BLAIRSVILLE, Ga. – The Tennessee Valley Authority’s employees were on the job making life better for the region in fiscal year 2016. Their continued efforts to improve efficiencies and reduce operating and maintenance costs and their strong stewardship of the Tennessee Valley’s natural resources, environment and economy provided the foundation for TVA’s success in achieving and exceeding operational and financial performance.
“Across the region, employees met a high standard in 2016 in the key areas of our mission of service – energy, environment and economic development,” TVA President and CEO Bill Johnson told the TVA board of directors at its meeting today. “It was a strong year for TVA employees – they met goals and objectives and delivered results for the Tennessee Valley financially, operationally and in our relationships with customers and other stakeholders.”
During TVA’s fiscal year ended Sept. 30, management and employees have been focused on continuous improvement and performance excellence in several operational areas critical to fulfilling its mission of service. Johnson highlighted these performance areas during the board meeting including:
TVA Chief Financial Officer John Thomas provided the board with fiscal year-end results. “TVA’s customers continue to benefit from our cost efficiency achievements,” Thomas said. “Combined with the substantial savings in fuel expense as a result of our diversified power system, we are driving power rates down across the Tennessee Valley, helping our customers and supporting economic development.”
TVA achieved its highest net income ever of $1.2 billion in 2016, $641 million more than budget and $122 million more than last year. Operating and maintenance expenses have been reduced more than $800 million over 2013 budget levels. “As a result of the continuous improvement efforts of TVA’s employees, we ended the 2016 fiscal year with lower effective rates for our customers, lower expenses, lower debt balance and higher net come,” he said.
TVA will hold a call Tuesday, Nov. 15, with investors and news media to review its FY 2016 financial performance. The 10-K annual report will be available the same day.
The year wasn’t without its challenges. The region experienced the wettest December on record, and the hottest and driest summer since 2010 – with dry conditions continuing. During October, run-off across the Tennessee River watershed was less than one-tenth of an inch, the lowest in 142 years of recordkeeping. The lack of this valuable, low-cost, renewable resource means TVA has less hydro power available. TVA managed the river to meet commitments to stakeholders and release only the minimum amount of water necessary for downstream requirements such as water quality, commercial navigation and municipal and industrial water supply.
The challenges will continue into 2017. Power demands continue to be flat and TVA is currently projecting load growth of three-tenths of one percent over the long term with the possibility of going even lower. “Reduced load means less revenue, a challenge for any business,” Johnson said. “New technologies, new generating resources and new consumer preferences are also impacting our business and TVA is working with its customers to stay ahead of these changes.
“I continue to have high expectations of our management and employees to deliver on our strategic plan, the 10-year financial and asset plan, our three-year business plans and the annual goals and metrics that drive day-to-day performance,” he said. “In this way, we will continue to supply electricity at low rates and with high reliability to the people of the Valley.”
During the board meeting, the board acted to:
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.
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