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Fort Loudoun Hydro Unit Two Hydro Life Extension Project

Report Information

Date Issued
Report Number
2026-17602
Report Type
Inspection / Evaluation
Description
The Tennessee Valley Authority’s (TVA) energy portfolio includes 29 hydroelectric plants, consisting of 109 generating units.  The hydro fleet, with a total capacity of 3,783 megawatts, supports TVA’s mission of providing affordable and reliable electricity to the Tennessee Valley while also enabling TVA to manage the river system.  TVA’s program to extend the life of the hydro fleet, known as the Hydro Life Extension (HLE) program, outlined a five-year, $800 million plan dedicated to rebuilding hydro units.  As of 2022, there were 19 HLE projects, including the project for Fort Loudoun Hydro (FLH) Unit 2.  The life extension project for FLH Unit 2 was originally initiated in November 2017 to replace or refurbish major equipment and components to extend the service life of the unit for the next 40 years.  Our evaluation objective was to determine if the project followed cost and quality management guidelines. Our evaluation of the FLH Unit 2 project identified that some cost and quality management guidelines were not followed. Specifically, TVA did not (1) effectively track rework, which prevented recovery of costs or (2) take corrective action to address identified issues related to welding.  In addition, we found the TVA PM lacked access to project records, which could have impacted the PM’s ability to manage the project. 
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0

Recommendations

We recommend the Vice President, Generation Projects and Outage Management, reinforce comprehensive cost tracking to ensure appropriate cost control.

We recommend the Vice President, Generation Projects and Outage Management, evaluate and determine if TVA can recover additional costs due to rework implications.

We recommend the Vice President, Generation Projects and Outage Management, take timely action to address contractor performance issues in accordance with the contract on future hydro unit repairs.

We recommend the Vice President, Generation Projects and Outage Management, continue with document repository implementation and take action to develop and implement a formal PM turnover process.