Federal Reports

On Monday December 22, 2008, the ash containment area at the Kingston Fossil Plant failed. Approximately 5.4 million cubic yards of fly ash and bottom ash were released onto land and adjacent waterways. As part of the OIG's ongoing commitment to provide oversight of the Kingston ash spill cleanup, we reviewed TVA's non-time-critical Kingston Ash Recovery Project activities.The objectives of this review were to determine (1) the overall status of the non-time-critical phase of the Kingston Ash Recovery Project and (2) if TVA is meeting the schedule for non-time-critical activities. During our review, we found that TVA has made significant progress in the non-time-critical phase of the Kingston Ash Recovery Project. Specifically, TVA has recently completed the following activities: (1) removing ash from the North Embayment, (2) buttressing of Dike C, (3) transferring a portion of a nearby ball field to the Kingston Fossil Plant, and (4) replacing the skimmer wall in the intake channel. In addition, TVA has ongoing non-time-critical activities that include: excavating ash from the Middle Embayment, constructing the Perimeter Wall Stabilization around the on-site disposal areas, disposing of ash on-site, studying the effects of residual ash on the river system, and creating a master plan for park and recreation areas. While TVA is making progress in the completion of non-time-critical activities, we found that five of nine activities reviewed did not meet the scheduled completion date. If the project continues late completion of activities, there is an increased risk that the overall project completion date of 2015, disclosed in the company's financial statements, could be delayed.We recommend TVA's Senior Vice President, Generation Construction, evaluate the current schedule to determine if the identified delays have caused overall schedule slippage. If it is determined that the overall schedule will be delayed beyond the date disclosed in the footnotes to TVA's financial statements, then the disclosure should be updated. TVA management agreed with our recommendation and has taken actions to address it.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we audited Westinghouse Electric Company LLC's billed and estimated remaining material escalation costs under Contract No. 65717. In summary, we determined Westinghouse overbilled a net $26,917 in escalation costs and overestimated the remaining material escalation costs by $137,408. In addition, we identified compensation terms in the contract that need to be clarified to reduce the potential for billing discrepancies.Westinghouse agreed with our findings that escalation costs were overbilled and overestimated. Accordingly, TVA management should ensure (1) TVA recovers $26,917 in overbilled escalation, and (2) the remaining escalation costs are billed in accordance with the contract. TVA and Westinghouse agreed the compensation terms need to be clarified, and the contract is being revised.May 2, 2012 - Review of Energy Efficiency and Demand Response - 2011-14061 We initiated a review of the effectiveness of Tennessee Valley Authority's (TVA) Energy Efficiency and Demand Response (EEDR) organization. We conducted this review because energy efficiency and demand reduction initiatives are important components of TVA's plan to meet future power needs in its service territory. The objectives of this review were to determine (1) how TVA measures the effectiveness of its energy efficiency and demand response programs and (2) if its goals in these areas are being met. We found EEDR (1) has contracted with an independent consultant to provide evaluation, measurement, and verification services and (2) achieved its planned energy efficiency and demand reduction for 2011 and only missed its planned demand reduction in 2009 and 2010 by 2 MW and 16 MW, respectively. The Green Power Switch program came close to achieving its goals for 2009 and 2010; however, it fell significantly short of its goal in 2011. This report was issued for informational purposes only.