The Tennessee Valley Authority reported more than $1.1 billion of net income for fiscal year 2015 in its annual filing for the year ended Sept. 30. Net income was $642 million higher compared with fiscal year 2014 due to $760 million lower operating expenses – an eight percent decrease. Total operating revenues for 2015 were 1 percent lower than the prior year, at $11 billion, on sales of electricity that were essentially flat on a year-over-year basis.
“This was a strong year for TVA and our customers,” said TVA President and CEO, Bill Johnson. “We saw slightly lower operating revenues on essentially the same level of sales, meaning the effective rate our customers paid was lower.”
Fuel and purchased power expense was $430 million lower due largely to lower fuel prices. Operating and maintenance costs decreased $503 million, or 15 percent, compared to last year.
TVA exceeded its cost reduction initiative goal of reducing operating costs by $500 million from its 2013 budget by over $100 million. “This year’s results were largely driven by sustainable improvements that will benefit TVA for years to come,” said TVA President and CEO, Bill Johnson.
TVA continued to invest in a balanced asset portfolio that is positioned to meet customers’ needs and regulatory mandates while taking advantage of fuel price volatility. Fuel and purchased power costs were more than 11 percent lower in 2015 compared to 2014 as TVA took advantage of low natural gas and coal prices to deliver additional savings to its customers.
Lower operating expenses and strong net income in 2015 also helped TVA fund some major capital investments during the year without significant amounts of additional debt. Nearly $2.9 billion was invested in construction expenditures, primarily for new generating capacity, environmental improvement activities and reliability.
TVA made significant progress during the year toward the completion of the second generating unit at the Watts Bar Nuclear Plant. Subsequent to the filing of TVA’s annual report, a major milestone was achieved when the Nuclear Regulatory Commission issued Watts Bar Unit 2 a 40-year operating license. This marked the culmination of a thorough and detailed process to complete construction of the unit in a safe and quality manner. The unit is scheduled to begin commercial operations in 2016.
Other capital investments included construction of two new gas-fired facilities in Kentucky and West Tennessee, acquisition of a 700 MW combined-cycle gas plant in Mississippi, environmental projects including clean air equipment at the Gallatin plant and nearly $250 million of other environmental investments.
“The investments we are making are better balancing our asset portfolio, which is already one of the most diverse in the country,” said Chief Financial Officer John Thomas. “We are focused on ensuring strong operational performance to drive reliability, and keep costs low for our customers.”
For the 16th consecutive year, TVA delivered 99.999 percent reliability to its customers, and continues to support reliability with nearly $340 million invested in the transmission system in 2015.
A core component of TVA’s mission is economic development. During the year, TVA partnered with its customers and other stakeholders to help attract and retain more than 76,200 jobs across the region along and a capital investment of more than $7.8 billion, extending the strong results achieved in prior years.
TVA executive management will host a fiscal year 2015 financial conference call at 10 a.m. on Monday. The conference call can be accessed from TVA’s website via webcast, at https://www.tva.com, on the Investor Relations home page. For quicker access to the live conference call, please pre-register through TVA’s website before the scheduled start time, and follow the instructions provided. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free (877) 270-2148 in the United States or in Canada, or (412) 902-6510 outside the United States. A replay will be available one hour after the end of the conference call until 10 p.m. ET, Nov. 17, 2016, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10073495. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.tva.com/finance.
TVA’s annual report on Form 10-K provides additional financial, operational and descriptive information, including audited financial statements for the year ended Sept. 30, and is available to investors and the public. TVA SEC reports are also available without charge on TVA’s website at http://www.tva.com/finance or on the SEC’s website at http://www.sec.gov or by calling TVA toll free at (888) 882-4975.