The Tennessee Valley Authority reported $10.5 billion in total operating revenues on 157 billion kilowatt-hours of electricity sales for the fiscal year ended Sept. 30.
Total operating revenues increased 2.5 percent over the prior year primarily due to an increase in fuel cost recovery that was driven by higher fuel rates and higher sales during 2021. Revenues were partially offset by a decrease in base revenue driven by lower effective base rates mainly due to the Pandemic Relief Credit in 2021, which totaled $221 million. Sales of electricity were 4 percent higher compared with 2020.
“After the COVID-19 impacts seen the previous year, 2021 was a strong year for TVA and the 10 million people TVA serves,” said Jeff Lyash, TVA president and CEO. “TVA’s low-cost, reliable power and strong economic development efforts have continued to play a key role in helping our region recover from the pandemic while our strong financial results help keep power rates low as we invest in the sustainability and resiliency of our power system.”
Fuel and purchased power expense were $257 million higher, driven primarily by higher fuel prices and higher power sales volume. Operating and maintenance expense increased by $170 million over the prior year, mainly driven by an increase in contract labor driven by operational needs, and work to support the company’s strategic priorities. TVA’s tax equivalents expense was $14 million lower for the fiscal year 2021, mainly due to a decrease in TVA's revenue from sales of electricity in 2020, which is TVA’s basis for calculating tax equivalents. Interest expense decreased by $54 million in fiscal year 2021, which is nearly a 5 percent decrease from the prior year, driven by lower average debt balances.
TVA’s net income for 2021 was $1.5 billion, which was $160 million higher than the prior year due mainly to lower depreciation and amortization expense on accelerated retirements of coal-fired facilities. As a public power entity, TVA invests net income back into its power system or to debt reduction.
“TVA’s significant investments to diversify our power system with cleaner energy resources, reduce costs, and paydown debt are directly reflected in our 2021 performance,” said John Thomas, TVA’s chief financial and strategy officer. “Despite the recent rise in fuel prices, TVA’s effective power rate remains lower than a decade ago and our diversified power system, which already produces more than half our energy from non-carbon sources, will continue to keep rates lower for customers during these times of volatile energy prices globally.”
Additional highlights from TVA’s fiscal year 2021 include:
As of Nov. 12, 145 local power companies have long-term partnerships with TVA. Bill credits to partners totaled $189 million for the year ended Sept. 30.
TVA remains committed to supporting communities and customers across the Tennessee Valley during the region’s ongoing recovery, including the ongoing Back-to-Business credit program that provides relief to certain larger customers when returning to operations and the Community Care Fund that partners TVA and LPCs to support local initiatives that address hardships created by the COVID-19 pandemic.
TVA continued to maintain 99.999 percent reliability in delivering energy to its customers through Sept. 30. TVA has maintained 99.999 percent reliability for more than 20 consecutive years, providing industry-leading reliability.
Rainfall and runoff in the Tennessee Valley in 2021 were 123 percent and 121 percent of normal, respectively, and were safely managed by TVA’s River Operations team to minimize flooding while generating hydroelectric power.
TVA's economic development efforts, combined with its reliability and low costs, continue to attract and encourage the expansion of business and industries in the Tennessee Valley, with over $8.8 billion in investments and approximately 80,900 jobs created or retained in 2021.
Additional details of TVA’s successes over the past year are found in its FY21 Corporate Annual Report, which highlights the stories of the women and men of TVA and partner agencies who delivered outstanding performance.
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Selected Financial Data – Twelve Months Ended September 30
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Sales, Revenues & Expenses
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2021
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2020
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Sales (millions of kWh)
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157,353
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151,251
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Operating Revenues ($ millions)
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$ 10,503
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$ 10,249
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Fuel & Purchased Power Expense
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2,721
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2,464
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Operating & Maintenance Expense
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2,890
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2,720
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Interest Expense
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1,088
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1,142
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Net Income
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$ 1,512
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$ 1,352
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Net Cash Provided by / (Used in) ($ millions)
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Operating Activities
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$ 3,256
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$ 3,636
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Investing Activities
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(2,338)
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(2,015)
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Financing Activities
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(921)
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(1,422)
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