Review of Calvert City Coal Terminal

We reviewed control activities and the scale certification process applicable to TVA coal shipments at Calvert City Terminal (CCT). We found the terminal had controls and processes in place for the receiving, blending, weighing, and loading of the coal it handles for TVA. The terminal also appeared to have adhered to the scale certification requirements prescribed by the TVA contract. However, we:Identified one barge shipment where terminal documentation showed the barge being sent to the TVA Colbert Fossil Plant (COF). According to TVA Fuel Supply (FS) personnel, the barge sank in August 2006, en route to COF. As of August10, 2007, FS had not recovered the loss.Found discrepancies with some barge and train shipments that apparently resulted from keying errors on the part of TVA and CCT personnel. This included six train shipments recorded in FuelWorx as received at the wrong terminal. Management generally agreed with our findings and recommendations and is taking or plans to take corrective action.