Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 392

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 392
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 discount, reported in Accounts receivable, net was $3 million and $21 million, respectively.  Loans receivables are reported net of allowances for uncollectible accounts.  See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts..The allowance components, which consist of a collective allowance and specific loans allowance, are based on the risk characteristics of TVA's loans.  Loans that share similar risk characteristics are evaluated on a collective basis in measuring credit losses, while loans that do not share similar risk characteristics with other loans are evaluated on an individual basis.Allowance ComponentsAt September 30(in millions)20252024EnergyRight® loan reserve$1 $1 Economic development loan specific loan reserve1 1 Total allowance for loan losses$2 $2 Prepaid Capital Assets.  TVA makes prepayments to acquire capital assets.  TVA classifies these prepayments as prepaid capital if the funds are refundable, and TVA can receive a credit.EnergyRight® Receivables.  In association with the EnergyRight® program, TVA's LPCs offer financing to end-use customers for the purchase of energy-efficient equipment.  Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years.  TVA purchases the resulting loans receivable from its LPCs.  The loans 

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receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible.  Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings.  The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets.  At both September 30, 2025 and 2024, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $12 million.  See Note 13 — Other Long-Term Liabilities for information regarding the associated financing obligation.

Commodity Contract Derivative Assets.  TVA enters into certain derivative contracts for natural gas that require physical delivery of the contracted quantity of the commodity as well as certain financial derivative contracts to hedge exposure to the price of natural gas.  See Note 16 — Risk Management Activities and