Federal power utility under multiple investigations for waste, abuse and fraud

Posted at 5:57 PM, Dec 08, 2016
and last updated 2016-12-09 00:44:52-05

A regional power utility that serves much of the western United States is under multiple federal investigations for possible fraud, waste and abuse, according to records obtained by ABC15.

The Western Area Power Administration, or WAPA, is a division of the United States Department of Energy that sells power to wholesale electric utilities, municipalities, tribes and other agencies in 15 western states, including Arizona, that serve millions of people. 

Multiple whistleblowers within WAPA have alleged widespread misconduct and inappropriate spending within the agency, ABC15 has learned. Arizona’s Senators Jeff Flake and John McCain have also called for an investigation.

The House Committee on Oversight and Government Reform has started requesting documents and conducting interviews, records show. Committee leaders said they are investigating financial and facility mismanagement based on allegations made by several whistleblowers. 

There is also a criminal investigation underway by the Department of Energy Officer of Inspector General .

“For over a year, Senator Flake and I have been conducting rigorous oversight over the agency’s corrupt practices, which the Department of Energy Inspector General confirmed in August resulted in widespread waste and mismanagement,” said McCain in a statement to ABC15.

ABC15 has learned that whistleblowers told federal investigations about outlandish spending within WAPA, especially involving government credit cards. A source said the fraud and waste reached millions of dollars in recent years.

McCain and Flake are also concerned about WAPA possibly overcharging customers for power. The agency, they say, is too opaque and little is known about how WAPA determines how much to charge for its power.

Sources tell ABC15 that the amount of money currently held by WAPA exceeds $1 billion. That’s concerning, says Flake, because the federal utility is a government entity that’s supposed to deliver power to consumers at low rates.

“The expenditures are suspect, and they keep rolling money over year to year,” Flake said in an interview. “At some point, you have to have the consumers benefit. It doesn’t seem that they are.”

Flake and McCain introduced legislation as part of a larger energy bill that is currently advancing that would require WAPA to disclose more about how much it charges for its power.

In response, WAPA sent ABC15 the following statement.

“The Western Area Power Administration is continuing to cooperate with the investigation. We are committed to being good stewards of our resources. This includes improving processes and correcting deficiencies through our rigorous self-check program. Our employees work tirelessly to meet the energy and transmission needs of our customers in a safe, secure, reliable and cost-effective way.”

However, in a November 8 letter, congressional leaders had criticized WAPA officials for a lack of cooperation with their investigation and a previous request for documents.

“To date, WAPA has not produced a single document in response to (an October) request,” the letter states. “Making matters worse, the agency has been unwilling to engage with the committee in a good faith effort to understand and accommodate our respective concerns in this case.”

Contact ABC15 Investigator Dave Biscobing at