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.



Santory Johnson Given 40-Year Prison Sentence In Second-Degree Murder Case

Criminal Court Judge Tom Greenholtz has sentenced Santory Johnson to 40 years in prison after he was earlier found guilty of second-degree murder. The state had sought first-degree murder in his trial.   Witnesses told of seeing Johnson shoot Christopher Jones, 24, outside a house party the defendant was hosting Oct. 4, 2013. Johnson allegedly shot the victim as ... (click for more)

Former CCA Employee Pleads Guilty To Smuggling Marijuana Into The Workhouse

A former Corrections Corporation of America (CCA) employee has pleaded guilty to smuggling marijuana into the workhouse. Prosecutor Charlie Minor said Ronald Durham, 31, brought it into the workhouse on at least two occasions. He was given a suspended four-year prison sentence and 20 days of public work. Since he has no prior criminal record, Durham was placed on diversion ... (click for more)

What Our Schools Are And Have Been Doing About Bullying

Bullying has been a widely discussed topic during the last few weeks in the wake of the incident involving the Ooltewah High basketball team.  Contrary to public opinion, Hamilton County Schools have not been passive in our efforts to address bullying now or for the past several years.  Unfortunately, bullying is a societal norm that is infiltrating our school community, ... (click for more)

Roy Exum: Warmth For Cold Days

I come across all sorts of warm things every day and as we burrow out of sub-freezing temperatures for a day or two, shaking off ice and snow, allow me to share a few things for a change that may take the bite out of the winter wind. This is what helps me. * * * Judy Bellenfant, who has been a soul mate ever since we shared jokes in high school classrooms, sends along this ... (click for more)

District 5-3A Hoops Haunted By The Owls' Absence

ATHENS, Tenn. – District 5-3A basketball coaches gathered here on Wednesday to set up brackets and choose regular season All-District teams. In terms of all-district selections, the coaches did that fairly simple matter of voting and tabulating the numbers in short order. Bradley Central swept the top player honors when Cole Copeland and Rhyne Howard were selected to the ... (click for more)

Red Bank Picked To Win Region 2-A/AA Wrestling

It appears that the Red Bank Lions will be the target for teams involved in the Region 2-A/AA wrestling tournament being held at Hixson Middle School this weekend. The Lions, fresh off Saturday's A-AA State Duals title, are the early favorites for the upcoming tournament after claiming six number-one seeds in the 14 weight classes during the seeding meeting held Wednesday at ... (click for more)