TVA First Quarter Results Reflect Resiliency, Lower Debt
KNOXVILLE, Tenn. ― The Tennessee Valley Authority today reported $2.7 billion in operating revenues for the three-month period ended Dec. 31, 2018, a seven percent increase from the same period a year ago.
The higher revenues were driven by electricity sales of 38.1 billion kilowatt-hours, a two percent increase in sales from the prior year, due to colder than normal weather in TVA’s service territory during the quarter. During November 2018, TVA recorded its second highest peak power demand ever for the month of November, at 26,714 megawatts at a systemwide average temperature of 24 degrees Fahrenheit. In addition to managing the temperature volatility, TVA’s system also provided high reliability through the highest annual rainfall recorded in 129 years of recordkeeping.
“TVA’s diversified power system, and the employees who operate it, continued to demonstrate its value as we moved into the new fiscal year,” said TVA President and CEO Bill Johnson. “Our robust hydroelectric power fleet was able to take advantage of the excess rainfall to generate additional low cost energy that helped offset otherwise higher fuel expenses.”
Fuel and purchased power expense was six percent higher than last year, primarily due to a $77 million increase in power purchased to meet increased demand. Operating and maintenance expense for the quarter was up $99 million, or fifteen percent higher than last year, driven in part by an increase of $54 million related to accelerated recovery of certain regulatory assets, as well as an increase in planned nuclear outage days.
Net interest expense was down six percent for the quarter versus the same period in the prior year, reflecting a lower overall debt balance.
“Consistent execution of TVA’s financial plan is helping TVA reduce debt,” said TVA Chief Financial Officer John Thomas. “And reducing debt will continue to have a positive impact on financial results and power rates in the future, just as we have seen so far this fiscal year.”
Net income was $135 million higher for the quarter than in the prior year, reflecting higher operating income and lower net interest expense.
Additional highlights of TVA’s first quarter fiscal year 2019 include:
- TVA's economic development efforts continue to attract and encourage the expansion of business in the Tennessee Valley, with over $4.3 billion in investments and approximately 25,000 jobs created or retained during the period.
- TVA completed physical work on the second phase of the extended power uprate project at Browns Ferry Nuclear Plant during the period. Power ascension testing is currently underway. The third and final phase of the project is planned to begin in the spring of 2019.
- TVA continues to update its Integrated Resource Plan to determine how it can maintain its focus on providing low-cost, reliable energy, supporting environmental stewardship, and spurring economic development in the Tennessee Valley over the next 20 years. The draft IRP is expected to be released for public review and comment in February 2019.
Selected Financial Data — Three Months Ending December 31
|Sales, Revenues & Expenses||2018||2017|
|Sales (millions of kWh)||38,099||37,283|
|Operating Revenues ($millions)||2,725||2,549|
|Fuel & Purchased Power Expense||738||695|
|Operating & Maintenance Expense||745||646|
|Net Interest Expense||302||322|
|Net Cash Provided by/(Used in) ($millions)|
TVA executive management will host a conference call to discuss first quarter fiscal year 2019 results at 9:30 a.m. EST, on Thursday, Jan. 31, 2019. The conference call can be accessed from TVA’s website via webcast, at 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, February 28, 2019, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10127252. A webcast replay and transcript will also be available for one year on TVA’s website at tva.com/investors.
TVA’s quarterly report on Form 10-Q provides additional financial, operational, and descriptive information, including unaudited financial statements for the quarter ended Dec. 31, 2018. TVA’s quarterly report and other SEC reports are available without charge on TVA’s website at tva.com/investors, on the SEC’s website at 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.