Audit Report: DOE-OIG-18-47

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September 10, 2018

Southwestern Power Administration’s Asset Protection

The Department of Energy’s Southwestern Power Administration (Southwestern) markets and delivers power produced from Federal water projects at wholesale rates.  Southwestern operates and maintains 1,380 miles of transmission lines used to transmit power generated to 6 states.  In addition, Southwestern maintains infrastructure that includes electrical substations, transmission lines, towers, and power system control centers.  Southwestern is subject to requirements established by the Department and the North American Electric Reliability Corporation to protect its mission critical and related bulk electric system assets by conducting risk assessments of its most significant assets.

A 2003 prior audit conducted by the Office of Inspector General noted that Southwestern had not performed required risk assessments for its critical assets.  Additionally, in 2010, another Office of Inspector General report found that Southwestern had not updated required critical asset vulnerability and risk assessments.  Since 2010, Southwestern has had nine security incidents at its bulk electric system assets that have caused approximately $100,000 in copper and equipment theft and related damage to Federal property.  Given the significance of this subject matter, we initiated this audit to determine whether Southwestern was properly protecting its mission critical and related bulk electric system assets.  

We found that Southwestern had not always taken sufficient measures available to ensure that its mission critical and related bulk electric system assets were properly protected.  Additionally, we noted that the lack of updated comprehensive risk assessments had persisted since we first reported the issue in October 2010. 

To address the issues identified in our report, we made several recommendations to the Administrator for Southwestern Power Administration.  Management concurred with our recommendations and indicated that corrective actions had been initiated or were planned to address the issues identified in this report.

Topic: Management & Administration