TVA Cuts Losses, But Still Has $67 Million Shortfall For 1st Quarter

Tuesday, February 4, 2014
The Tennessee Valley Authority reported Tuesday that operating expenses declined and its bottom line results improved in the first quarter of fiscal year 2014 compared with the same quarter a year ago.

“Our efforts to keep rates low and reliability high for our customers by working more efficiently helped to offset lower sales and revenues reported in the first quarter of 2014,” TVA President and CEO Bill Johnson said.

TVA reported a $67 million net loss on operating revenues of $2.
38 billion in the first quarter of 2014, an improvement over a $245 million loss on revenues of $2.58 billion for the same period last year.

TVA’s first-quarter filing to the U.S. Securities and Exchange Commission covered the three months ended Dec. 31, 2013, a period between summer and winter when lower demand for electricity typically results in a net loss.

Compared with last year, operating and maintenance expenses were down $112 million, or 12 percent, in the first quarter of 2014. This was driven by a $91 million decrease in expenses from planned outages, projects and scheduled maintenance, and a reduction in contract labor through cost-saving initiatives. A $10 million increase in coal-fired operation outages partially offset the O&M savings.

“We continued to see positive results from our efforts to achieve sustainable operating and maintenance cost reductions during the first quarter,” Chief Financial Officer John Thomas said. “The actions we are taking now help position TVA to remain financially healthy and meet our goal of reliable, low-cost and cleaner energy for the people of the Valley.”

Total operating expenses were 14 percent lower than the same period last year, driven primarily by a 32 percent decrease in fuel expenses. TVA’s nuclear and hydroelectric generation increased 29 percent and 30 percent, respectively, compared to the first quarter of last year, helping to drive the lower fuel costs. A 2 percent increase in purchased power expense also partially offset higher gas prices.

Operating revenues, impacted by lower fuel recovery costs, were $197 million lower compared with last year’s first quarter. TVA’s use of less-expensive nuclear and hydroelectric generation helped reduce fuel costs recovered through rates by $255 million, a decrease partially offset by a $60 million increase in base revenue.

"We were pleased to see such strong performance from our nuclear and hydro power assets and our entire fleet during the quarter, helping us provide low-cost reliable power,” said Mr. Johnson. “This demonstrates the value and flexibility of TVA’s well-diversified power system.”

Total electricity sales were down three percent for the quarter, primarily due to the loss of TVA’s largest directly served customer. But sales to local power companies were seven percent higher as a result of cooler weather than a year ago and some growth in electric demand.

TVA executive management will host a first quarter fiscal year 2014 financial conference call at 9 a.m. EST on Tuesday, Feb. 4. The conference call webcast can be accessed on TVA’s website at http://www.tva.com/finance. For quick access to the live conference call, please pre-register now by going to TVA’s website 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 (877) 270-2148 in the United States or in Canada, or (412) 902-6510 outside the United States. A replay will be available one hour after the end of the conference call until 9 a.m. EST, Feb. 18, 2014, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10039735. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.tva.com/finance. 

TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including unaudited financial statements for the quarter ended Dec. 31, 2013, and is available to investors and the public. TVA SEC reports are also available without charge on TVA’s website at http://www.tva.com/finance or 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 quarterly report on Form 10-Q and annual report on Form 10-K for a discussion of factors that could cause actual results to differ from those in the forward-looking statements.)

Chief Justice Bivins Plans Ceremonial Swearing In With Governor Haslam

Tennessee Supreme Court Chief Justice Jeff Bivins will have a ceremonial swearing in with Governor Bill Haslam at 3:30 p.m. Thursday in the historic Supreme Court chambers within the Capitol. The event is open to the public.  Chief Justice Bivins was unanimously elected chief by the Court last month. He was appointed to the Court in 2014 by Governor Bill Haslam and was elected ... (click for more)

The CPR LifeWrap Launch Party Is Friday

The CPR LifeWrap launch party will be held Friday from 5-9 p.m at The Edney, 1100 Market St., 5th Floor.  CPR LifeWrap will be launching its Kickstarter campaign, as well as premiering its new video. There will be guest speakers, food, drinks, live music, mingling and door prizes. (click for more)

County GOP Chairman Says Berke Should Resign For Admittedly Using Encrypted Messaging With Top Staff; Berke, Lee Call It Blatant Partisan Attack

Hamilton County Republican Party Chairman Tony Sanders said Chattanooga Mayor Andy Berke "should immediately resign after admitting that he and his senior staff employ an encrypted message application that neither records or stores messages sent and received for the purpose of official city of Chattanooga business on a government-owned server." He said he was guilty of "deliberates ... (click for more)

Grohn Says Berke Use Of Encrypted Message Service Was Deliberate Attempt To Avoid Open Records

City Councilman Larry Grohn said Friday  that the use of an encrypted message service by Mayor Andy Berke was a deliberate attempt to avoid the Open Records Act. Councilman Grohn, who is running for mayor, said, " In recent days, there has been one story after another come out concerning how the Mayor and his head staffers have used end-to-end encryption apps to ... (click for more)

Chattanooga's Citizens Are The Best

Today, when I finished my shift, my wife and I had a rare kid-free time where she and I could enjoy a nice quiet dinner. So, when I left my extra job and she left her job, we met at a neat local place in St. Elmo. She and I had been looking forward to and planning this dinner all day. You see, between my work with the city of Chattanooga, my many hours of extra jobs, and our responsibilities ... (click for more)

Roy Exum: The Knobfather & Me

I’ve seen some beautiful things in my life. I’ve eaten dinner inside the Eiffel Tower with the city of Paris all aglitter below. I’ve been sprayed by champagne in the Dallas Cowboys’ dressing room after they won the Super Bowl. I’ve stood both at the top and at the bottom of the Grand Canyon. I’ve snorkeled in the Great Exuma islands, learned to snow ski in the Austrian Alps, and ... (click for more)