City provides limited response to TVA report
A 45-day time to report to the Tennessee Valley Authority (TVA) on responses to a March 3 list of improvements and financial reporting requirements by the Holly Springs Utility Department has largely gone unanswered.
Although some financial reports have been completed, much of the requested information and recommended actions by TVA in the March 3 report has gone unanswered, according to a May 10 letter provided to the Mayor and Board of Aldermen from Melanie Farrell, TVA vice-president of external strategy and regulatory oversight.
Farrell said a verbal request made to the staff after the original 45-day window to execute improvements was not answered therefore a request made by Holly Springs Mayor Sharon Gipson for an extension of 30 more days to complete reporting was denied.
One of the top on the list of recommendations was to hire a qualified general manager. The position has been vacant three and half months.
Farrell said TVA will provide a list of resources to support HSUD in identifying resources for improving performance when HSUD hires a utility industry professional (general manager).
TVA wants to provide best practices related to the distribution system storm response and vegetation management when a general manager is hired, Farrell said in the May 10 update letter to the mayor and board of aldermen.
TVA will work with HSUD to identify any federal and state funds to improve the distribution system, Farrell said. Ward 2 alderman Andre Jones reached out to TVA to understand what federal or state funding might be available to help the customers of HSUD. TVA informed Jones that it would be hard to know what might be available until an assessment is completed that identified the most urgent needs of the utility.
“TVA’s regulatory assusrance staff is available to meet with the Holly Springs Mayor and Board of Alderman to discuss regulatory requirements of the City and HSUD,” Farrell said in a May 10 update. “TVA’s regulatory staff has not been asked by the
mayor or the board of alderman to discuss regulatory requirements.”
The Tennessee Valley Public Power Association (TVPPA), of which HSUD is a member, is offering to provide resources to HSUD to perform a full assessment of operations, engineering, maintenance and safety, Farrell said.
As such, TVPPA in proposals, did offer the City to help with an executive search to fill the general manager’s position and to conduct an assessment of HSUD’s system.
The City of Holly Springs Board of Aldermen has not yet made and passed a motion to complete either of these two recommended tasks, Farrell said.
TVA began a compliance assessment of HSUD March 14, following the March 3 meeting with the Mayor and Board of Aldermen. As part of the assessment TVA will evaluate:
TVA wants the assessment and reports from HSUD to include:
• timeliness and accuracy of financial reporting
• rate application
• billing practices
• disconnection policies
• and use of revenues.
Complaints from HSUD customers have decreased but remain significantly higher than in previous years, she said. Since April 20, TVA received 186 complaints from HSUD customers with over 90 percent of those related to power outages or power quality.
Farrell said TVA remains concerned about HSUD’s inability to meet financial reporting requirements and to provide all its customers safe and reliable power.
“We strongly urge Holly Springs to develop a plan to assess the areas of improvement in the (TVA) report so that they can best serve their customers,” Farrell said.
TVA provided the following summary of required financial reports received:
• the Fiscal Year 2022 Annual Report was received from HSUD on March 15, 2023. Due date was August 2022.
• the Fiscal Year 2023 monthly reports for July 2022 through February 2023 were received from HSUD March 31, 2023. The monthly reports are due 30 days after the end of each month. The March 2023 report has not been received.
• the External Audit reports for FY 2021 and 2022 have not been received. The 2021 report was due Oct. 31, 2021, and the 2022 report was due Oct. 31, 2022.
The current administration took office July 1, 2021.
Since the March 7, 2023 meeting with the City of Holly Springs in the board room, TVA said Mayor Sharon Gipson has not responded to any email correspondence from TVA’s regulatory leadership. In addition, HSUD continues to be challenged in providing financial updates and requested information, Farrell said.
Doug Peters, president and CEO of the Tennessee Valley Public Power Association, who has offered to assist HSUD in assessment and training, provided the following information for this report.
He said TVPPA has not had any communication from Holly Springs since providing the original proposal.
“We support all efforts to address any deficiencies that may exist in HSUD’s electric system, and will gladly lend expertise and guidance at the request of local management and policymakers,” Peters said. “We wish to support the longterm health of HSUD’s electric department, assist in bringing it into regulatory compliance, and ensure quality service to electric ratepayers.”
“TVPPA has recommended a two-phased approach to HSUD’s operational assessment. The resources for the first phase, a self-assessment, were provided at no cost to Holly Springs on March 30. Once complete, that selfassessment will inform the required next steps and allow TVPPA to provide a scope of work and anticipated cost for a full operational assessment.”
“We have not had any communication from Holly Springs since providing our original proposal. We welcome the opportunity to further discuss how TVPPA can assist Holly Springs in establishing operational excellence, customer trust, financial stability and other values our members uphold.”
Peters said TVPPA has sent two letters to Mayor Gipson, the first a March 30 letter with a proposal for assessment of the Holly Springs Utility Department, followed by a second to Mayor Gipson and the individual aldermen dated April 18 that provides clarification to some questions from aldermen. TVPPA has not heard from the mayor in response to those letters, he said.
Further, Peters said TVPPA has not quoted a price for services. In the proposal for assessment, it says that no cost will be incurred by the HSUD electric division until an agreement with HSUD governance is reached to conduct an actual assessment and prepare a final report.
The actual performance assessment is well outside the scope of annual services provided to TVPPA members, Peters said.
The costs for an assessment cannot be determined until HSUD governance and leadership completes the selfassessment and agrees upon a scope and plan agreed upon by both organizations, Peters said.
The April 18 letter further clarifies that a self-assessment is the first step of the process and can be completed at no cost by HSUD (the materials were attached to the March 30 proposal communication), and that the completion of it will help keep HSUD costs for an assessment down and enable TVPPA to focus the full assessment on the most critical needs of the electric department, Peters said.