The Tennessee Valley Authority Board of Directors Wednesday approved a $10.55 billion budget for the upcoming fiscal year, which begins Oct. 1.
The budget continues to align with TVA’s long-range financial plan implemented in 2013, seeking to balance capital improvements and financial health with debt reduction and minimizing the impact on rates. It further reduces TVA operating and maintenance spending from FY18 levels while maintaining funds for capital improvement and continuing the process of debt reduction, said officials.
"The hard work and focus of TVA’s employees has consistently kept us on course for better financial and operational performance, and we are seeing those efforts in our results,” said TVA President and CEO Bill Johnson. “Our FY19 budget reflects our ongoing commitment to serve the people of the Valley with safe, reliable and increasingly cleaner power at the lowest feasible rates.”
The budget approval contained a 1.5 percent effective retail rate increase, slightly below the rate of inflation, amounting to about $1.78 more a month for the average Valley resident using 1,000 kilowatt-hours per month. The increase will take effect on Oct. 1.
“In FY19, we enter the sixth year of our long-range financial plan that outlined capital investments in assets to diversify and maintain our fleet, fuel cost savings and a reduction in overall debt," said TVA Chief Financial Officer John Thomas. "The plan also calls for lower operating and maintenance costs, which have been achieved through the work of our employees.
"The advantage to this approach becomes apparent when looking at our results. Rates today remain among the lowest 25 percent in the U.S. and TVA’s wholesale rates are essentially the same as they were in 2013. During that same period, we’ve been able to reliably generate cleaner energy with lower fuel costs while beginning to reduce our debt.”
In other business, the board approved:
FY19 corporate performance goals and scorecards that continue to emphasize safety, financial health, operational excellence and economic development.
FY18 tax equivalent payments to the eight states impacted by TVA’s operations that are seven percent higher than FY17.
A public lands protection policy to better protect the lands entrusted to TVA’s care.
Entering into agreements to obtain an adequate and secure supply of low enriched uranium nuclear fuel.
A contract with WESCO Distribution for supplies and administrative services.
A contract with HSA Bank for health savings account administration services.
Selection of an external auditor for FY19.
A pilot program to modify the board’s public listening session format beginning with its next meeting in November.