TVA Third Quarter Results Reflect Milder Weather, Lower Debt
KNOXVILLE, Tenn. ― The Tennessee Valley Authority reported $8.1 billion in operating revenues for the nine-month period ended June 30, 2019, a slight increase from the same period a year ago. The financial performance reflected lower sales based on milder weather than in the same period of the previous year, and lower fuel cost recovery revenues, offset by higher base rates.
TVA’s fuel and purchased power expense was three percent lower than the nine-month period ended June 30, 2018, driven by a $114 million decrease in fuel expense. Lower commodity prices and significantly more hydroelectric generation from increased rainfall helped drive fuel expense down.
“We were pleased to be able to keep our power rates essentially flat through the first nine months of this year,” said Jeff Lyash, TVA’s president and chief executive officer. “The diversity of TVA’s power system let us benefit from lower natural gas prices and higher hydroelectric production to keep costs low for our customers.”
Operating and maintenance expense was up $408 million, or 22 percent higher than the nine-month period ended June 30, 2018, primarily due to:
- $162 million of accelerated recovery of deferred environmental costs,
- $160 million of project write-offs and materials and supplies inventory reserves and write-offs related to the anticipated retirement of certain generating units, and
- $66 million of increased outage expense due to additional planned nuclear outage days.
Interest expense was down $40 million for the nine-month period ended June 30, 2019, or four percent lower than the same period a year ago, reflecting a lower overall debt balance.
“We continue to get TVA’s financial house in order by keeping controllable costs low and being responsible with TVA’s balance sheet,” said John Thomas, TVA’s chief financial officer. “Our customers are benefitting in 2019 from our cleaner, more diverse power system, lower debt and more efficient operations.”
Additional highlights of TVA’s third quarter fiscal year 2019 include:
- Net income for the nine months ended June 30, 2019, was $829 million, down 32 percent from net income of $1.2 billion for the same period of fiscal year 2018.
- TVA's economic development efforts continue to attract and encourage the expansion of business in the Tennessee Valley, with over $8 billion in investments and more than 58,500 jobs created or retained through the third quarter of 2019.
- During the third quarter of 2019, TVA finalized its 2019 Integrated Resource Plan, which considered many views of the future to determine the best methods of continuing to provide low-cost, reliable electricity, support environmental stewardship, and spur economic development in the Tennessee Valley over the next 20 years. The final 2019 IRP will be presented to the TVA Board for consideration at its August 2019 meeting.
- During the third quarter of 2019, TVA completed power ascension testing on the third and final phase of the extended power uprate project at Browns Ferry Nuclear Plant, and is awaiting final validation. The generating capacity is expected to increase by an estimated 465 megawatts after completion of the project.
Selected Financial Data – Nine Months Ended June 30
|Sales, Revenues & Expenses||2019||2018|
|Sales (millions of kWh)||113,609||115,968|
|Operating Revenues ($ millions)||$ 8,079||$ 8,048|
|Fuel & Purchased Power Expense||2,134||2,204|
|Operating & Maintenance Expense||2,289||1,881|
|Net Income||$ 829||$ 1,220|
|Net Cash Provided by / (Used in) ($ millions)|
|Operating Activities||$ 2,479||$ 2,537|
TVA executive management will host a conference call to discuss third quarter fiscal year 2019 results at 9:30 a.m. ET, on Friday, Aug. 2, 2019. The conference call can be accessed from TVA’s website via webcast, at http://www.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. ET, Sept. 2, 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 10132586. 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, 2019. 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 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.
Media Contact: Jim Hopson, Knoxville, 865-632-8860
TVA Public Relations, Knoxville, 865-632-6000
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Investor Relations: Tammy Wilson, Knoxville, 865-632-3366 or 888-882-4975
Josh Carlon, Knoxville, 865-632-4133 or 888-882-4975
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