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

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 6
Chunk 11
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 years ended September 30, 2025 and 2024, respectively.

(4)  Total cost per kWh is based on a weighted average.

Fuel expense increased $207 million for the year ended September 30, 2025, as compared to the prior year.  An increase of $194 million was due primarily to higher effective fuel rates related to using higher cost coal and natural gas generation due to less availability of nuclear generation as compared to the prior year.  Additionally, fuel expense increased $22 million due to the recovery of prior year deferrals of unplanned coal costs, and gas prices being lower than forecasted during the summer of 2025.  Partially offsetting these increases was a decrease of $9 million due to more availability of hydro generation as compared to the prior year.  

Purchased power expense increased $525 million for the year ended September 30, 2025, as compared to the prior year.  This increase was primarily due to higher demand for energy and less availability of TVA nuclear generation, resulting in an increase of $305 million.  Additionally, purchased power expense increased $173 million due to higher purchased power market prices as compared to the prior year.  Finally, purchased power expense increased $47 million due to the recovery of prior year deferrals of unplanned purchased power costs, and gas and purchased power prices being lower than forecasted during the summer of 2025.

Operating and maintenance expense increased $76 million for the year ended September 30, 2025, as compared to the prior year.  This increase was primarily due to $136 million of increased payroll and benefit costs primarily due to labor escalation for cost of living increases, severance costs associated with ETP efforts, and higher medical claims.  Partially offsetting these increases was a $48 million decrease in outage expense primarily due to fewer nuclear refueling outages. 

Depreciation and amortization expense increased $133 million for the year ended September 30, 2025, as compared to the prior year.   The increase was primarily driven by an increase of $43 million related to amortization expense of decommissioning costs recovered in rates and amortization expense of finance leases and an increase in depreciation expense of $18 million related to the decision in April 2024 to retire Kingston.  Additionally, there was an increase due to depreciation of additions to net completed plant.   See Note 1 — Summary of Significant Accounting Policies — Property, Plant, and Equipment, and Depreciation — Dep