TVA’s Financial Position Strong through First Three Quarters of FY2018

KNOXVILLE, TN― The Tennessee Valley Authority today reported $8.0 billion in operating revenues through the nine-month period ended June 30, 2018, a five percent increase from the same period a year ago. The higher revenues were driven by a six percent increase in electricity sales, primarily due to weather conditions.

Total operating expenses through the third quarter of fiscal year 2018 decreased four percent as compared to the same period in fiscal year 2017 due to a continued focus on reducing operating and maintenance expense and fuel expense.

“The strong performance of TVA’s nuclear and hydroelectric assets is playing a significant

Bill Johnson, TVA president and CEO

role in keeping power rates low for customers in 2018,” said Bill Johnson, TVA president and chief executive officer. “TVA has one of the cleanest, most diverse and most reliable power fleets in the entire nation – and we are seeing the benefits of that on the bottom line, with significantly lower operating expenses.”

Operating and maintenance expense for the first nine months of the fiscal year was down $85 million, or four percent lower compared to the same period last year, mostly driven by a decrease in planned outage days and an increase in workforce efficiencies.

Fuel expense was down $68 million, or four percent below the same period last year, due to the impact of lower effective fuel rates caused by lower market prices for natural gas and more hydroelectric and gas generation.

John Thomas, TVA chief financial officer

“The major changes in TVA’s operations and power system we’ve implemented as part of our long-range financial plan are showing the positive results we expected in 2018,” said John Thomas, TVA chief financial officer.

“We have significantly improved performance, reduced costs, and made progress in reducing debt. These benefits will only accelerate as we continue to follow our plan.”

Additional highlights of TVA’s third quarter fiscal year 2018 results include:

• Net income for the nine months ended June 30, 2018, was $1.2 billion, up 123 percent from net income of $546 million for the same period of fiscal year 2017.
• TVA’s service territory experienced overall warmer-than-normal weather during the third quarter of 2018, as cooling degree days measured 36 percent above normal during the period.
• TVA’s economic development efforts continue to attract and encourage the expansion of business in the Tennessee Valley, with over $10.2 billion in investments and approximately 54,000 jobs created or retained through the third quarter of 2018.
• The TVA Board approved a rate structure change to its wholesale electric power rates at its May 10, 2018, meeting to better align wholesale rates with the underlying cost to serve customers. TVA is continuing to work with local power companies to implement these changes, which will become effective on Oct. 1, 2018.
• The Allen Combined Cycle Plant – among the most efficient gas generating plants in the U.S. – officially entered commercial operation on April 30, 2018.
• The first of three extended power uprates at the Browns Ferry Nuclear Plant was physically completed in April and achieved its full enhanced power output in July. Combined with TVA’s current nuclear and renewable assets, more than 50 percent of the Valley’s power generated through Q3 was carbon-free.
• TVA continues to update its Integrated Resource Plan to determine how it can continue to provide low-cost, reliable energy, support environmental stewardship, and spur economic development in the Tennessee Valley over the next 20 years. 

Media Release/Jim Hopson, Knoxville/TVA Public Relations