Federal Reports

The Tennessee Valley Authority (TVA) operates four coal plants, which are required to comply with the Clean Air Act (CAA).  In 2023, changes to the CAA required the reduction of nitrogen oxide (NOx) from power plants.  To comply with the changes, TVA made the decision to install Selective Catalytic Reduction (SCR) systems at TVA’s Shawnee Fossil Plant (SHF) for Units 2, 3, 7, and 8 and entered into a $59.5 million contract for the design and delivery of SCR systems (SCR systems are emission control technology designed to remove NOx from flue gases emitted by combustion sources).  The contract included performance guarantees for meeting metrics such as NOx emissions, and system pressure drop.  Due to the importance of complying with environmental regulations and the cost of the project, we initiated an evaluation to determine whether performance guarantees were met for the SHF SCR project. 

We determined metrics associated with performance guarantees for the SHF SCR project were met.  However, TVA project support personnel performed the SCR tuning, which was a defined contractor responsibility.  This resulted in unnecessary risk and additional cost to TVA.

The Office of the Inspector General performed an audit of the Tennessee Valley Authority’s (TVA) Unmanned Aircraft Systems (UAS) Program due to the increased use of unmanned aircraft in TVA operations.  Our audit objectives were to determine if TVA's (1) UAS Program was in compliance with applicable federal requirements and (2) use of unmanned aircraft was in compliance with applicable TVA policies.  Our audit scope included TVA's use of unmanned aircraft from January 1, 2024, through December 31, 2024.

In general, we determined TVA's (1) UAS Program complied with applicable federal requirements and (2) use of unmanned aircraft complied with applicable TVA policies.  However, we determined 2 of 64 pilots did not have the remote pilot certificate required to operate UAS.  We made one recommendation to management to address verification of remote pilot certificates.

The Tennessee Valley Authority (TVA) Standard Programs and Processes 04.050, Investment Recovery, defines surplus material as material or equipment considered excess at a site that cannot be sold back to the original supplier or manufacturer.  Before items are considered surplus, TVA personnel are responsible for determining if the materials have a forecasted usage at the site or within the TVA fleet within 3 years.  From October 1, 2020, through March 31, 2025, TVA transferred approximately 370,000 inventory items to surplus with a book value of $34.7 million.  TVA’s Investment Recovery group is responsible for managing surplus inventory in a manner that recovers as much of TVA’s original capital investment as possible. 

Due to the significant investment TVA makes in inventory, we conducted an audit of TVA’s surplus inventory.  Our objective was to determine if TVA surplus inventory was managed in accordance with TVA policies and procedures.  The scope of this audit was inventory items transferred to surplus from October 1, 2020, through March 31, 2025. 

We determined, in general, TVA managed its surplus inventory in accordance with policies and procedures; however, we identified two opportunities for improvement. We found TVA policies and procedures could be improved by clearly defining how to determine forecasted usage across TVA. We also noted opportunities to improve the management of surplus inventory related to documentation completion.