TVA Reports Higher Revenues, Lower Expenses For 3rd Quarter

Tuesday, August 5, 2014

The Tennessee Valley Authority reported Tuesday net income of $147 million for the nine months ended June 30, 2014, on almost $8 billion in revenue, and a nearly 7 percent reduction in operating and maintenance expenses year-over-year resulting from cost-saving initiatives.

            “We have seen some positive signs both operationally and financially through the first nine months of the year,” TVA President and CEO Bill Johnson said. “Revenues are higher, operating expenses are down and income is up. In all, we are on track for a good fiscal year.”

            In addition, TVA is making necessary investments in generating assets while reducing debt in keeping with its service mission to provide affordable and reliable power to the 9 million residents of the Tennessee Valley.

            “Remaining focused on the right strategic priorities has improved TVA’s overall financial health,” Chief Financial Officer John Thomas said. “We have invested nearly $2 billion in our asset base so far this year, while reducing debt by over $1 billion.”

            Although the April-June period is a transitional quarter with generally milder weather and lower demand for electricity, Mr. Johnson said, “We have seen an underlying layer of growth in power sales, and that is very encouraging economic news.”

            Sales to 155 local power companies, which represent service primarily to homes and businesses and account for most of TVA’s total sales, gained 1.1 percent in the third quarter, and 5.4 percent for the first nine months of 2014, compared with the same periods last year. An extremely cold winter contributed to those gains, but sales also reflected an underlying layer of growth in demand.

            Total sales were down 3 percent through the first nine months when compared with the same period a year ago, due largely to the closing of U.S. Enrichment Corp.’s facilities in Paducah, Kentucky, later in 2013. USEC was TVA’s largest directly served industrial customer at the time.

TVA is engaged in a three-year strategy to reduce operating and maintenance spending by a sustainable $500 million by the end of fiscal 2015 as part of a continuing effort to reduce costs and increase efficiencies.  

Operating and maintenance expenses declined nearly 7 percent for the first nine months of the year, compared with the same period last year. The decline was primarily due to $120 million of reductions from cost-savings initiatives, and a $62 million decrease in project-related expenses.

Through the first nine months of 2014, operating costs have also been driven by lower expenses for fuel, partially offset by higher purchased power and depreciation expense. Total operating expenses for the first nine months of 2014 were 3.4 percent lower than the same period last year.

            Total operating revenues increased 1.9 percent in the third quarter and 0.6 percent for the nine months ended June 30, compared with the same periods last year. Higher operating revenues in the third quarter were primarily due to a $94 million increase in fuel cost recovery, partially offset by a $41 million decrease in base revenue, largely due to lower directly-served sales.

Higher operating revenues for the nine months ended June 30, 2014, were primarily due to a $178 million increase in base revenue, driven by higher sales volume to local power companies and a non-fuel base rate increase effective Oct. 1, 2013. Partially offsetting the increase in base revenue, fuel cost recovery declined $127 million due to the use of less expensive nuclear generation and a decline in sales to industries directly served by TVA.

TVA had net income of $147 million on $7.97 billion in revenue through the first nine months ended June 30, 2014, with an $81 million loss on $2.65 billion in revenue during the third quarter. Net results for the first nine months reflected an improvement over a loss of $203 million on $7.92 billion in revenue for the same period a year ago, which included a loss of $12 million on $2.60 billion in revenue in the third quarter of 2013.




Get Emailed Headlines From Chattanoogan.com; Like Us On Facebook, Twitter For Instant News

We send out headlines each day of the latest Chattanooga news.  Our news headlines have links that take you to the stories with a click. We also send out special emails if there is a highly significant local news story breaking so you will be aware of it quickly. To be added to the email headline list, just email us at news@chattanoogan.com In addition, like us ... (click for more)

Charles Vaughn, 72, Was Victim In Lookout Valley Fire On Sunday

The victim in Sunday's fatal fire at 1218 Judys Lane in Lookout Valley has been identified as Charles Vaughn. He was 72.   Details on the incident are still being obtained, but Mr. Vaughn was reportedly in the attached garage around  3 p.m. on  Sunday afternoon working on a lawnmower when the fire started. His wife and daughter were in the house ... (click for more)

Tired Of Property Tax Increases

Why is it every time the city of Chattanooga and Hamilton County want to raise money they have to punish the homeowners?  I'm sick of the few paying for the many.   If you want to be fair, I would not complain on a 1/2 cent local sales tax raise since everyone would have to contribute their fair share.  Or how about a wheel tax which would get everyone who owns ... (click for more)

Roy Exum: Third Son Takes His Life

Steven Ferrin, described by his parents as “a handsome, bubbly and witty young man,” was the victim of what is called “a sectarian attack” in recent weeks near his home in north Belfast (Ireland) and last weekend was found dead after the 31-year-old father of a 7-year-old girl had taken his own life. Compounding the tragedy is the horrific news that Steven’s other two brothers and ... (click for more)

Impressive Signal Mountain Whips Red Bank, 3-0

The Signal Mountain Lady Eagles have one of the better volleyball teams in town this fall and it’s no surprise that they are unbeaten in district play. They proved just how good they are Tuesday evening in Red Bank’s Susan Ingram Thurman Gymnasium as they needed about 50 minutes to beat the Lionettes for the second time this season. Set scores were 25-6, 25-7 and 25-15. ... (click for more)

East Hamilton Holds Off Sale Creek For 3-2 Volleyball Win

(Story will be updated) East Hamilton blew a 2-0 lead, but rebounded in the fifth set Tuesday to beat gutsy Sale Creek 3-2 in high school volleyball action at East Hamilton. The Lady Hurricanes built a 13-7 lead in the finale, fretted while the Lady Panthers rallied to within 13-11 and got a winning return from Taryn Robinson and a slap shot by Jordyn Griffith for the ... (click for more)