KNOXVILLE, Tenn. — The Tennessee Valley Authority Board of Directors today approved a $10.37 billion budget that will keep TVA on track to achieving its long-range goals of improving financial and operational performance and reducing debt. The FY 2018 budget keeps operating and maintenance spending flat, maintains low energy costs and invests in TVA’s generation and transmission systems.

The board also approved a one-time $500 million contribution to the TVA Retirement System. This is in addition to the yearly contribution of $300 million.

“A major focus on TVA’s financial health has been to attend to long-term liabilities, especially related to debt and pension,” said TVA President and CEO Bill Johnson. “The board has taken steps today to reduce both of those through the modest base rate increase and the pension contribution. Both reduce risk and provide future flexibility, which become more important as the utility industry faces significant change and uncertainty.”

The budget approval contained a 1.5 percent effective retail rate increase, slightly below the rate of inflation, amounting to about $1.50 more a month for the average Valley resident using 1,000 kilowatt-hours per month. The increase will take effect with the 2018 budget year that begins Oct. 1, 2017.

“This modest rate increase recognizes the need for TVA to continue to build on the financial and operational performance improvements we have made over the past three years, while still providing an effective retail rate below 2013 levels that remain among the lowest in the region,” Johnson said. “It will allow us to more effectively deal with a rapidly changing industry while lowering debt levels that directly affect our ability to continue to provide energy at the lowest feasible cost.”

In other business, the board approved:

• FY 2018 corporate performance goals that continue to emphasize safety, financial health, operational excellence and economic development
• A $75 million contract with Delta Dental to provide dental benefit plan administration
• Plans to move forward with consolidation of TVA’s Knoxville-area operations into a portion of the existing Knoxville Office Complex
• Updated Reservoir Land Management Plans to effectively allocate land use and direct stewardship activities as part of a comprehensive Valley-wide effort and on eight TVA reservoirs: Chickamauga, Fort Loudoun, Great Falls, Kentucky, Nickajack, Normandy, Wheeler and Wilson
• Selection of Ernst & Young LLP as TVA’s external auditor for FY 2018
• A new board practice on external inquiries

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving more than 9 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.