KNOXVILLE, Tenn. ― The Tennessee Valley Authority reported net income of $572 million for the first nine months of the fiscal year ending June 30, 2016, $37 million lower compared to the same period last year.
Power sales were down approximately 5 percent the first three quarters of FY 2016, as compared to the same period in FY 2015, primarily due to the extremely mild winter experienced in TVA’s service territory compared to record-setting cold temperatures in FY 2015. Operating revenues were 6 percent lower than the same period last year, partially as a result of lower total sales.
“Even though the Tennessee Valley experienced a warm spring, it was not enough to offset a very mild winter in terms of revenue,” said TVA President and CEO Bill Johnson. “As we noted at the end of the second quarter, despite the challenges we are maintaining a healthy financial picture and we continued to improve in the third quarter.”
Compared to the same period last year, total operating expenses decreased over $400 million, or approximately 7 percent, largely driven by savings from lower fuel and purchased power costs. This was in part the result of lower market prices for natural gas as well as changes in TVA’s generation mix.
“TVA has positioned its generation fleet to benefit from lower fuel prices,” remarked TVA Chief Financial Officer John Thomas. “In addition, TVA’s efforts to reduce operating and maintenance costs in recent years are helping us provide the Tennessee Valley with power rates among the lowest in the nation.”
TVA’s quarterly financial report also highlights the progress made in completing Watts Bar Unit 2, which will be the first new U.S. nuclear power facility of the 21st Century. The unit, which achieved initial criticality on May 23, is undergoing final ascension testing in preparation for commercial operation expected later this summer. The report also outlines TVA’s progress on other key projects, including the new natural gas-fired facilities being constructed at the Paradise site in Kentucky and the Allen site in Tennessee, and clean air equipment at TVA’s Gallatin, Tennessee, fossil plant.
“As we strive to operate more efficiently today, we are also investing for greater effectiveness tomorrow,” said Johnson. “TVA’s major investments will help make the TVA power system even cleaner and more diversified for the future.”
TVA executive management will host a conference call to discuss third quarter fiscal year 2016 results at 9:30 a.m. EDT, on Tuesday, August 2, 2016. The conference call can be accessed from TVA’s website via webcast, at http://www.tva.com, on the Investor Relations home page. For quicker access to the live conference call, please pre-register through 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 (866) 777-2509 in the United States, or (412) 317-5413 outside the United States.
A replay will be available one hour after the end of the conference call until 9:30 p.m. EDT, August 2, 2017, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10086789. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.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, 2016. TVA’s quarterly report and other SEC reports are available without charge on TVA’s website at http://www.tva.com/investors, on the SEC’s website at http://www.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 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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