The U.S. Department of Energy operates four regional power marketing administrations (PMAs) -- the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). These agencies all operate on the principle of selling wholesale electric power with preference given to publicly or cooperatively owned utilities "at the lowest possible rates to consumers consistent with sound business practices" under the Flood Control Act of 1944 (16 U.S.C. ?825s). Maintaining competitive rates sufficient to cover operating costs and repay the federal investment in the hydropower dams and transmission systems amid drought, legal challenges, and customer pressure for cost reductions are some of the challenges faced by these agencies, and issues tied to these challenges may come before Congress.

Reviews the ratesetting practices of DoE's power marketing administrations (PMAs) and compares them with those of other utilities. Specifically, it determines: (1) how the PMAs set their rates to recover costs; (2) how the PMAs' ratesetting practices compare to those of investor-owned and publicly owned utilities; and (3) the impact of the PMAs' ability to defer repayment of portions of their debt on their future competitiveness. Collected key data and analyzing methodologies at the 4 PMAs, DoE, and the Fed. Energy Regulatory Comm. as well as 3 investor-owned utilities (IOU) and 4 publicly owned generating utilities (POG). Charts and tables.