Tennessee Valley Authority Reports Quarterly Results for the Period Ended March 31, 2025
Tennessee Valley Authority Reports Quarterly Results for the Period Ended March 31, 2025
The Tennessee Valley Authority (TVA) has filed its quarterly report for the period ended March 31, 2025. The report does not provide specific financial figures, but notes that the TVA is a large accelerated filer and a non-accelerated filer, and that it has elected not to use the extended transition period for complying with new or revised financial accounting standards. The report also indicates that the TVA has no securities registered under Section 12(b) of the Securities Exchange Act of 1934. The TVA is a corporate agency of the United States created by an act of Congress, and its principal executive offices are located in Knoxville, Tennessee.
Financial Performance Overview
The Tennessee Valley Authority (TVA), a federally-owned electric utility, has reported its financial results for the three and six months ended March 31, 2025. The company saw strong performance, with increases in sales of electricity, operating revenues, and net income compared to the same periods in the prior year.
Sales of Electricity
TVA’s sales of electricity increased 5% for the three months ended March 31, 2025, and 4% for the six months ended March 31, 2025, compared to the same periods in the prior year. This was primarily driven by increased demand within the data processing, hosting, and related services sector, as well as higher heating degree days, which measure the impact of weather on power demand.
The following table shows TVA’s sales of electricity by customer type:
| Customer Type | Three Months Ended March 31 | Six Months Ended March 31 | ||
|---|---|---|---|---|
| 2025 | 2024 | Change | 2025 | |
| Local power company customers | $3,199 | $2,842 | 12.6% | $5,815 |
| Industries directly served | $245 | $221 | 10.9% | $475 |
| Federal agencies and other | $34 | $30 | 13.3% | $64 |
| Revenue capitalized during pre-commercial plant operations | $(2) | $- | - | $(2) |
| Other revenue | $56 | $61 | (8.2)% | $100 |
| Total operating revenues | $3,532 | $3,154 | 12.0% | $6,452 |
Financial Results
TVA’s operating revenues, operating expenses, and net income for the three and six months ended March 31, 2025, and 2024, are summarized in the following table:
| Financial Metric | Three Months Ended March 31 | Six Months Ended March 31 | ||
|---|---|---|---|---|
| 2025 | 2024 | Change | 2025 | |
| Operating revenues | $3,532 | $3,154 | 12.0% | $6,452 |
| Operating expenses | $2,816 | $2,573 | 9.4% | $5,323 |
| Operating income | $716 | $581 | 23.2% | $1,129 |
| Net income | $408 | $307 | 32.9% | $533 |
The increase in operating revenues was primarily driven by a 12.6% and 9.1% increase in revenues from local power company customers for the three and six months ended March 31, 2025, respectively. This was due to higher sales volume and a 5.25% wholesale base rate increase effective October 1, 2024.
Operating expenses increased due to higher fuel, purchased power, and operating and maintenance costs, partially offset by lower fuel expenses due to the deferral of significant expenses resulting from higher-than-expected coal and gas prices.
As a result of these factors, TVA’s net income increased by 32.9% and 22.8% for the three and six months ended March 31, 2025, respectively, compared to the same periods in the prior year.
Generating Sources
TVA generates and purchases power from a variety of sources, as shown in the following tables:
Total Power Supply by Generating Source For the three months ended March 31
| Generating Source | 2025 | 2024 |
|---|---|---|
| Natural gas and/or oil-fired | 28% | 21% |
| Nuclear | 27% | 40% |
| Coal-fired | 15% | 14% |
| Hydroelectric | 9% | 11% |
| Total TVA-operated generation facilities | 79% | 86% |
| Purchased power (natural gas and/or oil-fired) | 11% | 7% |
| Purchased power (other renewables) | 4% | 4% |
| Purchased power (coal-fired) | 3% | 1% |
| Purchased power (hydroelectric) | 3% | 2% |
| Total purchased power | 21% | 14% |
| Total power supply | 100% | 100% |
Total Power Supply by Generating Source For the six months ended March 31
| Generating Source | 2025 | 2024 |
|---|---|---|
| Nuclear | 31% | 43% |
| Natural gas and/or oil-fired | 26% | 20% |
| Coal-fired | 14% | 13% |
| Hydroelectric | 9% | 9% |
| Total TVA-operated generation facilities | 80% | 85% |
| Purchased power (natural gas and/or oil-fired) | 11% | 8% |
| Purchased power (other renewables) | 4% | 4% |
| Purchased power (coal-fired) | 3% | 1% |
| Purchased power (hydroelectric) | 2% | 2% |
| Total purchased power | 20% | 15% |
| Total power supply | 100% | 100% |
The tables show that TVA relies primarily on its own generation facilities, with nuclear, natural gas/oil-fired, and coal-fired sources accounting for the majority of its power supply. However, TVA has also increased its use of purchased power, particularly from natural gas/oil-fired and renewable sources, to meet growing demand.
Liquidity and Capital Resources
TVA’s primary sources of liquidity are cash from operations, proceeds from the issuance of short-term debt (discount notes), and periodic issuances of long-term debt (power bonds). TVA also has access to revolving credit facilities and other financing arrangements to meet its liquidity needs.
As of March 31, 2025, TVA had $547 million in cash, cash equivalents, and restricted cash, and $20.7 billion in outstanding debt (including current maturities). TVA’s next significant power bond maturity is $1.0 billion in May 2025.
TVA’s cash flows from operating, investing, and financing activities for the six months ended March 31, 2025, and 2024, are summarized as follows:
| Cash Flow Component | Six Months Ended March 31 | |
|---|---|---|
| 2025 | 2024 | |
| Operating activities | $1,230 | $1,200 |
| Investing activities | $(1,810) | $(1,000) |
| Financing activities | $599 | $(198) |
The increase in net cash provided by operating activities was primarily due to higher revenue collections, while the increase in net cash used in investing activities was driven by higher expenditures for capacity expansion projects, such as new natural gas plants. The increase in net cash provided by financing activities was due to higher net debt issuances to fund the increased investing activities.
Key Initiatives and Challenges
TVA is facing several key initiatives and challenges, including:
Cost Reduction Initiatives: TVA has launched an Enterprise Transformation Program (ETP) to reduce planned cost increases by $500 million annually by 2026 and beyond, to support future investments in its power system.
Optimum Energy Portfolio: TVA is continuing to evaluate and invest in a mix of generation sources, including natural gas, renewables, and potentially small modular reactors, to meet growing demand and replace retiring coal-fired generation.
Sequoyah Nuclear Plant Unit 2: TVA is addressing a generator failure at this unit, which required a project to restack and rewind the main generator.
Hurricane Helene: TVA is managing the aftermath of this hurricane, which caused significant damage in its service area, including debris management and seeking reimbursement from the Federal Emergency Management Agency.
Coal Combustion Residuals (CCR): TVA continues to implement its CCR program to address environmental impacts related to the storage and disposal of CCR materials.
Corporate Governance: TVA is experiencing changes in its Board of Directors and executive leadership, including the retirement of the CEO and the appointment of a new CFO and CEO.
Outlook
TVA’s financial performance has been strong, with increases in sales, revenues, and profitability. The company is actively managing its generating mix, costs, and capital investments to meet growing demand and address environmental and regulatory challenges.
However, the recent loss of a quorum on the TVA Board could limit the company’s ability to adapt to changing business conditions, as the Board may be restricted in its ability to direct TVA into new areas of activity or change its existing direction.
Overall, TVA appears to be well-positioned to continue providing reliable and affordable electricity to its customers, but it will need to navigate the various initiatives and challenges it faces to maintain its financial and operational success.