Data Used to Calculate Fuel Cost Adjustments

We evaluated TVA’s fuel cost adjustment (FCA) calculations to determine whether TVA was using the appropriate data to calculate the FCA. We determined TVA was not using the appropriate sales data to calculate the FCA due to (1) inaccurate unbilled energy sales, (2) the misclassification of sales made to small direct-served customers, and (3) inaccurate hourly energy loads. In addition to the errors identified, we also determined the FCA process could be improved to reduce the risk of errors in the FCA. Specifically, the FCA process is reliant on many hand offs, manual calculations, queries, and complex spreadsheets. Further heightening the risk of error, we found TVA’s FCA process was not documented.