KNOXVILLE, Tenn. ― The Tennessee Valley Authority reported $8.4 billion in total operating revenues on 118 billion kilowatt-hours of electricity sales for the nine months ended June 30, 2022. Total operating revenues increased 14% over the same period last year, primarily due to an increase in fuel cost recovery revenue driven by higher fuel rates.
Sales of electricity increased approximately 3 percent compared to the same period of the prior year. The increase in sales volume was primarily driven by economic growth in the Tennessee Valley.
“TVA and our local power company customers continue to meet record power demand this summer with industry-leading reliability and resiliency while maintaining rates that are among the lowest in the nation,” said Jeff Lyash, TVA president and CEO. “More than half of TVA’s energy comes from carbon-free sources like nuclear, hydroelectric, and renewables, which provide a major source of price stability.”
Fuel and purchased power expense increased $879 million in the first nine months of 2022 over the same period of the prior year, primarily due to higher fuel and purchased power prices. Lower nuclear output due to the Watts Bar Unit 2 steam generator replacement project and fewer significant rain events resulting in lower hydroelectric generation also contributed to higher fuel and purchased power costs.
“We understand the impact that rising fuel costs and high energy demand can have on our customers,” said Lyash. “However, our customers are seeing far less of a cost impact than the rest of the nation.”
Natural gas prices were 141 percent higher this June versus last year, and coal prices are also up significantly. However, TVA’s effective power rate, inclusive of fuel cost, is only 11 percent higher this year, which demonstrates the value of TVA’s diverse generation fleet and proactive hedging programs.
As an extension of these existing practices, TVA is executing a defined strategy laid out in our Strategic Intent and Guiding Principles document to maintain its national leadership in carbon reduction.
“At TVA, we are outcome focused and, along with significant investments in our existing carbon-free generation, such as the Watts Bar Unit 2 steam generator replacement, we know there is more we can do,” said Lyash.
“TVA recently issued an industry-leading request for proposal for 5,000 megawatts of carbon-free energy to be available by 2029 and, knowing the critical role advanced nuclear technology will play in our nation’s drive to decarbonization, we signed a partnership with GE Hitachi to advance our pursuit of small modular reactor technology.”
Depreciation and amortization expense increased $391 million for the nine months ended on June 30, 2022, primarily due to a change in depreciation rates following an updated depreciation study. The study included planning assumptions to potentially retire the remainder of TVA’s coal-fired fleet by 2035. Operating and maintenance expense increased by $163 million over the same period last year, driven by labor escalation, routine nuclear maintenance work, an increase in nuclear outage days, natural gas and hydroelectric maintenance projects, and additional inventory reserves and write-offs.
Interest expense decreased by $33 million for the nine months ended Jun. 30, 2022 – a 4 percent decrease from the prior year – due to lower debt balances and lower average long-term rates.
“In addition to the higher peaks from weather, TVA is meeting underlying growth in sales as the local economy continues to recover and people and businesses are moving to our region,” said TVA’s Chief Financial and Strategy Officer John Thomas. “TVA’s effective wholesale rate continues to run at the same rate as a decade ago, while our financial strength has allowed TVA to give back over $161 million in pandemic recovery credits to customers so far this year.”
TVA’s net income was $476 million for the first nine months of fiscal year 2022, which was $433 million lower than the same period of the prior year due mainly to higher operating expenses.
Additional highlights from TVA’s third quarter fiscal year 2022 include:
|Sales, Revenues & Expenses||2022||2021|
|Sales (millions of kWh)||117,547||113,606|
|Operating Revenues ($ millions)||$ 8,437||$ 7,403|
|Fuel & Purchased Power Expense||2,771||1,892|
|Operating & Maintenance Expense||2,269||2,106|
|Net Income||$ 476||$ 909|
|Net Cash Provided by / (Used in) ($ millions)|
|Operating Activities||$ 1,834||$ 2,227|
TVA’s executive management team will host a conference call to discuss third quarter fiscal year 2022 results at 9:30 a.m. ET, on Tuesday, Aug. 2. The event will be conducted as a webcast and as a dial-in teleconference. Participants will be able to hear the discussion and see slides via webcast, but will need telephone access to ask questions. Pre-registration for the conference call is required. Please pre- register. 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, by calling toll free 877-344-7529 in the United States or 412-317-0088 outside the United States and using the conference number 1518604. 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 June 30, 2022. 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 companies 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.
Public Information Officer
Tammy Wilson, Knoxville, 865-632-3366 or 888-882-4975
Josh Carlon, Knoxville, 865-632-4133 or 888-882-4975
Investor Relations website
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