Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 39

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 15
Chunk 39
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31, 2024, and three months ended December 31, 2023, respectively.

(5)  Purchased power (other renewables) includes purchased power from the following renewable sources: solar, wind, biomass, and renewable cogeneration.  TVA acquires Renewable Energy Certificates ("RECs") in connection with certain purchased power transactions and sells some of these RECs to customers. 

In addition to power supply sources included here, TVA offers energy efficiency programs that effectively reduce energy needs.  In 2025, TVA expects to invest $104 million on its energy efficiency programs and anticipates approximately 345 gigawatt hours of net incremental energy efficiency savings.

Interest Expense.  Interest expense and interest rates for the three months ended December 31, 2024, and the three months ended December 31, 2023, were as follows:

Interest Expense and Rates(in millions) Three Months Ended December 31 20242023Percent ChangeInterest expense(1)$280 $262 6.9 %Average blended debt balance(2)$21,509 $20,610 4.4 %Average blended interest rate(3)4.99 %4.89 %2.0 %

Notes

(1)  Includes amortization of debt discounts, issuance, and reacquisition costs, net.

(2)  Includes average balances of long-term power bonds, debt of variable interest entities ("VIEs"), and discount notes.

(3)  Includes interest on long-term power bonds, debt of VIE, and discount notes.

Total interest expense increased $18 million for the three months ended December 31, 2024, as compared to the same period of the prior year.  This increase was primarily driven by a $10 million increase in alternative financing interest due to the 

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new Johnsonville lease financing arrangement and a $6 million increase primarily from higher average rates on long-term debt.  The increase was also driven by a $2 million increase from higher average balances of short-term debt and a $1 million increase in interest related to finance leases, partially offset by a $1 million decrease from lower average rates on short‐term debt.

Liquidity and Capital Resources 

Sources of Liquidity

TVA depends on various sources of liquidity to meet cash needs and contingencies.  TVA's primary sources of liquidity are cash from operations and proceeds from the issuance of short-term debt in the form of discount notes, along with