Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 41

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 6
Chunk 41
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 on the unit with the longest license period remaining.  At Watts Bar, the estimated retirement date is based on each unit's license period.  Second, an assumption must be made on the timing of the decommissioning.  TVA has ascribed probabilities to two different decommissioning methods related to its nuclear decommissioning obligation estimate:  the DECON method and the SAFSTOR method.  The DECON method requires that radioactive contamination be removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation.  The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the

facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use.  TVA bases its nuclear decommissioning estimates on site-specific cost studies, which are updated for each of TVA's nuclear units at least every five years.  Changes in probabilities ascribed to the assumptions or the timing of decommissioning can significantly change the present value of TVA's obligations.

    Cost Estimates – There is limited experience with actual decommissioning of large nuclear facilities.  Changes in technology and experience as well as changes in regulations regarding nuclear decommissioning could cause cost estimates to change significantly.  TVA's cost studies assume current technology and regulations. 

    Cost Escalation Rate – TVA uses expected inflation rates over the remaining timeframe until the costs are expected to be incurred to estimate the amount of future cash flows required to satisfy TVA's decommissioning obligations.

    Discount Rate – TVA uses its incremental borrowing rate over a period consistent with the remaining timeframe until the costs are expected to be incurred to calculate the present value of the weighted estimated cash flows required to satisfy TVA's decommissioning obligations.

    The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment.  A 10 percent change in TVA's forecasted costs for nuclear decommissioning activities at September 30, 2025, would have affected the liability by approximately $398 million.

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    Non-Nuclear Decommissioning.   At September 30, 2025, the estimated future non-nuclear decommissioning cost recognized in the financial statements was $6.