The Tennessee Valley Authority reported that warm temperatures across the Tennessee Valley during the period from April through June of 2012, including four straight days with highs above 100 degrees, contributed to a 6 percent increase in electricity sales and a 5 percent increase in operating revenue compared with the same period last year.
TVA is also beginning to see positive results from a series of cost-saving actions begun in the second quarter of 2012, including reductions in discretionary spending, deferred program spending, productivity enhancements and elimination of management levels and some contractor and consultant services.
While third quarter 2012 results were improved over the same period last year, the increases in sales and revenues were not large enough to offset decreases reported in the first two quarters of 2012 attributed to the exceptionally mild winter and slow economy.
“TVA’s commitment to our customers is to deliver power at competitive rates while maintaining our financial health,” President and CEO Tom Kilgore said. “To meet our financial challenges, and continue to invest in the reliability of our system, we are reducing operating costs and producing sustainable improvements in efficiency that will move us toward our vision of low-cost, cleaner energy.”
TVA’s fuel expenses decreased $224 million or 11 percent in the first nine months of 2012 compared with the same period last year. TVA benefited from a balanced mix of generation resources and lower natural gas prices, which, in turn helped to lower rates for customers. During the first nine months of 2012, gas-fired generation increased 138 percent, and coal-fired generation decreased 27 percent compared with the same period last year. Nuclear generation also helped offset the reduction in coal-fired generation, increasing 17 percent in the first nine months of 2012.
“The hot weather is causing higher power bills for our customers, but lower fuel costs, which make up a component of their bills, have helped to keep rates 4 percent lower this year as compared to last year,” Chief Financial Officer John Thomas said.
"Helped by the recent addition of the 880-megawatt John Sevier Combined Cycle facility, which became commercially operational in April 2012, TVA’s power system was able to handle peak demands during the record-breaking heat wave in late June. TVA benefits from a diversified generation system, and moving to a more balanced system over time will help TVA maintain high reliability while meeting future energy needs,” stated Mr. Thomas.
TVA met a record load swing from just over 15,000 megawatts to more than 30,000 megawatts between 3 a.m. and 5 p.m. on June 28, when temperatures rose from 68 degrees to 101 across the Tennessee Valley. The next day TVA met a new peak record for June (31,097 megawatts), and then a new weekend peak record (30,771 megawatts) on June 30-July 1.
Other highlights during the period:
· TVA marked the 40,000th In-Home Energy Evaluation, a program offered with local power companies to help consumers become more energy efficient.
· TVA, again working with local utilities, determined its economic development programs have helped leverage more than $5.3 billion in investments by 127 companies so far this year, creating or retaining more than 42,000 jobs.
TVA reported a $290 million net loss in the first nine months of 2012, compared with a net loss of $35 million reported in the same period last year.
"The warm weather pattern contributed to higher sales and revenues during the third quarter; however, we are still projecting revenues for the year to be 7 percent less than originally planned,” Mr. Thomas said.
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, 2012, and is available to investors and the public. The public may read reports or other information that TVA files with the SEC at its Public Reference Room at 100 F Street N.E., Washington, DC 20549. TVA SEC reports are also available without charge by calling TVA toll free at 888/882-4975.