TVA Second Quarter Results Benefit from Lower Fuel Expense, Reduced Debt

KNOXVILLE, Tenn. ― The Tennessee Valley Authority today reported $5.5 billion in operating revenues for the six-month period ended March 31, 2019, a three percent increase from the same period a year ago. 

TVA’s fuel costs were essentially flat – three percent lower than the six-month period ended March 31, 2018, due to lower commodity prices and significantly more hydroelectric generation driven by record-setting rainfall this winter. 

“Not only did TVA help prevent approximately $1.6 billion dollars of flood damage earlier this year, we were able to turn much of that rainfall into low-cost, carbon-free energy, providing increased value to those we serve,” said Jeff Lyash, TVA’s president and chief executive officer. “The diversity of TVA’s power system continued to benefit the people of the Tennessee Valley during the second quarter.”

Operating and maintenance expense was up $267 million, or 21 percent higher than the six-month period ended March 31, 2018, primarily due to:

• $135 million of additional funds for project write-offs and materials and supplies inventory reserves and write-offs related to the anticipated retirement of certain generating units,
• $108 million of accelerated recovery of deferred environmental costs, and
• $41 million of increased outage expense due to additional planned nuclear outage days.

Interest expense was down $34 million for the six-month period ended March 31, 2019, or five percent lower than the same period a year ago, reflecting a lower overall debt balance.

“We continue to see the benefits of debt reduction in TVA’s financial results,” said John Thomas, TVA’s chief financial officer. “The significant decrease in interest expense in the first half of this fiscal year is a direct result of lower overall debt balances, despite the higher interest rate environment.”