Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 208

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 2
Chunk 208
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 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 was primarily due to the TVA Board action to approve a 5.25 percent wholesale base rate increase effective October 1, 2024. The higher sales volume was driven primarily by increases within the data processing, hosting, and related services sector.  In addition, there was a $47 million increase in fuel cost recovery revenue 

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driven by a $32 million increase attributable to higher fuel rates and a $15 million increase attributable to higher sales volume.  The higher fuel rates were primarily due to higher coal prices.

See Sales of Electricity above for further discussion of the change in the volume of sales of electricity and Operating Expenses below for further discussion of the change in fuel expense.

Operating Expenses.  Operating expense components as a percentage of total operating expenses for the three months ended December 31, 2024 and December 31, 2023, consisted of the following:

Operating Expenses(in millions)Three Months Ended December 3120242023ChangePercent ChangeOperating expensesFuel$505 $496 $9 1.8 %Purchased power394 359 35 9.7 %Operating and maintenance905 867 38 4.4 %Depreciation and amortization557 521 36 6.9 %Tax equivalents146 133 13 9.8 %Total operating expenses$2,507 $2,376 $131 5.5 %

Fuel expense increased $9 million for the three months ended December 31, 2024, as compared to the same period of the prior year.  This increase was primarily due to an increase in effective fuel rates due to higher coal prices, resulting in a $51 million increase in fuel expense.  Partially offsetting this increase was a decrease of $33 million due primarily to the one-time collection of favorable coal contract price adjustments that occurred in the same period of the prior year.  This collection was deferred and credited to customer rates in subsequent quarters.  Additionally, fuel expense decreased $9 million due to less availability of nuclear generation as compared to the same period of the prior year.

Purchased power expense increased $35 million for the three months ended December 31, 2024, as compared to the same period of the prior year.  This increase was primarily due to less availability of nuclear