KNOXVILLE, Tenn. – The Tennessee Valley Authority reported Tuesday net income of $81 million for the first quarter of fiscal year 2015, a $148 million increase from the first quarter of last fiscal year.
Although total sales declined 1.6 percent during the three-month period, lower total operating expenses compared to the same period last year contributed to higher net income for the period.
“We are off to a good financial start this year thanks to the progress made in reducing TVA’s controllable costs,” TVA President and CEO Bill Johnson said. “We remain on track to hit our $500 million target for sustainable annual operating and maintenance cost reductions as we work to keep rates low for the people of the Tennessee Valley.”
TVA generated $29 million more operating revenue on lower sales for the first quarter of fiscal year 2015 primarily due to a $28 million increase in base revenue. This is predominantly attributable to a non-fuel base rate increase approved by the TVA board in August 2014. The money is being invested in large capital projects such as new nuclear and gas construction, emission controls, hydro modernization and transmission projects throughout the Valley. This marks the largest yearly capital investment in TVA history.
Compared with last year, total operating expenses were $117 million, or 5.4 percent lower in the first quarter, driven by a $119 million, or 14.7 percent decline in operating and maintenance expense. Fuel and purchased power expense was $11 million, or 1.4 percent lower than the same period last year due to a $41 million, or 15 percent decline in purchased power attributable to greater availability of coal and nuclear generating resources during the first three months of fiscal year 2015.
“The reliability of TVA’s assets was crucial to the financial results we were able to achieve this quarter, with lower reliance on purchased power and good availability of our nuclear and other assets,” Chief Financial Officer John Thomas said. “The investments we are making in the TVA fleet are paying off.”
Thomas added that TVA continues to make progress in transitioning its asset portfolio to ensure balanced and reliable power generation for TVA’s customers. “The steps we are taking, in partnership with the local power companies, will position TVA to continue providing clean, lower-cost power to the 9 million people we serve every day,” he said.
TVA reported $198 million more investing cash outflows for the first quarter of fiscal year 2015 versus the same period last year, primarily due to capacity expansion spending for Watts Bar Nuclear Unit 2 and two natural gas-fired generation facilities at the utility’s Paradise and Allen fossil sites.
Total electricity sales were down 1.6 percent and sales to local power companies were 1.3 percent lower for the first quarter ended Dec. 31, 2014 (or for the first quarter of 2015) primarily due to milder weather compared with the same period a year ago. Total operating revenues for the quarter reached $2.411 billion compared with $2.382 billion for the first quarter of 2014.
TVA executive management will host a first quarter fiscal year 2015 financial conference call at 9:30 a.m. EST on Wednesday, Feb. 4, 2015. The conference call can be accessed on TVA’s website at http://www.tva.com on the Investor Relations homepage. For quick access to the live conference call, please pre-register now by going to TVA’s website 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 (877) 270-2148 in the United States or in Canada, or (412) 902-6510 outside the United States. A replay will be available one hour after the end of the conference call until 10 p.m. EST, Feb. 4, 2016, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10058667. A webcast replay and transcript will also be available for one year on TVA’s website.
TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including financial statements for the quarter-ended Dec. 31, 2014, and is available to investors and the public. TVA SEC reports are also available without charge on TVA’s website or on the SEC’s website 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 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.
Josh Carlon, Knoxville, 865-632-4133 or 888-882-4975
Clifton Lowry, Knoxville, 865-632-6638 or 888-882-4975
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