Sec. O'Leary says "strategic alignment" is trimming the budget;
GAO remains unsure whether Department is "truly committed."
Department of Energy (DOE) officials and like-minded politicians joined to defend the agency against Senate and House bills that would dismantle the department (em and its $17-billion annual price tag.
On September 4, the Senate Committee on Energy and Natural Resources conducted hearings on S. 1678, The Department of Energy Abolishment Act. Aspects of the legislation include privatizing the federal Power Marketing Administrations (PMAs) and selling the Naval Petroleum Reserves.
Rep. Todd Tiahrt (R-KS) said S. 1678 and its companion bill, H.R. 1993, were developed to respond to three facts: 1) DOE has strayed from its energy oversight mission, 2) DOE services are inefficient, and 3) with an annual cost of $17 billion, Congress could not realign or reinvent the agency, only abolish it.
Citing Vice President Al Gore's National Performance Review, Tiahrt noted that DOE's environmental management program could waste more than $70 billion over 30 years.
One witness pointed out that DOE carries 20,000 employees and 150,000 contract workers. Its budget has increased 253 percent over the amount set in 1977, the year the agency was created by President Jimmy Carter.
In defense of DOE, energy secretary Hazel R. O'Leary said its Strategic Alignment and Downsizing Initiative and privatization would reduce the department's budget by $10.5 billion over five years. She said legislative "solutions" to abolish the agency wouldn't, in fact, do that. "The self-styled 'abolitionists' who are seeking to slay Cabinet agencies tend to paper over a fundamental reality of their plans: that the overwhelming majority of programs of the Department of Energy would continue."
Backing up O'Leary's statements, Sen. J. Bennett Johnston (D-LA) protested that the bill scatters DOE's energy missions "to the four winds," giving responsibilities to at least five other agencies. The bill also would create a new commission and four defense-related positions to replace two.
"This is downsizing?" Bennett asked. "What the department is already doing through its Strategic Alignment Initiative will save the taxpayers a half-billion more dollars than all the shuffling of programs and bureaucrats. ... S. 1678 only achieves its higher claimed savings by selling off an extra $6 billion in assets. Well, if you want to start selling off the Strategic Petroleum Reserve, you can make any [legislative] bill have a great bottom line."
Charles B. Curtis, DOE deputy secretary, tallied up more cost savings from the Strategic Alignment and Downsizing Initiative: Personnel have been reduced by 1,300 in the past year; the number of administrators dropped by more than 300; contracted personnel have been cut by almost 10,000.
Curtis objected to the proposed transferring of nuclear waste cleanup to the Department of Defense (DOD): "Such a transfer would not improve but would, in fact, substantially detract from cleanup efficiency and productivity. . . . DOD has no significant expertise."
Victor S. Rezendes, a division director at the U.S. General Accounting Office, said that regardless of where they're managed, certain DOE issues need attention: contract reform, major acquisitions ($100-million-plus projects), environmental cleanup, and waste management.
"DOE has a long history of management problems," he said. "At the core of many of these problems is its weak oversight of more than 110,000 contractor employees, who perform nearly all of the department's work." Historically, contractors have worked without financial risk and got paid even for poor performance, he said. DOE is improving its practices, but "we are unsure whether the department is truly committed to fully implementing some of its own recommendations." As an example, in May 1996, the University of California's three laboratory contracts, worth about $3 billion, were extended without a competitive contracting process.
In the area of major acquisitions, GAO investigation shows that many large projects end prior to completion; many others show large cost overruns and delays. Some causes, however, appear to be constantly changing missions and incremental funding.
Other witnesses at the hearing included Caspar Weinberger, chairman of Forbes; Harold P. Smith, Jr., assistant to the secretary for atomic energy, U.S. Department of Defense; Shelby Brewer, president, S. Brewer Enterprises, Inc.; John W. Crawford of the Defense Nuclear Facilities Safety Board; and Carole Keeton Rylander, chairman of the Railroad Commission of Texas. t
Joseph Schuler is associate editor of Public Utilities Fortnightly. E-mail: email@example.com. (This report was compiled from written testimony submitted to the U.S. Senate Committee on Energy and Natural Resources.)
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