TVA Delivers Strong Financial Results in Fiscal Year 2018
KNOXVILLE, Tenn. ― The Tennessee Valley Authority today reported $11.2 billion in operating revenues for the twelve-month period ended September 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 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 October 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.
TVA executive management will host a conference call to discuss fiscal year 2018 results at 9:30 a.m. EST, on Thursday, November 15, 2018. The conference call can be accessed from TVA’s website via webcast, at http://www.tva.com, on the Investor Relations homepage. For quicker access to the live conference call, please pre-register through TVA’s Investor Relations Events page, or by clicking here, before the scheduled start time, and follow the instructions provided. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free (844) 308-6432 in the United States, or (412) 717-9611 outside the United States.
A replay will be available one hour after the end of the conference call until 9:30 a.m. EST, December 15, 2018, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10123436. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.tva.com/investors.
TVA’s annual report on Form 10-K provides additional financial, operational and descriptive information, including audited financial statements for the year ended September 30, 2018. TVA’s annual report and other SEC reports are available without charge on TVA’s website at http://www.tva.com/investors, on the SEC’s website at http://www.sec.gov, or by calling TVA toll free at (888) 882-4975.
This release 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.
The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving nearly 10 million people in parts of seven southeastern states. TVA receives no taxpayer
funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system
and assists local power companies and state and local governments with economic development and job creation.