Date Issued
Report Number
2026-17613
Report Type
Audit
Description
The Tennessee Valley Authority’s (TVA) demand response (DR) programs offer incentives for electric utility customers to reduce their energy use during peak demand, which reduces the need for generation and helps support the reliability of the local electric grid. TVA entered into a DR power supply agreement with a company on January 1, 2021, to administer a TVA DR program. Our audit objective was to determine if the company complied with the payment and DR performance provisions of the contract. Our audit included approximately $11.7 million in costs paid from January 1, 2021, through December 31, 2025, under the contract.
In summary, we determined the company overbilled TVA $675,096. Specifically, the company overbilled $665,863 in costs due to (1) miscalculation of capacity payments for DR program events, (2) lack of reductions in nominated capacity amounts to address prior underperformance, and (3) miscalculation of a capacity performance adjustment. In addition, the company overbilled $9,233 in energy costs due to incorrect energy payments and incorrect energy cost reductions for event underperformance.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0