Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 345

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part II, Item 2
Chunk 345
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, and a $6 million increase from higher average rates on long-term debt.  This increase was partially offset by a $2 million decrease in interest on short-term debt primarily due to lower rates. 

Total interest expense increased $45 million for the six months ended March 31, 2025, as compared to the same period of the prior year.  This increase was primarily driven by a $25 million increase in interest on other financing leases, primarily the new lease financing arrangement with JACTG, a $12 million increase from higher average rates on long-term debt, a $10 million increase from higher average balances of long-term debt, and a $2 million increase from higher average balances of short-term debt.  This increase was partially offset by a $4 million decrease in interest on short-term debt primarily due to lower rates.

Liquidity and Capital Resources 

Sources of Liquidity

TVA depends on various sources of liquidity to meet cash needs and contingencies.  TVA's primary sources of liquidity are cash from operations and proceeds from the issuance of short-term debt in the form of discount notes, along with periodic issuances of long-term debt.  TVA's balance of short-term debt typically changes frequently as TVA issues discount notes to meet short-term cash needs and pay scheduled maturities of discount notes and long-term debt.  TVA’s next significant power bond maturity is $1.0 billion in May 2025.  The periodic amounts of short-term debt issued are determined by near-term expectations for cash receipts, cash expenditures, and funding needs, while seeking to maintain a target range of cash and cash equivalents on hand.  TVA may hold higher cash balances from time to time in response to potential market volatility or other business conditions.  In addition, cash balances may include collateral received from counterparties.

In addition to cash from operations and proceeds from the issuance of short-term and long-term debt, TVA's sources of liquidity include four revolving credit facilities totaling $2.7 billion, a $150 million credit facility with the United States Department of the Treasury ("U.S. Treasury"), and proceeds from other financings.  See Note 13 — Debt and Other Obligations  — Credit Facility Agreements.  The TVA Board authorized TVA to issue power bonds and enter into other financing arrangements in an aggregate amount not to exceed $4.0 billion during 2025.  In the second quarter of 2025, TVA issued $1.25 billion of power