The Challenge of Managing Change

We are pleased to present our report for the period October 1, 2011, through March 31, 2012. The theme of our semiannual is "Managing Change," and our feature highlights the challenges with managing one particular change-the decision to increase the Tennessee Valley Authority's (TVA) reliance on nuclear energy.In TVA's lengthy history, one thing that has remained constant is change. This is especially true today as TVA works to realign its generation portfolio, which includes constructing new plants and idling others while keeping rates low and continuing high reliability. The utility industry has always faced the need to be nimble in adjusting to a volatile market. Today, however, the challenges for companies like TVA seem to come more quickly. The effective management of change has become even more critical. The role of the Office of the Inspector General (OIG) in this area is: (1) providing an objective, fact-based look at how well TVA is managing change; (2) identifying risk areas associated with managing change; and (3) providing recommendations to reduce risks.As you will see from the results of this semiannual period, the hard work of our OIG team has resulted in about $12 million in recoveries, fines/penalties, potential savings, questioned costs, or funds put to better use. We also identified other monetary losses resulting from a capital project that had no realized benefits. Finally, we have provided numerous recommendations to help TVA improve.