Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 34

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 15
Chunk 34
---
 indicated: 

Operating Revenues by Customer Type(in millions)Three Months Ended December 3120242023ChangePercent ChangeOperating revenuesLocal power company customers$2,616 $2,487 $129 5.2 %Industries directly served230 217 13 6.0 %Federal agencies and other30 30 — — %Revenue capitalized during pre-commercial plant operations(1)— (3)3 (100.0)%Other revenue44 34 10 29.4 %Total operating revenues$2,920 $2,765 $155 5.6 %

Note

(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.

TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively.  Sales to MLGW and NES each accounted 

42

for eight percent of TVA's total operating revenues for both the three months ended December 31, 2024 and the three months ended December 31, 2023.

TVA's rate structure uses pricing signals to indicate seasons and hours of higher cost to serve its customers and to capture a portion of TVA's fixed costs in fixed charges.  The structure includes three base revenue components: time of use demand charges, time of use energy charges, and a grid access charge ("GAC").  The demand charges are based upon the customer's peak monthly usage.  The energy charges are based on time differentiated kWh used by the customer.  Both of these components can be significantly impacted by weather.  The GAC captures a portion of fixed costs and is offset by a corresponding reduction to the energy rates.  The GAC also reduces the impact of weather variability to the overall rate structure.

TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments.  Under the partnership arrangement, the LPC power contracts automatically renew each year and have a 20-year termination notice.  The partnership arrangements can be terminated under