TVA Reports Third Quarter Fiscal Year 2023 Financial Results
Key Points - | |
• 4th consecutive year of no increase in TVA's base rate - helping to keep customers' bills low. | |
• TVA has returned $158 million in pandemic recovery credits to customers so far this fiscal year, and $607 million in total recovery-related credits. | |
• TVA has one of the nation's largest, most diverse, and clean power systems which helps keep rates stable despite higher fuel prices. | |
• 57% of TVA's power supply coming from carbon-free sources in 2023 - including nuclear, hydroelectric, and renewables. | |
• Year-to-date power sales were 4% lower due to overall milder weather and lower sales to industries. | |
KNOXVILLE, Tenn., Aug. 1, 2023 /PRNewswire/ -- The Tennessee Valley Authority reported Tuesday that it earned $8.7 billion in total operating revenues on 113 billion kilowatt-hours of electricity sales for the nine months ended Jun. 30, 2023.
Total operating revenues increased 3% over the same period last year, primarily due to an increase in fuel cost recovery revenue, which was driven by higher fuel rates for the first three quarters of this fiscal year. Sales of electricity decreased approximately 4% compared to the same period of the prior year, driven by overall milder weather during 2023 as compared to 2022, and lower sales to industries.
"We have been focused this summer on using TVA's diverse power system to keep costs low and meet power demand as several heat waves have moved through the Tennessee Valley region," said Jeff Lyash, TVA President and CEO. "And while we are focused each day on providing power that is affordable, reliable, and resilient, TVA is also actively planning and investing in the next generation of technologies to ensure that we maintain our region and nation's energy security."
Fuel and purchased power expense was $308 million higher in the nine months of 2023 over the same period of the prior year, primarily due to higher prices and fuel cost recovery. For the nine months of fiscal year 2023, 57% of TVA's power supply was carbon-free - coming from nuclear, hydroelectric and other renewables.
"TVA's customers continue to benefit from our stable base rates in 2023, which are unchanged for the fourth consecutive year," said John Thomas, TVA Chief Financial and Strategy Officer. "In addition to stable base rates, TVA's strong performance has enabled us to continue providing extended recovery credits to all customers that have totaled $158 million in just the first three quarters of this year. And we have now given back $607 million in total recovery-related credits in recent years - this is money that is staying in local communities."
Operating and maintenance expense increased by $277 million over the same period last year, driven primarily by increased labor costs, TVA's New Nuclear Program, and increased outage expense. Depreciation and amortization expense increased $96 million primarily due to an increase in amortization expense of decommissioning costs recovered in rates and TVA's decision to retire the two units at Cumberland Fossil Plant.
"We have been responsibly and methodically retiring TVA's coal-fired assets as they reach the end of their service lives and have now retired or scheduled for retirement about 75 percent of our coal-fired fleet," Lyash said. "The higher depreciation related expenses are a recognition of those retirement decisions."
Interest expense was only $3 million higher for the nine months ended Jun. 30, 2023, with lower interest on long-term debt helping to offset the impact of rising rates. TVA's net income was $91 million for the first three quarters of fiscal year 2023, which was $385 million lower than the same period of the prior year, mainly due to higher operating expenses.
Additional highlights from TVA's third quarter fiscal year 2023:
Credits from the 2.5% monthly base rate Pandemic Recovery Credit totaled $158 million for the nine months ended Jun. 30, 2023. This credit to all customers, which TVA extended through 2023, is expected to total approximately $230 million in 2023, helping local communities with ongoing recovery efforts. Recovery-related credits to customers since the pandemic now total $607 million.
TVA is in the process of doing detailed reviews of solar energy and storage project bids under its clean energy request for proposal (RFP) for up to 5,000 megawatts of carbon-free power. Projects selected will help get closer to meeting TVA's aspiration of adding 10,000 megawatts of solar by 2035.
Colbert combustion turbine units 9-10 commenced pre-commercial plant operations in June 2023 and unit 11 in early July 2023. All units became operational on July 25, 2023.
TVA is preparing for its next Integrated Resource Plan (IRP), which is expected to be completed in calendar year 2024. The IRP will serve as a guide to how TVA can best meet energy demand in the coming decades.
Progress is being made on design work under the technology collaboration agreement put in place earlier this year between TVA, GE Hitachi Nuclear Energy, Ontario Power Generation, and Synthos Green Energy, to advance the global deployment of the GE-Hitachi BWRX-300 small modular reactor technology.
Selected Financial Data – Nine Months Ended June 30 | ||
Sales, Revenues & Expenses | 2023 | 2022 |
Sales (millions of kWh) | 112,685 | 117,547 |
Operating Revenues ($ millions) | $ 8,672 | $ 8,437 |
Fuel & Purchased Power Expense | 3,079 | 2,771 |
Operating & Maintenance Expense | 2,546 | 2,269 |
Interest Expense | 794 | 791 |
Net Income | 91 | 476 |
Net Cash Provided by / (Used in) ($ millions) | ||
Operating Activities | $ 1,776 | $ 1,834 |
Investing Activities | (2,233) | (1,978) |
Financing Activities | 457 | 147 |
TVA's executive management team will host a conference call and webcast today to discuss third quarter fiscal year 2023 results at 9:30 a.m. ET. Please click here to pre-register. 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 Jun. 30, 2023. 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 the nation's largest public power supplier, delivering energy to 10 million people across seven southeastern states. TVA was established 90 years ago to serve this region and the nation by developing innovative solutions to solve complex challenges. TVA's unique mission focuses on energy, environmental stewardship, and economic development. With one of the largest, most diverse, and cleanest energy systems – including nuclear, hydro, solar, gas, and advanced technologies – TVA is a leader in our nation's drive toward a clean energy future.
TVA is a corporate agency of the United States, receiving 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. Learn more at Energy System of the Future.
Media Contact: | Melissa Greene, TVA Media Relations, Knoxville, 865-632-6000 |
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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SOURCE Tennessee Valley Authority
