Tennessee Valley Authority Reports Quarterly Results for the Period Ended December 31, 2024
Tennessee Valley Authority Reports Quarterly Results for the Period Ended December 31, 2024
The Tennessee Valley Authority (TVA) filed its quarterly report for the period ended December 31, 2024. The report does not provide specific financial figures, but it indicates that the TVA is a large accelerated filer and a non-accelerated filer, and that it has not filed all reports required by the Securities Exchange Act of 1934 during the preceding 12 months. The report also indicates that the TVA has not submitted electronically every Interactive Data File required during the preceding 12 months. The TVA is a corporate agency of the United States created by an act of Congress, and it is not a shell company. The report does not provide information on the number of shares of common stock outstanding.
Tennessee Valley Authority (TVA) Reports Strong Financial Performance in Q1 2025
The Tennessee Valley Authority (TVA), the nation’s largest public power provider, has reported solid financial results for the first quarter of fiscal year 2025. Despite facing some operational challenges, TVA was able to deliver reliable electricity to its customers while maintaining a strong financial position.
Sales of Electricity Increase TVA’s sales of electricity increased by 2% in the first quarter of 2025 compared to the same period in the prior year. This was driven by higher demand from local power company customers and industries directly served by TVA, particularly in the data processing, hosting, and related services sector.
The company’s two largest local power company customers, Memphis Light, Gas and Water Division and Nashville Electric Service, each accounted for 8% of TVA’s total operating revenues in the quarter. TVA’s rate structure, which includes time-of-use pricing and a grid access charge, helped the company capture a portion of its fixed costs and reduce the impact of weather variability.
Financial Results Remain Robust TVA reported operating revenues of $2.92 billion in the first quarter of 2025, up 5.6% from $2.77 billion in the same period of the prior year. This increase was driven by a $96 million rise in base revenue, which included a $54 million increase due to higher effective base rates and a $42 million increase from higher sales volume.
The company also saw a $47 million increase in fuel cost recovery revenue, primarily due to higher coal prices. Operating expenses rose 5.5% to $2.51 billion, with increases in fuel, purchased power, operating and maintenance, depreciation and amortization, and tax equivalents expenses.
Despite the higher expenses, TVA’s operating income grew 6.2% to $413 million. However, net income declined 1.6% to $125 million due to a $6 million decrease in other income and a $18 million increase in interest expense.
Generating Sources and Fuel Mix TVA’s power supply continued to evolve in the first quarter of 2025. Nuclear generation accounted for 36% of total power supply, down from 47% in the same period of the prior year, due to less availability of nuclear generation. Natural gas and oil-fired generation increased to 23% of the total, up from 20% in the prior year, as TVA brought online new aeroderivative combustion turbine units at the Johnsonville site.
Coal-fired generation rose to 14% of the total, up from 11% in the prior year, while hydroelectric generation increased to 8% from 7%. Purchased power from natural gas, oil, other renewables, and coal-fired sources made up the remaining 19% of TVA’s total power supply.
Fuel Expenses and Purchased Power Fuel expense increased $9 million, or 1.8%, in the first quarter of 2025 compared to the same period in the prior year. This was primarily due to a $51 million increase in effective fuel rates driven by higher coal prices, partially offset by a $33 million decrease from the one-time collection of favorable coal contract price adjustments in the prior year and a $9 million decrease from less availability of nuclear generation.
Purchased power expense increased $35 million, or 9.7%, due to the lower availability of nuclear generation, which resulted in an $80 million increase. This was partially offset by a $45 million decrease from lower purchased power market prices.
Interest Expense and Liquidity Interest expense increased $18 million, or 6.9%, in the first quarter of 2025 compared to the prior year. This was driven by a $10 million increase in alternative financing interest related to a new lease financing arrangement, a $6 million increase from higher average rates on long-term debt, and a $2 million increase from higher average balances of short-term debt.
TVA’s primary sources of liquidity are cash from operations, proceeds from the issuance of short-term debt, and periodic issuances of long-term debt. The company also has access to $2.7 billion in long-term revolving credit facilities and a $150 million credit facility with the U.S. Treasury. TVA’s balance of short-term debt fluctuates as the company issues discount notes to meet short-term cash needs and pay scheduled maturities of debt.
Key Initiatives and Challenges TVA continues to make progress on its initiatives to optimize its energy portfolio and maintain reliability as it transitions away from coal-fired generation. The company has begun pre-commercial operations at its new Johnsonville Aeroderivative combustion turbine units and is constructing additional natural gas-fired generation at the Kingston and Cumberland sites.
TVA is also exploring the potential development of a small modular reactor at its Clinch River site, which could help establish advanced nuclear technology in the region. However, the company faces some legal challenges related to permits for a pipeline to serve the Cumberland Combined Cycle Plant.
In addition, TVA is working to address the impacts of Hurricane Helene, which caused significant damage in East Tennessee and Western North Carolina in late 2024. The company is managing debris at Douglas Reservoir and expects to receive reimbursement from the Federal Emergency Management Agency for its disaster response efforts.
Outlook and Conclusion Despite the operational and weather-related challenges, TVA remains in a strong financial position. The company’s focus on maintaining a diverse and flexible power supply, managing costs, and investing in infrastructure is helping it navigate the evolving energy landscape.
Looking ahead, TVA expects to continue investing in its power system assets, which may result in the need for increased debt financing. The company also anticipates utilizing available funding through the Inflation Reduction Act and the Bipartisan Infrastructure Law, as well as exploring other third-party financing arrangements, to support its capital investments.
Overall, TVA’s solid financial performance in the first quarter of 2025 demonstrates its ability to deliver reliable and affordable electricity to the Tennessee Valley region while adapting to changing market conditions and regulatory environments. The company’s commitment to operational excellence and strategic planning positions it well to meet the future energy needs of its customers.