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TVA third quarter results reflect milder weather, lower debt

KNOXVILLE ― The Tennessee Valley Authority reported $8.1 billion in operating revenues for the nine-month period ended June 30, 2019, a slight increase from the same period a year ago. The financial performance reflected lower sales based on milder weather than in the same period of the previous year, and lower fuel cost recovery revenues, offset by higher base rates.

TVA’s fuel and purchased power expense was three percent lower than the nine-month period ended June 30, 2018, driven by a $114 million decrease in fuel expense. Lower commodity prices and significantly more hydroelectric generation from increased rainfall helped drive fuel expense down.

“We were pleased to be able to keep our power rates essentially flat through the first nine months of this year,” said Jeff Lyash, TVA’s president and chief executive officer. “The diversity of TVA’s power system let us benefit from lower natural gas prices and higher hydroelectric production to keep costs low for our customers.”

Operating and maintenance expense was up $408 million, or 22 percent higher than the nine-month period ended June 30, 2018, primarily due to:

• $162 million of accelerated recovery of deferred environmental costs,

• $160 million of project write-offs and materials and supplies inventory reserves and write-offs related to the anticipated retirement of certain generating units, and

• $66 million of increased outage expense due to additional planned nuclear outage days.

Interest expense was down $40 million for the nine-month period ended June 30, 2019, or four percent lower than the same period a year ago, reflecting a lower overall debt balance.

“We continue to get TVA’s financial house in order by keeping controllable costs low and being responsible with TVA’s balance sheet,” said John Thomas, TVA’s chief financial officer. “Our customers are benefitting in 2019 from our cleaner, more diverse power system, lower debt and more efficient operations.”

Additional highlights of TVA’s third quarter fiscal year 2019 include:

Net income for the nine months ended June 30, 2019, was $829 million, down 32 percent from net income of $1.2 billion for the same period of fiscal year 2018.

TVA's economic development efforts continue to attract and encourage the expansion of business in the Tennessee Valley, with over $8 billion in investments and more than 58,500 jobs created or retained through the third quarter of 2019.

During the third quarter of 2019, TVA finalized its 2019 Integrated Resource Plan, which considered many views of the future to determine the best methods of continuing to provide low-cost, reliable electricity, support environmental stewardship, and spur economic development in the Tennessee Valley over the next 20 years. The final 2019 IRP will be presented to the TVA Board for consideration at its August 2019 meeting.

During the third quarter of 2019, TVA completed power ascension testing on the third and final phase of the extended power uprate project at Browns Ferry Nuclear Plant, and is awaiting final validation. The generating capacity is expected to increase by an estimated 465 megawatts after completion of the project.

tva third quarter report

This news story may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying these statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Please refer to TVA’s most recent annual report on Form 10-K and quarterly report on Form 10-Q for a discussion of factors that could cause actual results to differ from those in the forward-looking statements.

Published August 2, 2019

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