Review of Fossil Fuel Inventory

Tennessee Valley Authority's (TVA) fossil fleet consists of 56 operating units at 11 fossil plants in the Tennessee Valley. Through the third quarter of fiscal year (FY) 2010, TVA purchased 25.2 million tons of coal totaling $1.36 billion and burned 25.7 million tons totaling $1.50 billion. TVA's fuel inventory as of June 30, 2010, was $518,658,383. We assessed the operating effectiveness of the controls over the receipt and burning of coal at the fossil plants, including inventory adjustments. Specifically, we determined:The variance reports are generated using information in the Daily Coal Report (DCR). However, the vendor name listed in the DCR does not consistently represent the respective coal company, coal mine, or loading point, which could prevent the identification of significant issues.Variance investigations are not always coordinated between Coal and Gas Services (CGS) and plant personnel, which could impact the efficiency of the investigations.Material tests, which ensure the accuracy of the TVA scales, are not being conducted on all receipt and burn scales on an annual basis at the 11 TVA fossil plants. According to TVA personnel, Problem Evaluation Reports (PERs) have been written at Allen and Gallatin fossil plants for infrastructure deficiencies preventing material testing.Documentation is not consistently maintained for the daily belt scale checks, weekly belt scale calibrations, and material flow checks. Therefore, we were unable to determine whether these checks were consistently conducted.No formal process exists for conducting investigations on inventory adjustments that exceed the tolerable limit. According to TVA management, the Fossil Power Group (FPG) began utilizing Maximo to document and track PERs for inventory adjustment investigations in FY 2011. Summary Only