Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 91

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 91
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 fuel, which is included in Property, plant, and equipment, is valued using the average cost method for raw materials and the specific identification method for nuclear fuel in a reactor.  Amortization of nuclear fuel in a reactor is calculated on a units-of-production basis and is included in fuel expense.TVA and the Department of Energy ("DOE") are parties to an interagency agreement (referred to as the Down-blend Offering for Tritium), under which surplus DOE highly enriched uranium and other uranium is processed by third-party contractors into low-enriched uranium, which is then fabricated into nuclear fuel for use in TVA's nuclear power plants.  Production of the low-enriched uranium began in 2019 and will continue through the end of the interagency agreement term in September 2027.  After that date, any remaining uranium in storage will be managed to ensure that the uranium is unencumbered by policy restrictions, so that it can be used in connection with the production of tritium.  Under the terms of the interagency agreement, the DOE will reimburse TVA for a portion of the costs of converting the highly enriched uranium to low-enriched uranium.  Since 2019, TVA has received $334 million in reimbursements from the DOE, which is recorded as a reduction in nuclear fuel inventory costs.  At September 30, 2025, TVA recorded $6 million in Accounts receivable, net related to this agreement.    Depreciation.  TVA accounts for depreciation of its properties using the composite depreciation convention of accounting.  Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset.  Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets.  The estimation of asset useful lives requires management judgment, supported by external depreciation studies of 

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historical asset retirement experience.  Depreciation rates are determined based on external depreciation studies that are updated approximately every five years, with the latest study implemented in 2022.Depreciation expense for the years ended September 30, 2025, 2024, and 2023 was $1.9 billion, $1.8 billion, and $1.9 billion, respectively.  Depreciation expense expressed as a percentage of the average annual depreciable completed plant was 3.04 percent for 2025, 2.92 percent for 2024, and