The Tennessee Valley Authority today reported $11.2 billion in operating revenues for the twelve-month period ended Sept. 30, 2018, a five percent increase from the same period a year ago.
The higher revenues were driven by electricity sales of 160.3 billion kilowatt-hours, a five percent increase in sales from the prior year. This is the highest sales level in the past five years and was primarily due to more extreme weather conditions, including a colder than normal January and warmer than normal temperatures during the third and fourth quarters.
“TVA had strong performance this year in delivering low-cost, reliable energy to the Tennessee Valley despite the challenges of extreme weather in both the winter and summer months,” said TVA’s Chief Executive Officer Bill Johnson. “The recent investments TVA has made in its generation and transmission systems combined with the individual efforts of TVA employees has helped keep rates low even as we have supplied more than half of our power from carbon-free sources.”
TVA’s results reflect a continued focus on reducing expenses from operating and maintenance activities and fuel and purchased power. Fuel and purchased power expense was down $138 million, or four percent below last year, due to the impact of lower effective fuel rates caused by lower market prices for natural gas, as well as changes in the mix of generation resources, including more nuclear, natural gas, and hydroelectric generation and less coal-fired generation. Operating and maintenance expenses for the fiscal year were down $508 million, or fifteen percent lower than last year, primarily driven by a one-time discretionary pension contribution in 2017, along with a decrease in nuclear planned outage days.
Total operating expenses for fiscal year 2018 increased two percent as compared to the prior year, due to higher depreciation and amortization expense related to the accelerated amortization of certain regulatory assets.
“While the weather drove significant top line results in 2018, TVA also made significant progress in reducing operating costs to improve the bottom line,” said TVA’s Chief Financial Officer John Thomas. “TVA’s results also reflect lower interest expense, driven by consistent execution of our long-range financial plan, which has reduced TVA’s debt to the lowest level in more than 25 years.”
Additional highlights of TVA’s fiscal year 2018 include:
Net income for fiscal year 2018 was $1.1 billion, up 63 percent from net income of $685 million for fiscal year 2017.
TVA’s service territory experienced overall warmer than normal weather for much of 2018 and record-setting low temperatures during the month of January 2018, compared to milder weather experienced for much of 2017.
TVA's economic development efforts continue to attract and encourage the expansion of business in the Tennessee Valley, with over $11.3 billion in investments and approximately 65,400 jobs created or retained during fiscal year 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 became 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.
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.