Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 255

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 2
Chunk 255
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A uses the direct expense method of accounting for these arrangements.  TVA accrues for parts when it takes ownership and for contractor services when they are rendered. Under certain of these agreements, parts received and services rendered exceed payments made.  The current and long-term portions of the resulting obligation are recorded in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's 

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

Consolidated Balance Sheets.  At June 30, 2025, and September 30, 2024, the current amount of accrued long-term service agreements recorded in Accounts payable and accrued liabilities was $11 million and $16 million, respectively.Advances for Construction.  At June 30, 2025, and September 30, 2024, the current amount of advances for construction recorded in Accounts payable and accrued liabilities was $127 million and $60 million, respectively.Commodity Contract Derivative Liabilities.  See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives.

12.  Asset Retirement Obligations

During the nine months ended June 30, 2025, TVA's total asset retirement obligations ("ARO") liability increased $118 million as a result of increases from periodic accretion, partially offset by revisions in estimate and settlements related to retirement projects that were conducted during the period.  The nuclear and non-nuclear accretion amounts were deferred as regulatory assets.  During the nine months ended June 30, 2025, $165 million of the related regulatory assets were amortized into expense as these amounts were collected in rates.  See Note 9 — Regulatory Assets and Liabilities.  TVA maintains investment trusts to help fund its decommissioning obligations.  See Note 15 — Fair Value Measurements — Investment Funds and Note 21 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts.Asset Retirement Obligation Activity(in millions) NuclearNon-nuclearTotalBalance at September 30, 2024$3,814 $6,992 $10,806 (1)Settlements(