WASHINGTON — The head of the Tennessee Valley Authority acknowledged a "larger cultural problem" at the agency as an inspector general's report says it allowed its lawyers to stifle a $3 million study into the cause of a massive coal ash spill to limit its legal liability.

The report also said the nation's largest public utility failed for more than 20 years to heed warnings that might have prevented the spill.

Sen. Lamar Alexander, R-Tenn., and chairman of the TVA congressional caucus, said the report "raises major concerns which must be taken seriously ... to ensure that such a coal ash spill never happens again."

The 111-page report from TVA Inspector General Richard Moore came as officials from the agency made a third appearance before a congressional panel since the Tennessee spill Dec. 22.

TVA President and CEO Tom Kilgore told a House Transportation and Infrastructure subcommittee that "opportunities were missed" for TVA to make changes that could have prevented the spill, including decisions not to adopt dam safety guidelines for ash ponds.

"These missed opportunities are indicative of a larger cultural problem at TVA, in how all of us at TVA think and act on risks, how we process and share information, and how we build a stronger sense of accountability in all we do," Kilgore said.

The breach of 5.4 million cubic yards of toxic-laden coal ash from the earthen dams and holding ponds at TVA's Kingston Fossil Plant into the Emory River and lakeside homes has raised questions about the risks and lack of regulation of hundreds of similar sites around the country.

In the wake of the disaster, an estimated $1 billion cleanup and several pending lawsuits from residents, Knoxville-based TVA hired consulting firms to analyze what happened at Kingston and offer recommendations for handling coal byproducts there and at 10 other TVA coal-fired power plants in Tennessee, Alabama and Kentucky.

"TVA had a clear but difficult choice to make in the aftermath of the Kingston spill," Moore's report said.

"One choice was to conduct a diligent review of TVA management practices as well as to conduct a technical physical examination of the failed structure and then to publish whatever was discovered to the world.

"The second choice was to 'circle the wagons,' carefully craft press releases to project TVA in the most favorable light and to tightly control any reports done by TVA of the failure to minimize legal liability."

The inspector general said management's decision to allow TVA's lawyers, the Office of General Counsel, to hire the consultant and narrow his focus for a critical "root cause" study of the disaster "predetermined the choice that would be made between accountability and litigation strategy."

"The OGC did what good lawyers do; they defend their client," Moore's report said.

Moore's report praises subsequent actions by TVA's Board of Directors on July 21 to publicly acknowledge "that mistakes were made" and to accept a study more critical of management by McKenna Long and Aldridge.

But Moore, using his own engineering consultant, Marshall Miller & Associates, ripped a 6,000-page, 10-volume, $3 million study by AECOM USA Inc. on the cause of the disaster released June 25.

Moore criticized the report for failing to consider management practices and for giving too much weight to a hard-to-find "slime layer" of watery ash deep below the ash pile as the trigger for the collapse. The slime layer explanation tended to lessen the "culpability" and "legal liability" of TVA management, he wrote.

The Marshall Miller study said the spill "could have possibly been prevented" if TVA had heeded concerns about the stability of the Kingston ash pond raised by TVA employees and consultants as early as 1985 and again in 2004.

On Capitol Hill, Kilgore said he asked the general counsel to select the study contractor "in order to provide as much independence as possible" but said the company would learn from and follow up on all of the studies that have been conducted.

"It is apparent that lack of clarity within the organization led to poor internal communications, unclear accountability, a lack of follow-through on issues and poor procedural compliance," he said.

Barry Thacker, an independent engineering expert in Knoxville, has said leaks in 2003 and 2006 also were signs of growing problems from water pressure deep within the facility. Thacker has discounted the slimes, though the inspector general's study suggested they are plausible.

The main problem, Moore suggested, is a long-held view among those running TVA's coal-fired power plants that "ash was relegated to the status of garbage at a landfill rather than treating it as a potential hazard to the public and the environment."

"For TVA to be successful in avoiding another Kingston spill," Moore wrote, "... employees must be educated to think differently about ash management than they have over several generations."

Rep. John "Jimmy" Duncan Jr., R-Tenn., defended TVA at the hearing, saying it should be commended for efforts so far to clean up the site and improve operations.

"We have to have a little balance and common sense in this situation," he said.



Copyright 2009 The Associated Press.