Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 652

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1A
Chunk 652
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 actions arising from accidents on TVA's property, challenges to TVA's immunity to certain actions, and challenges to TVA’s authority to set rates and enter into contracts.  Although TVA cannot predict the outcome of the individual matters in which TVA is involved or will become involved, the resolution of these matters could require TVA to make expenditures in excess of established reserves and in substantial amounts.  Similarly, resolution of any such proceedings may require TVA to change its business practices or procedures, incur additional capital or operational costs, change how it operates its fossil-fueled units, cease construction of new natural gas-fired plants, reduce emissions to a greater extent or at a faster pace than TVA had planned, comply with new or additional requirements related to CCR management, cease operation of some coal-fired units, adjust its rates, or terminate or modify contracts.  These events individually or in the aggregate could have a material adverse effect on TVA’s cash flows, results of operations, and financial condition.  

TVA could lose its protected service territory.

TVA’s service area is defined primarily by provisions of law and long-term contracts.  The fence limits the region in which TVA or LPCs that distribute TVA power may provide power.  The anti-cherrypicking provision precludes FERC from ordering TVA to transmit power for others if that power would be consumed within the TVA service area.  State 

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service territory laws limit unregulated third parties’ ability to sell electricity to consumers.  From time to time, there have been efforts to circumvent the protection of the anti-cherrypicking provision.  In addition, the protections afforded by the anti-cherrypicking provision conceivably could be affected by future federal legislation.  If FERC were to limit the application of the anti-cherrypicking provision, or if federal legislation were to eliminate or limit its application, without corresponding legislative modifications to the territorial limitations imposed by the fence, TVA could face increased competition and lose some of its customers.

TVA may become subject to additional NERC requirements.

TVA is subject to federal reliability standards set forth by NERC and approved by FERC.  TVA recognizes that reliability standards and expectations continue to become more complex and stringent for transmission systems.  If TVA fails to comply with the mandatory reliability standards, TVA could be subject to increased compliance obligations, sanctions for failure to comply with NERC requirements, or