The Tennessee Valley Authority’s (TVA) Enterprise Planning organization engages in long-term generation and capacity planning to support TVA’s mission of providing low-cost, reliable electricity. TVA’s capacity plan is designed to ensure resource adequacy while working to minimize cost to customers and develop a long-term strategy for the TVA power system. Long-term generation planning allows for the optimal use of available resources to meet the future energy needs across TVA’s service area, factoring in operating area and system constraints. Collectively, the capacity and generation plans are referred to as the Power Supply Plan. Due to the importance of power supply planning to TVA’s fuel cost forecasting and operational decision-making, we conducted an evaluation to determine whether TVA is using accurate inputs to develop the Power Supply Plan. We tested seven inputs to the Power Supply Plan, including two key inputs, and determined six were inaccurate. Specifically, we found errors in the (1) fuel costs, (2) load forecast, (3) Southeastern Power Administration hydro generation forecast, (4) solar purchased power agreement contract terms, (5) coal ancillary services, and (6) demand response capacities and costs. We also noted an opportunity for improvement related to the level of detail contained in the documentation available to guide the load forecasting process. Due to the complex nature of TVA’s power supply planning models and forecasting methodologies, we were unable to determine the overall impact of the errors identified on the Power Supply Plan. While the impacts we were able to quantify were low, having errors in six of seven inputs we reviewed indicates there could be risk to the integrity of information being provided to and by TVA’s Power Supply Plan. Additionally, various personnel raised concerns regarding the reliability of information being provided by TVA’s Power Supply Plan, specifically in the burn forecast.
Monday, October 24, 2022
Agency Reviewed / Investigated:
Submitting OIG-Specific Report Number:
Type of Report:
Inspection / Evaluation
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