Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 331

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 5
Chunk 331
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 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.

The changes in revenue components are summarized below:

Changes in Revenue Components(in millions)Three Months Ended December 31 20242023ChangeBase revenueEnergy revenue$1,188 $1,112 $76 Demand revenue905 868 37 Grid access charge162 156 6 Long-term partnership credits for LPCs(50)(47)(3)Other charges and credits(2)(160)(140)(20)Total base revenue2,045 1,949 96 Fuel cost recovery830 783 47 Off-system sales1 2 (1)Pre-commercial operations(1)— (3)3 Revenue from sales of electricity2,876 2,731 145 Other revenue44 34 10 Total operating revenues$2,920 $2,765 $155 

Notes

(1)  Represents revenue capitalized during pre-commercial operations at Johnsonville Aeroderivative CT Units 25-28 in the three months ended December 31, 2024 and Paradise CT Units 5-7 in the three months ended December 31, 2023.  Revenue capitalized at Johnsonville Aeroderivative was less than $1 million for the three months ended December 31, 2024.

(2)  Includes economic development credits to promote growth in the Tennessee Valley, hydro preference credits for residential customers of LPCs, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand.  See Note 15 — Revenue.

Operating revenues increased $155 million for the three months ended December 31, 2024, as compared to the same period of the prior year, primarily due to a $96 million increase in base revenue.  The $96 million increase in base revenue was driven by a $54 million increase attributable to higher effective base rates and a $42 million increase attributable to higher sales volume.  The increase in effective base rates