The Tennessee Valley Authority’s inspector general said in a report that agency managers placed business interests above regulatory compliance after a plant incident in Alabama.

Now an environmental group is calling for greater federal oversight of the TVA in light of a massive fly ash spill at the Kingston steam plant on Dec. 22.

The Knoxville News Sentinel reported that an inspector general’s report dated March 4, 2008 was produced after leaks were found in the flue gas ductwork at the Widows Creek Fossil Plant in Alabama. The report said TVA put “business operations” ahead of “ethics and compliance issues” at that plant.

Stephen Smith’s group the Southern Alliance for Clean Energy is planning to file environmental lawsuits against TVA over the Kingston spill.

“TVA has the heavy-duty emphasis on cost-cutting, on keeping the plants running without any downtime,” Smith said.

He said they need to identify at Kingston where shortcuts were made, whether the authority asked for variances or if lower-level employees asked for downtime.

“Clearly, people made mistakes here by putting too much stuff in a structure that could not hold it,” Smith said.

Smith is scheduled to testify Thursday at a Senate Environment and Public Works Committee hearing along with TVA and Roane County officials.

In the report on the Alabama leaks, while the duct work problems were addressed and management made efforts to repair the leaks, “the emphasis was on efforts to contain the leaks while keeping the plant operating until the next major outage.”

The report said little consideration was given by TVA officials of reporting the “continuous nature and extent of the leaks” to Alabama environmental authorities.

The Widows Creek plant leaks were reported by the TVA inspector general and the EPA Criminal Investigations Division to the U.S. Attorney General in northern Alabama, which “declined prosecution,” the report states.

A February 2008 TVA inspection report of the Kingston steam plant showed a TVA fly ash retention pond has had leaks, seepage and water-logged walls for years before the Dec. 22 failure. The report shows TVA knew about leaks at the site for more than two decades.

Tim Hope, vice president of capacity expansion at TVA and incident commander for the Kingston accident, said TVA follows regulations in operating its plants.

“Our first and foremost (priority) is that we abide by all the rules and regulations and laws to operate our plants in a safe and effective way — under the rules of all the ruling bodies,” Hope said. “Any guidelines and rules — that’s the most important thing that we have to abide by. Everything else is secondary.”