Company: TVC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001376986-25-000044
Chunk: 183

Company: Tennessee Valley Authority
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 1
Chunk 183
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 to credit risk related to the potential nonperformance of counterparties.  In the event of nonperformance by these or other suppliers, TVA believes that replacement uranium concentrate and nuclear fuel services can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.Purchased Power.  TVA acquires power from a variety of power producers through long-term and short-term PPAs as well as through spot market purchases.  Because of the reliability risk of purchased power, TVA requires that the PPAs contain certain counterparty performance assurance requirements to help insure counterparty performance during the term of the agreements.   Other Suppliers.  Solar supply chain constraints, commodity price increases, legislative changes, trade policy issues, and investigations into and affecting solar panel imports have created challenges for the U.S. solar industry.  TVA's existing solar PPA portfolio is not immune from these challenges.  Similar to the experience of the rest of the industry, the majority of TVA's 

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contracted PPAs from previous requests for proposals that are not yet online have been impacted by project delays and price increases.

Derivative Counterparties.  TVA has entered into physical and financial contracts that are classified as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit plan ("pension plan") have entered into derivative contracts for investment purposes.  If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur costs in connection with entering into a replacement transaction.  If a counterparty to the derivative contracts into which the NDT, the ART, or the pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless.  TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions.  At June 30, 2025, all of TVA's commodity derivatives under the FHP, currency swaps, and interest rate swaps were with counterparties whose Moody's credit ratings were A2 or higher.  TVA classifies forward natural gas contracts as derivatives.  At June 30, 2025, the forward natural gas contracts were with counterparties whose ratings ranged from B1 to A1.  

15.  Fair Value Measurements