Ben R. Wagner was sworn in as Inspector General of the Tennessee Valley Authority (TVA) on June 6, 2022, following confirmation by the United States Senate.
Ben Wagner's professional career with TVA spanned 38 years of dedicated service. The majority of his career included 31 years of service to the Office of the Inspector General (OIG) at TVA. Prior to his retirement in 2017, he served in several senior executive positions in the TVA OIG including the role of Senior Advisor, Stakeholder Relations and Deputy Inspector General where he led the audits, evaluations, investigations, and administrative functions. In addition to these senior executive roles, Wagner held several leadership positions in the audits, evaluations, and administrative functions with the TVA OIG and was integral to the start-up of the office after it was established at TVA in 1985. In the seven years before joining the TVA OIG, Wagner also held various management and staff positions in TVA, primarily in the nuclear power program. Prior to that, he served as a state auditor for the State of Tennessee.
Wagner was born in New Mexico, but has resided in the Tennessee Valley region for the majority of his life, receiving his bachelor's degree in accounting from the University of Tennessee.
MESSAGE FROM THE INSPECTOR GENERAL BEN WAGNER
I am pleased to present our report for the period October 1, 2024, to March 31, 2025. In this semiannual period, our audit, evaluation, and investigative activities identified more than $75.1 million in questioned costs; funds put to better use; restitutions, recoveries, fees, and fines; and opportunities for the Tennessee Valley Authority (TVA) to improve its programs and operations. Below are highlights of our work this period:
- TVA spends about $4.7 billion annually in contracts primarily for labor and services and plant equipment to maintain the generation fleet and to continue the expansion of capacity with new generation facilities. The Office of the Inspector General (OIG) continues to aggressively audit these contracts to identify potential savings and recoveries to help TVA reduce costs. During this period, we completed two contract compliance audits which identified potential overbillings and cost savings opportunities of $3.2 million. We also completed four preaward examinations which identified $68.6 million of potential savings opportunities for TVA to negotiate.
- TVA plant personnel at gas and hydro plants work extensive overtime. We conducted two evaluations to assess TVA’s management of overtime. We found significant amounts of overtime worked at some plants with some personnel averaging more than 25 hours per week. Additionally, TVA may not be accurately capturing the effects of fatigue which could raise the risk of plant accidents.
- TVA has a goal of adding up to 10,000 megawatts (MW) of solar power by 2035. As of February 2024, TVA had entered into 31 solar power purchase agreements (PPAs), representing 3,440 MW of total nameplate capacity. However, the solar industry has experienced delays due to many factors such as the COVID-19 pandemic, supply chain issues, tariffs, higher interest rates, and inflation. As a result, TVA has canceled two of the PPAs and has renegotiated or is in the process of renegotiating contract terms for 18 of the PPAs. Our audit of the effect of the delays on the PPAs determined TVA’s price increases have ranged from 4.49 percent to 79.8 percent for the 10 completed PPA renegotiations.
- TVA is in the process of replacing the general ledger software system at a current cost estimate of $169 million and in-service date of November 2025. TVA has contracted with a number of consultants to assist in completing the project which had an original cost estimate of $67.1 million. Our review determined the cost increases were attributed to a number of factors, including increases in scope due to not identifying all the systems that share information with the general ledger system and the reporting needs of business units. We also found opportunities to improve project management oversight involving project scheduling and contractor management.
- We continue to evaluate TVA’s processes for assuring TVA meets power generation demands at the lowest system cost. An evaluation of TVA’s analysis of the power supply plan reliability identified some elements of the analysis process could impact its reliability, including significant variance in generation additions and retirements between plans and use of some outdated inputs. Additionally, we reviewed TVA’s fiscal year (FY) 2023 cost of service study to ensure cost allocations to various ratepayer classifications were performed in accordance with TVA policies and procedures. While the study was performed correctly, we identified some areas for improvement.
- Investigations completed, including those conducted jointly with other agencies, involved allegations such as employee misconduct, contractor fraud, environmental matters, and falsification of records. These investigations resulted in (1) two convictions related to fraud in the Paycheck Protection Program and for time and leave abuse, (2) an indictment related to bribery of an individual in two Alabama counties who administers funds to help households with their utility bills and expenses, (3) a pretrial diversion resulting in the resignation of a TVA senior employee, and (4) multiple cases involving criminal restitution and administrative and civil recoveries to TVA or other agencies/entities totaling almost $3.4 million.
TVA has strongly asserted the goal of leading efforts to unleash American energy so that it can support both national security and robust economic growth. With one of the most diverse public power systems and a leadership position in the development of new nuclear technologies, TVA has some tailwinds at its back as it seeks to accomplish these goals. With any bold initiative, however, there will be challenges. For example, the development of data centers and other technologies critical to the developing artificial intelligence economy will drive increased demand. Such demand will require TVA to quickly build new generation requiring one of the largest capital investment periods in TVA’s history, intense focus on regulatory requirements, and hiring an appropriately trained craft workforce. These hurdles are particularly true of new nuclear technology that is first in kind.
The TVA OIG is prepared to play a role in meeting TVA’s important national goals. In our oversight role, we will continue to identify ways to improve operations and mitigate risks; save or recover money; and prevent and detect fraud, waste, and abuse.
I am proud of our team’s work and commitment to stay in step with TVA as they forge their path to evolve into their next chapter for power generation.
Finally, I wanted to note four TVA Board Directors have recently transitioned off the Board since our last reporting period. I would like to thank former Directors Beth Harwell, Brian Noland, Michelle Moore, and Chair Joe Ritch for their service and engagement with our office.