Calvert City Coal Terminal

We performed an inspection to determine why Tennessee Valley Authority (TVA) has incurred significant coal adjustments stemming from TVA's receipt of coal through Calvert City Terminal (CC). TVA has contracted with CC through 2008 for transloading, stockpiling, and blending coal. We determined that the inventory adjustments on coal received through CC may be a result of several issues, including (1) differences in CC and TVA Fuel Management System recorded weights, (2) CC's rail unloader scale and barge unloader scale not being certified, (3) missing rail cars included in inventory as received because they were still listed on the manifest, and (4) stockpiles continuing to have coal removed and added after lines are drawn for inventory flyovers.However, we also noted CC is now requiring scale certification, and the results of the coal inventory flyovers were within the acceptable margin of error. Accordingly, the report was issued to management for informational purposes, and management has requested a follow-up review one year after scale certification has occurred. Summary Only