The Tennessee Valley Authority reported $609 million of net income for the first nine months of fiscal year 2015 in its third quarter filing ending June 30. This represented a $462 million increase compared with the same period last year, on electricity sales that were about one percent lower for the same period.
Total operating expenses for fiscal year to date were $593 million lower than the same period last year – a nearly nine percent decrease – primarily due to savings in fuel and purchased power expense and lower non-fuel operating and maintenance costs.
“Solid financial performance reflects our employees’ dedicated efforts to lower costs and improve efficiency,” said Bill Johnson, president and CEO. “Our people and power system are aligned to ensure TVA continues to deliver low-cost, reliable power to the Tennessee Valley well into the future.”
TVA remains on track to achieve its three-year goal of reducing annual non-fuel operating and maintenance expense by a sustainable $500 million by the end of this fiscal year. “The continuous improvement initiatives we have undertaken have contributed to lower operating and maintenance costs of $397 million year to date compared to the same period last year,” Mr. Johnson said.
Other year-to-date highlights compared to the same period last year include:
Fuel and purchased power expense down $267 million, primarily due to lower overall coal and natural gas fuel rates and improved fleet performance.
Depreciation and amortization expense six percent higher, mainly because of the accelerated closure of some coal-fired units (including the soon-to-be closed Widows Creek Fossil Plant Unit 7).
More than $2 billion invested in construction expenditures, an increase of $370 million. These investments include the Watts Bar Nuclear Plant Unit 2 project, environmental controls at the Gallatin Fossil Plant site and new combined cycle natural gas-fired power facilities.
According to Chief Financial Officer John Thomas, TVA’s power system is one of the most diverse in the country. “Our diverse portfolio has helped us deliver superior financial performance in recent periods despite the extreme weather,” Mr. Thomas said. “We are making significant investments to balance our asset portfolio further in order to keep rates affordable and stable for our customers under a variety of conditions.”
During the quarter, TVA completed the purchase of the Ackerman Combined Cycle Plant located in Mississippi. The 700-megawatt facility is the sixth combined cycle gas-fired facility TVA has built or purchased since 2007.
In addition, TVA announced it will be working with global technology leader Google to repurpose the Widows Creek plant site for Google’s newest data center.