Heat Rate Input Calculations

The Tennessee Valley Authority estimates the dispatch costs for coal and gas on a combination of elements including fuel pricing, physical operating characteristics, estimates of variable operating and maintenance costs, and other variables. Since heat rates are one of the primary physical characteristics used in the calculation of dispatch costs, we performed an evaluation to determine if inputs used in the development of heat rate curves were calculated accurately. The scope of our review was limited to the July 2017 heat rate updates for coal and combined cycle (CC) plants.We determined some of the inputs used for the July 2017 heat rate curves were not calculated correctly. Specifically, we determined the hourly heat rates were incorrect for four of the five CC plants. We did not determine the impact of any inaccurate calculations. We were unable to verify the accuracy of the data used to calculate coal hourly reference heat rates due to inconsistencies in system settings or data not being available. However, we did determine the hourly reference heat rates were not calculated for 6 hours at one of the eight coal plants.