The Tennessee Valley Authority reported net income of $281 million for the first six months of the fiscal year ending March 31, 2016. Net income was $296 million less than the same period last year primarily due to the extremely mild winter experienced in TVA’s service territory compared to record-setting cold temperatures in 2015.
The mild temperatures also accounted for 8 percent lower operating revenues and approximately 7 percent lower power sales versus the first six months of last year.
“The real story here is we’ve been able to maintain a healthy financial picture despite lower revenues,” said TVA President and CEO Bill Johnson. “The cost efficiencies we’ve achieved in the past few years, combined with our diversified power fleet, are keeping power prices lower for customers, even with lower sales. And, our continued financial strength is helping us continue to invest in the asset base, without undue reliance on new debt."
Total operating expenses for the six months decreased by over 2 percent with savings from lower fuel and purchased power costs being the primary drivers.
“The diversity and flexibility of the TVA power system served us well in dealing with the extreme changes in the weather while enabling us to maintain top reliability,” said TVA Chief Financial Officer John Thomas. “The ability to generate more power from natural gas-fired resources also allowed us to take advantage of cheaper gas prices, while supporting planned outages in our nuclear fleet.”
The financial report also contains a progress update on Watts Bar Unit 2. The first new nuclear generating unit of the 21st century is expected to reach initial criticality this month and commercial operation this summer at a total estimated project cost of $4.7 billion. “We are conducting the final comprehensive tests to ensure the unit is capable of delivering electricity safely and reliably to the people of the Valley,” Mr. Johnson said. “We are not rushing this. As with all their work at Watts Bar Unit 2, the team is working carefully to power the unit the right way, and achieve commercial operation in a safe and quality manner.”
TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including unaudited financial statements for the quarter ended March 31, 2016, and is available to investors and the public. TVA financial reports are also available without charge on TVA’s website at http://www.tva.com/investors, on the SEC’s website at http://www.sec.gov or by calling TVA toll free at (888) 882-4975.