also willing to be in parts of the country where the density would not make the money otherwise. For instance, on the East Coast, if you build a power company in let's say you build a power transmission, your private company, and you build one in the Richmond area, you already have a density of population here that it's likely that you will find customers. Whereas in the West, you can go miles without seeing another human. To say that it is not densely populated is to understate it by about a factor of 10.
J. Aughenbaugh: But then in 10 years, it could become densely populated because that's migration patterns. Again, but you got to be ready for this when you are a power company
N. Rodgers: But also, we need to support Wyoming, which will never have a huge population, but still needs power.
J. Aughenbaugh: Power, yes.
N. Rodgers: Because people there still need to cook and bathe and go to work and do all the chores.
J. Aughenbaugh: Have a hospital, have a school. The other thing that WAPA does is, and they were mandated by Congress to do this. WAPA sells power generation from Dans and power plants on project specific basis. A project can have one large power plant or a combination of power plants. Congress will determine the definition of a project. So far, WAPA has 11 rate setting systems to sell power. For instance, you have the Boulder Canyon project that's located where? Boulder Colorado. You got Central Arizona, Central Valley, which is in California. The Loveland area is right outside of Denver. You got one in Missouri. You got the Provo River Project.
N. Rodgers: Which is separate from the Salt Lake City Integrated project.
J. Aughenbaugh: Yes. Again, this is where, representatives of those states in Congress are like, "Okay, wait a minute here. We now have, population moving into these areas".
N. Rodgers: We need more power generation.
J. Aughenbaugh: We need more power generation. Instead of relying upon the private sector, which will, hey, I'm not being critical of the private sector, but the private sector is going to go ahead and do a cost benefit analysis.
N. Rodgers: Reasonably so that's the whole idea of businesses. They're often cautious about leaping into a system, they need to have some guarantee that they're going to get their investment.
J. Aughenbaugh: In many ways, the federal government's broadband infrastructure project is based on that idea. This idea that we saw with WAPA and the other three energy marketing agencies, right, which is, if the private sector can't or is unwilling to address this, then the federal government is and will utilize, if you will, resources that are already available. Again, these are dams that have been built in some situations decades ago.
N. Rodgers: Don't forget listeners data centers. Data centers are being built all over the nation and data centers suck up more energy.
J. Aughenbaugh: Water and energy. They are huge users of the environment.
N. Rodgers: Sorry of power and energy. Now, occasionally, WAPA screws up in the sense that their transmission lines don't deliver properly to the right place. Isn't that what happened in the Southwest blackout in 2011?
J. Aughenbaugh: Yes.
N. Rodgers: I said they didn't deliver enough power in the correct amount to the correct people.
J. Aughenbaugh: Which one do you want to focus on here, Nia? You want to focus.
N. Rodgers: Isn't that one of the things that they had a yeah, you had a problem with?
J. Aughenbaugh: There have been a couple instances where WAPA, I think has been rightly criticized for blackouts or not foreseen energy needs. Listeners, Nia just mentioned the 2011 Southwest Blackout.
N. Rodgers: I believe that was heat-related. It was heat related. It went up to 100 billion degrees in the Southwest, and everybody turned their air conditioners on at the same time. There wasn't enough delivery.
J. Aughenbaugh: WAPA did not deliver enough power for those communities, and you actually had situations where you had hospitals and schools in Southwest communities, particularly in Arizona, New Mexico, in the southern part of California, who had to close down.
N. Rodgers: Eventually for patients because it was two. They couldn't manage.
J. Aughenbaugh: They could not provide the care that their patients needed. WAPA ended up settling out of court and paid for damages. But this was not the first time, okay?
J. Aughenbaugh: In 2005, WAPA helped remedy a transmission bottleneck near Los Banos, California. But the bottleneck rose three years after a crisis in that same area that WAPA was strongly encouraged by Congress to help alleviate. If that makes sense.
N. Rodgers: They didn't.
J. Aughenbaugh: They didn't.
N. Rodgers: That's what they didn't act when they should have. They didn't build out.
J. Aughenbaugh: The transmission.
N. Rodgers: And they didn't adjust the power to that area.
J. Aughenbaugh: Yes.
N. Rodgers: They're not perfect. We will come to a couple of other controversies later at the end. I guess we could. No, let's leave those to the very end.
J. Aughenbaugh: Who are WAPA's customers? Interestingly enough, WAPA follows mandates from a law set in 1939 during the Great Depression. WAPA is supposed to give preference to certain types of nonprofit organizations seeking to purchase federal power. Again, these are typically underserved energy areas of the United States, where the private sector has not yet made an investment to serve those customers. Then you have preference customers, not surprisingly state and federal agencies, water and irrigation districts, which are extremely important.
N. Rodgers: Only if you want to eat.
J. Aughenbaugh: Yeah, if you only want to eat.
N. Rodgers: Only if you want to eat. If you don't want to eat, then who cares about irrigation?
J. Aughenbaugh: Then you have local governments, public utility districts, Native American tribes, and rural electric cooperatives. Again, these are areas where historically, the private sector has underserved them.
N. Rodgers: A rural electric cooperative could be read as teeny tiny power company.
J. Aughenbaugh: Yes.
N. Rodgers: It's probably got I don't know, 1,000 customers, 2,000 customers. A rural cooperative is not like dominion, where it covers a state like Virginia.
J. Aughenbaugh: But then WAPA has a large amount of discretion in regards to geographical limits, setting up marketing area boundaries. These are all things that have to get negotiated. Again, this is very much an example of Congress creating something and then saying to the experts in the bureaucracy, now you make this work because we want to make sure who gets what, Nia. Customers get electricity.
N. Rodgers: We want power distribution. Make it happen.
J. Aughenbaugh: Make it happen.
N. Rodgers: This is like when EPA was first formed and they said, go make the air clean.
J. Aughenbaugh: Yes.
N. Rodgers: We don't care how you do it, basically.
J. Aughenbaugh: Clean up the water.
N. Rodgers: Oh, okay.
J. Aughenbaugh: Any guidance here? No, you guys are the experts. Clean it up.
N. Rodgers: Do it right? That's basically their guidance. Do it right.
J. Aughenbaugh: Then we are going to get to a controversy. The transmission infrastructure program, this is known as TIP. In 2009 during the Obama administration.
N. Rodgers: Right after the Great Recession.
J. Aughenbaugh: Right after the Great Recession 2007-2009, Congress passed the American Recovery and Reinvestment Act. Section 402 of that law amended the Hoover Power Plant Act to give WAPA authority to borrow up to $3.25 billion from the United States Treasury to pursue transmission projects that would deliver renewable generation into the electric transmission grid for the Western United States.
N. Rodgers: 3.25 billion.
J. Aughenbaugh: That seems like a large amount of money. WAPA created TIP. Only two projects have been completed under this authority. Several are still in development, Nia. But TIP has been pointed to as an example of wasteful government spending because it took so long.
N. Rodgers: For any part of the projects to come online.
J. Aughenbaugh: Come online.
N. Rodgers: Yeah. We should be fair and say, it always takes a little while for projects to come online, but this has been egregious. We're now talking 14, 15 years on. Come on now.
J. Aughenbaugh: It's focused on renewables.
N. Rodgers: I imagine probably by the time we're finished recording this, Elon Musk will have cut it out of the government.
J. Aughenbaugh: It would not shock me, particularly because again, it focuses on renewables.
N. Rodgers: Which is something that this particular administration is not particularly interested in.
J. Aughenbaugh: Correct.
N. Rodgers: Can we talk about the other two controversies?
J. Aughenbaugh: Sure.
N. Rodgers: Arizona has a lot of local reporters. That's a good thing because Arizona local reporters found a couple of things that they were very crabby about WAPA about, and we need to be honest and bring them up. One is that for a while. Remember how Aghie said they're not supposed to make money?
J. Aughenbaugh: Yes.
N. Rodgers: They were doing this thing called double accounting, which is if you wonder if that sounds sketchy, it does, because it's illegal. You're not supposed to keep two sets of books. You're not supposed to do double accounting.
J. Aughenbaugh: Double accounting is not recommended as best practice.
N. Rodgers: By anybody for anything.
J. Aughenbaugh: In accounting programs, and any college or university in the United States.
N. Rodgers: What ended up happening was they were selling at certain rates. But even when the cost of things would drop just naturally with the economy, they would continue to sell at those rates. They developed a slush fuss, a pile of money that ended up getting spent on stuff like personal camping gear and rifle sites. When that got reported as what they had bought, Arizona reporters were like, wait a minute. How is this part of WAPA? Well, it was going to WAPA employees.
J. Aughenbaugh: Yes.
N. Rodgers: There is some question about the oversight of WAPA's moneymaking/not moneymaking?
J. Aughenbaugh: Yeah, again, this gets back at the fact that if Congress was doing its job, Congress would be asking WAPA.
N. Rodgers: How'd you spend the money?
J. Aughenbaugh: How did you spend the money?
N. Rodgers: What does this camping gear have to do with transmission lines across the West?
J. Aughenbaugh: Why is it that WAPA employees are taking so many trips?
N. Rodgers: Up to the mountains. You're not the transmission lines experts. You run Excel documents for WAPA. Why are you?
J. Aughenbaugh: The second controversy. Again, sometimes I almost want to ask government bureaucrats.
N. Rodgers: What were you thinking?
J. Aughenbaugh: What were you thinking? Post 911. One of the big controversies post 911 was that for months on the Department of Energy's website available to anybody in the world, was a full map of the US electrical grid.
N. Rodgers: All the installations that WAPA controlled?
J. Aughenbaugh: That's right.
N. Rodgers: Sorry, on WAPA's website, all the installations they controlled which means that people walked up and broke into things.
N. Rodgers: The security level was practically non-existence.
J. Aughenbaugh: Again, if you want to go ahead and give an invitation to terrorists to go ahead and attack your country.
N. Rodgers: Or chucklehead.
J. Aughenbaugh: Or chucklehead.
N. Rodgers: Don't forget chucklehead because a lot of it was chuckleheads, "I wonder what happens if I do this."
J. Aughenbaugh: Yes. You don't even have to be a member of a fear creating organization. You could just be, excuse the expression, a dumb ass. A phrase that I used to hear from my uncles all the time, Aughie, don't be a dumb blah blah blah blah. I'll be like, I'm not entirely, but I was being a chucklehead. I was being an idiot.
N. Rodgers: Some of it was to see if people could.
J. Aughenbaugh: But because this was on the website, you might as well just go ahead and paint a big old bull's eye for anybody who wanted to go ahead. This is a legitimate security concern because if they go ahead and take out a transmission plant, it could have a ripple effect because that's how electrical grids work.
N. Rodgers: If you take out a transmission, you might overpower the next transmission, which will take that out, and so on and so forth until you get down the line where somebody can turn it off and stop it from continuing. They have breakers into the systems and stuff like that, but part of what was happening at least back in the day, was that they didn't even have cameras. They didn't have anything to monitor who was around stuff. One of their security agents did one of those whistle blower things, went to the Arizona reporters. See, earlier note, Arizona's not letting go of this. Part of that is because Arizona depends heavily on power to make Arizona livable because in the heat of the summer, Arizona is not livable without power.
J. Aughenbaugh: That's right.
N. Rodgers: It isn't. He went to the reporters and said, "You know you could just walk in there and break in." I think some reporter tried it. I don't remember if that's accurate or not, but it was alarming. Let's put it that way. They have worked on some of it, but some of it still remains a concern. Now, let us also be honest and say, with 17,000 miles of lines, I don't know how you would secure all of it, anyway. There is that.
J. Aughenbaugh: To that point, Nia, also recognize, WAPA has 51 duty stations. They have core offices in, what? Six different states. Now, five different states because the headquarters is in Lakewood, Colorado. But you have regional offices in Phoenix, Loveland, Colorado, Folsom, Colorado, or California, Billings, Montana, and then one in Salt Lake.
N. Rodgers: We probably should have mentioned they have about 1,000 employees, they're not they're not a huge agency.
J. Aughenbaugh: It's really in some ways, very difficult to go ahead and provide meaningful oversight. With all the transmission lines and all the plants, providing, if you will, meaningful security becomes almost impossible.
N. Rodgers: But they could probably do better than they've been doing.
J. Aughenbaugh: Yes. Including the fact that it should not have taken months if not years to go ahead and remove maps.
N. Rodgers: Hey, if you want to do bad things, go here.
J. Aughenbaugh: But nevertheless, this is a really good example of an agency that was designed to go ahead and dress a private market, if you will, void.
N. Rodgers: Gap.
J. Aughenbaugh: Yeah, gap.
N. Rodgers: I think it's also one of the few agencies where the mission of it is very clear. If listeners listen to podcasts a couple of weeks ago, we talked about the Voice of America. The Voice of America's mission is to convert you to American capitalism. It has a pretty clear mission. But the ATF's mission, which we talked about before that is less clear. Try not to let things blow up, catch fire or be bad. That's their mission. It's easier for an agency to do a job when it's clear what the goal of the job is.
J. Aughenbaugh: That's right.
N. Rodgers: I think WAPA achieves that in that sense. They actually have a pretty good understanding of what the goal here is, and so when they fail to deliver or when they deliver in stupid ways, I think we can forgive some of that, and I think some of that they've learned from or they should be learning from.
J. Aughenbaugh: Because institutions are like, basically organisms. Hopefully, they learn and they adapt.
N. Rodgers: But it would be fine with me if they decided that they wanted to be a moneymaking institution as long as that money went back into the agency. Or went into some other federal agency where it served people. If you say, we're going to make money off of this, but we are going to give it to these 15 states to their health and human services departments so that it helps relieve housing difficulties or whatever. Something like that, then I'd be like, okay, well, then it's okay to make money from that. But just mysteriously making money and then buying camping gear is probably that's the thing people point to and say, that's a problem in the federal government, and they're right. They're right to be upset by that. They're right to say, wait a minute. Why am I paying this power bill this high if you're going to go off with, you know.
J. Aughenbaugh: I want to take a hunting trip to the Grand Canyon.
N. Rodgers: There's legitimate reasons for people to be aggravated, and there's legitimate reasons to have local journalism because local journalism helps keep these agencies who Aughie didn't know about and I only found out about relatively recently, helps keep them on the straight and narrow. We need to have both the whistle blower guy, good for him, but he's like, Hey, security is not so great here. Also people saying, wait, you're spending a million on what? Where are you getting that money?
J. Aughenbaugh: Because for many local journalists, they're just being curious. They're not out to go.
N. Rodgers: Well, somebody says, "Why is my power bill so high?" They say, "Why is your power bill so high?"
J. Aughenbaugh: So who produces the energy? What do they charge? Under what authority can they charge this? Who provides it, etc., like, Hey, wait a minute, here. They have two sets of books. That seems sketchy.
N. Rodgers: Once a reporter thinks something seems sketchy, they've got a bone in their teeth, and they're going for it as far as they can go.
J. Aughenbaugh: That's like a hound dog with a fresh scent, you're not gonna get them to stop tracking that for miles. Anyways, thank you, Nia.
N. Rodgers: Thank you, Aughie.
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