Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 213

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 1
Chunk 213
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 each year and have a 20-year termination notice.  The partnership arrangements can be terminated under certain circumstances, including TVA's failure to limit rate increases to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the

agreements.  Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period.  As of June 30, 2025, 148 LPCs had signed the 20-year Partnership Agreement with TVA.

In addition to base revenues, the rate structure includes a separate fuel rate that includes the costs of natural gas, fuel oil, purchased power, coal, emission allowances, nuclear fuel, and other fuel-related commodities; realized gains and losses on derivatives purchased to hedge the costs of such commodities; and payments to states and counties in lieu of taxes ("tax equivalents") associated with the fuel cost adjustments.

TVA is required to charge rates for power that will produce gross revenues sufficient to cover various costs as discussed in Part I, Item I, Business — Rates of the Annual Report.  In August 2024, the TVA Board approved a 5.25 percent wholesale base rate increase (excluding fuel) effective October 1, 2024, primarily due to additional capacity needs and rising costs.  This rate adjustment is estimated to produce an additional $495 million of revenue during 2025.

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Table of Contents                               Draft 4.0                    07/24/2025 5:00 PM

The changes in revenue components are summarized below:

Changes in Revenue Components(in millions)Three Months Ended June 30Nine Months Ended June 30 20252024Change20252024ChangeBase revenueEnergy revenue$1,264 $1,195 $69 $3,855 $3,570 $285 Demand revenue1,009 930 79 3,034 2,765 269 Grid access charge161 155 6 485 466 19 Long-term partnership credits for LPCs(53)(51)(2)(164)(152)(12)Other charges and credits(1)(166)(144)(22)(522)(453)(69)Total base revenue2,215 2,085 130 6,688 6,196 492 Fuel cost recovery1,045 743 302