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Gallatin Ash Pond Complex Closure and Restoration

Report Information

Date Issued
Report Number
2025-17549
Report Type
Inspection / Evaluation
Description
In 2015, the Environmental Protection Agency issued the Coal Combustion Residuals (CCR) rule, which included requirements for addressing the risks from coal ash disposal.  The Tennessee Valley Authority (TVA) updated the program funding for its CCR management program in 2015 to address compliance with the CCR rule and in 2017 began developing a site-specific project to address coal ash at Gallatin Fossil Plant.  The Gallatin Ash Pond Complex Closure and Restoration (Gallatin Ash) project activities include (1) construction, operation, and closure of on-site lined landfills; (2) excavation and disposal of approximately 14 million cubic yards of CCR from Gallatin Fossil Plant; and (3) closure of the legacy ash site and coal yard, along with other site restoration work.  The project was first approved for implementation by the Project Review Board in February 2018 with a total estimated project cost of approximately $899 million.  As of July 2024, the total estimated project cost had increased to approximately $1.64 billion, an increase of approximately 82 percent.  Because of the costs associated with this project, we assessed the management of project costs.  We determined cost management for the Gallatin Ash project needed improvement related to the development of the project estimate and monitoring and tracking of project change requests (PCRs).  Specifically, the project estimate (1) did not include the complete scope of work and (2) was not developed using definitive costs as required.  As a result, the initial implementation project estimate was significantly understated.  Some PCRs submitted by contractors lacked adequate detail to determine if project cost increases were reasonable.  In addition, PCRs were not prepared for cost increases resulting from inaccurate project estimates. During the review, we also identified confidential contractor information that was shared by TVA project management with another contractor, creating reputational and liability risks for TVA.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View report on Oversight.gov

Recommendations

We recommend the Senior Vice President, Generation Projects and Fleet Services, establish steps to verify implementation estimates include the complete scope of work and are developed using definitive costs.

We recommend the Senior Vice President, Generation Projects and Fleet Services obtain additional support for the five project change requests with insufficient details to determine if the approval amounts should be revised.

We recommend the Senior Vice President, Generation Projects and Fleet Services take steps to reinforce the (1) need for adequate support before approving project change requests and (2) requirement for project change requests to document project estimate revisions.

We recommend that the Senior Vice President, Generation Projects and Fleet Services, in conjunction with the Office of the General Counsel, educate the appropriate individuals on the importance of not sharing confidential contractor information.