Federal Reports

TVA's challenges are great with the need for financial flexibility to ensure the TVA mission of delivering low cost power is achieved. The current debt ceiling could limit TVA's financial flexibility and require TVA to seek higher cost financing options or require significant rate increases that could adversely affect the economic development of the Tennessee Valley region. Although TVA is in the process of evaluating options, TVA's position is that a financial metric (e.g., something similar to the debt service coverage ratio), rather than a debt ceiling stated in terms of an arbitrary dollar amount, would provide control of TVA's borrowing authority that is tied to TVA's ability to pay outstanding debt, similar to investor owned utilities, while still providing Congress with oversight and control.The Inspector General agrees with TVA management in their efforts to maintain maximum financial flexibility, including (1) the adoption of sound financial principles, (2) ensuring multiple options and strategies are pursued to achieve the most economical approach, and (3) seeking to ensure that debt remains a viable option in future financing decisions.TVA should be able to support additional debt to help meet energy demands as long as the TVA Board maintains its ratemaking authority, TVA maintains its service territory and customer base, and TVA uses the debt proceeds to successfully build generating capacity.

The objective of this review was to determine if the fire protection systems were adequately maintained and mitigating actions are taken to minimize the impacts of fires at TVA fossil plants. During our review, we identified a number of issues related to fire protection at TVA fossil plants. We found numerous impairments exist with fire protection systems at a number of sites, and most systems are not returned to service in a timely manner. During calendar year 2010, there were 30 impairments at Cumberland, 10 at Gallatin, 6 at John Sevier, 20 at Paradise, and 49 at Shawnee. The impairments in 2010 that have since been closed lasted between 40 and 158 days, depending on the site. We also found some fire brigade members have concerns about fire response preparedness. These concerns included poor fitting equipment, the condition of fire trucks, an inadequate staging area, bad communication equipment, not enough training, and insufficient staffing. Additionally, we found that lessons learned from fire events were not being consistently communicated across the fleet. Lessons learned were shared in different ways and were not always shared with fire brigade members. We also identified opportunities for improvement with fire prevention. During our review, we observed areas of significant coal dust accumulation and evidence of smoking at several sites. Lastly, we found instances of noncompliance with TVA policy regarding testing, inspection, and maintenance of fire protection equipment, pre-fire plans, and use of fire equipment. We identified some systems that were not inspected and tested as required, pre-fire plans were in need of updating, and fire equipment was being misused.We recommended the Senior Vice President, Fossil Generation 1) take immediate steps to restore all impaired fire protection systems to service and determine if additional personnel or resources are needed to expedite repairs of fire protection systems in the future; 2) determine (a) the equipment needs of fire brigade members, including protective equipment and emergency communication devices, and take steps to provide that equipment, (b) what additional training is needed for fire brigade members and take steps to provide that training, and (c) if increased staffing is warranted for fire brigades; (3) create and implement a formal process for capturing and sharing lessons learned from fire events across the fleet, and capture all fire incidents and report them in a consistent manner in the OIC; (4) perform regular coal washdowns at all plants to minimize coal dust accumulations, and strictly enforce TVA's "No Smoking" policy; and (5) evaluate whether additional personnel are needed to properly inspect, test, and maintain fire protection equipment, update pre-fire plans to reflect current conditions, and reinforce that fire equipment is only to be used by fire brigade personnel. TVA management agreed with the recommendations.

Incident Management