KNOXVILLE ― The Tennessee Valley Authority Board of Directors recognized the outstanding performance of the TVA team in fiscal year 2021 during its meeting on Wednesday, including TVA’s success in keeping energy costs low and stable while helping to attract or retain a record-setting number of jobs for the region.
“I am immensely proud of the accomplishments of the women and men of TVA under the challenging circumstances created by the ongoing COVID-19 pandemic,” said Jeff Lyash, TVA president and chief executive officer. “Their track record is remarkable as they consistently delivered vital services across all aspects of TVA’s mission and supported public power in the region.”
Working with local power companies and other agencies, TVA helped create or retain nearly 81,000 jobs – a single year record for TVA’s
CEO Jeff Lyash
economic development team – and attract more than $8.8 billion in capital investment to the region in FY21. These totals do not include the recent Ford Motor Company announcement of a major electric vehicle and battery manufacturing complex in western Tennessee near Memphis – the single largest economic development investment in Tennessee history.
The foundation of TVA’s efforts to attract new businesses to the area is the reliability, resiliency and low rates consistently delivered by the TVA team, even during challenging times. Between Oct. 1, 2020, and Sept. 30, 2021, the TVA team:
- Maintained industry-leading power system reliability and resiliency, repeatedly meeting high energy demands in both cold and hot weather that created power disruptions in other regional utilities.
- Kept effective wholesale power rates stable and lower than 10 years ago — about 80% of the people served by nation’s top 100 utilities pay more in average retail rates than the people in the TVA service area, and industrial rates are lower than 95% of the nation’s top 100 utilities.
- Delivered more than half of the region’s energy from carbon-free sources, including nuclear, hydroelectric, and other renewables – making TVA one of the region’s cleanest power systems.
- Continued its national leadership in carbon reduction, currently 63% lower than 2005 levels and on plan for 70% reduction by 2030, a path to about 80% by 2035 and an aspirational goal of net-zero by 2050.
- Managed another above-normal rainfall year along the Tennessee River system, helping prevent about $170 million in flood damage.
TVA’s success extended into its fiscal year financial performance, with base revenue, operating cash and operations and maintenance budgets all better than forecast. TVA reduced its total financing obligations nearly $900 million in FY21, as TVA’s debt remains at its lowest debt level in more than 30 years. A detailed review of TVA’s finances will be included in TVA’s Securities and Exchange Commission Form 10-K, which will be publicly available on Monday morning, November 15.
In addition, TVA’s first green bond offering generated significant investor interest and locked in $500 million in capital for future renewable energy and sustainability projects while creating $15 million in annual interest savings.
John Thomas
“TVA’s consistent strengthening of its operational and financial performance over the last several years has left us in the best financial health we’ve had in decades,” said John Thomas, chief financial officer. “In addition to lowering wholesale rates today, we are well positioned to maintain stable rates and advance public power priorities in the future.”
TVA’s strong operational and financial performance allowed TVA and its local power company partners to remain focused on community support during the pandemic. Recognizing the lingering impacts to the region, the Board approved an extension of the Pandemic Recovery Credit through September 2023, providing a 1.5% credit on customer’s monthly wholesale power bills.
The combination of FY21 Pandemic Relief Credit and the additional 3.1% credit received by the 145 local power companies who are now long-term partners with TVA enabled $410 million to benefit electric system and local communities over the past year. TVA and local power companies partnered for an additional $8.3 million in assistance through the Community Care Fund, which has been extended through FY22 with an additional $5 million in matching funds from TVA.
“The Board is appreciative of the hard work and dedication of TVA employees over the past year and for their continuing focus on helping secure the future of the region,” said Bill Kilbride, TVA Board chair. “Their success enables the Board to take additional actions to further support the communities, businesses and people of the region.”
Bill Kilbride
Noting that performance exceeded many of the aggressive organizational goals established at the beginning of FY21, the Board approved a 1.0 multiplier for the short-term pay-for-performance plans for all TVA employees, as well as the FY21 payout for participants in the Long-Term Incentive Program.
Based on the CEO’s FY21 performance, his compensation compared to market, and consideration of TVA’s special mission and purpose, the Board approved an increase in CEO compensation that positions his compensation opportunity about 20% below the market median. Consistent with TVA’s pay-for-performance philosophy, nearly two-thirds of the CEO’s compensation opportunity is at-risk and based on achievement of specific performance goals. Full compensation details will be included in TVA’s FY21 SEC Form 10-K, available on Monday, November 15.
To continue fostering job growth in the region, TVA is committed to further increasing its supply of clean energy without impacting reliability or low cost.
In support of that objective, the Board approved development of a project to explore potential retirement and generation alternatives for the Cumberland and Kingston fossil plants. While no decisions on retirement and replacement generation have been made, the Board delegated authority to the CEO to decide on the best action once all research and required environmental reviews are completed.
Such actions ensure the sustainability of TVA’s future power supply and align with its environmental stewardship mission. Further strengthening those ties, the Board approved a Biodiversity Policy that makes clear TVA’s commitment to minimize impacts of its operations on biodiversity and ecosystems through continuing improvements in operational practices and partnerships with other agencies.
In other business, the Board:
- Approved a modification to TVA’s financial hedging practices to better align with the changing marketplace and reduce TVA’s risk exposure and fuel cost volatility.
- Delegated authority to the TVA General Counsel to appoint assistant corporate secretaries.
- Finalized charters for the restructured Board committees announced at the August 2021 meeting.
- Recognized the service of Board Directors John Ryder and Kenny Allen, who participated in their final quarterly Board meeting.
Media Release/Sandy Perry /TVA
