Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 264

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1
Chunk 264
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, are summarized in the table below:TVA Local Power Company ContractsAt or for the year ended September 30, 2025Contract Arrangements(1)Number of LPCs Revenue from Sales of Electricity to LPCs(in millions)Percentage of Total Operating Revenues20-year termination notice148 $10,636 77.8 %5-year termination notice5 1,698 12.4 %Total153 $12,334 90.2 %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 accounted for nine percent and eight percent, respectively, of TVA's total operating revenues in 2025, 2024, and 2023.Contract Balances    Contract 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 September 30, 2025.      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 13 — 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 $321 million, $318 million, and $330 million for 2025, 2024, and 2023, respectively.