Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 96

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 1
Chunk 96
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 (in millions) At December 31, 2024At September 30, 2024Prepaid software maintenance$43 $22 Inventory work-in-progress42 41 Prepaid insurance23 19 Commodity contract derivative assets17 5 Current portion of prepaid long-term service agreements13 7 Prepaid cloud assets8 13 Other13 13 Other current assets$159 $120 

Commodity Contract Derivative Assets.  See Note 13 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives. 

6.  Plant Closures 

BackgroundTVA must continuously evaluate all generating assets to ensure an optimal energy portfolio that provides safe, clean, and reliable power while maintaining flexibility and fiscal responsibility to the people of the Tennessee Valley. In January 2023, TVA issued its Record of Decision to retire the two coal-fired units at Cumberland Fossil Plant ("Cumberland") by the end of CY 2026 and CY 2028.  In April 2024, TVA issued its Record of Decision to retire the nine coal-fired units at Kingston Fossil Plant ("Kingston") by CY 2027.  In addition, TVA is evaluating the impact of retiring the balance of the coal-fired fleet by 2035, and that evaluation includes environmental reviews, public input, and TVA Board of Directors ("TVA Board") approval.

15

Financial ImpactTVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates.  TVA's decision to retire the two units at Cumberland is estimated to result in approximately $16 million of additional depreciation quarterly, which does not include any potential impact from additions or retirements to net completed plant.  The cumulative impact approximates $128 million of additional depreciation since January 2023, related to this decision.  In addition, TVA's decision to retire the nine units at Kingston is estimated to result in approximately $9 million of additional depreciation quarterly, which does not include any potential impact from additions or retirements to net completed plant. The cumulative impact approximates $27 million of additional depreciation since April 2024, related to this decision.

7.  Other Long-Term Assets 

The table below summarizes the types and amounts of TVA