Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 130

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part I, Item 1
Chunk 130
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 for the same period, are summarized in the table below:TVA Local Power Company ContractsAt or for the Three Months Ended December 31, 2024Contract Arrangements(1)Number of LPCs Revenue from Sales of Electricity to LPCs(in millions)Percentage of Total Operating Revenues20-year termination notice148 $2,272 77.8 % 5-year termination notice5 344 11.8 %Total153 $2,616 89.6 %Note(1)  Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with a five-year termination notice, TVA has a   10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority).  Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively.  Sales to MLGW and NES each accounted for eight percent of TVA's total operating revenues for the three months ended December 31, 2024 and for the three months ended December 31, 2023.  Contract BalancesContract assets represent an entity's right to consideration in exchange for goods and services that the entity has transferred to customers.  TVA did not have any material contract assets at December 31, 2024.  Contract liabilities represent an entity's obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers.  These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation.  See Economic Development Incentives below and Note 10 — Other Long-Term Liabilities — Long-Term Deferred Revenue.

Economic Development Incentives.  Under certain economic development programs, TVA offers incentives to existing and potential power customers in targeted business sectors that make multi-year commitments to invest in the Tennessee Valley.  TVA records those incentives as reductions of revenue.  Incentives recorded as a reduction to revenue were $85 million and $73 million for the three months ended December 31, 2024 and 2023, respectively.  Incentives that