TVA's Interruptible Pricing Products

The Tennessee Valley Authority's (TVA) Interruptible Power (IP) program implemented new products in October 2015 as part of the product redesign of TVA's demand response portfolio. We initiated this audit in response to concerns forwarded to our office regarding (1) the amount of credits provided through TVA's interruptible products and (2) whether or not these products were a cost effective way for TVA to obtain power. Our audit objective was to determine if the monetary value obtained by TVA during fiscal years 2016 and 2017 was more than the cost of providing these interruptible pricing products to customers. Our audit included interruptible product credits issued and other financial data related to interruption events for participating commercial and industrial customers from October 1, 2015, through March 31, 2017, which totaled $78.5 million. In summary, we found the monetary value obtained by TVA during fiscal years 2016 and 2017 was more than the cost of providing the interruptible pricing products introduced in October 2015 to participating commercial and industrial customers. However, we also found documentation related to the interruptible valuation is not maintained in a central location. We recommended TVA's Vice President, Pricing and Contracts, maintain all supporting documentation related to the annual interruptible valuation in a central location. TVA management agreed with the audit findings and recommendation in this report and plans to take corrective action.(Summary Only)