Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 415

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part II, Item 5
Chunk 415
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 more specifically described in the

agreements.  Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period.  As of March 31, 2025, 148 LPCs had signed the 20-year Partnership Agreement with TVA.

In addition to base revenues, the rate structure includes a separate fuel rate that includes the costs of natural gas, fuel oil, purchased power, coal, emission allowances, nuclear fuel, and other fuel-related commodities; realized gains and losses on derivatives purchased to hedge the costs of such commodities; and payments to states and counties in lieu of taxes ("tax equivalents") associated with the fuel cost adjustments.

TVA is required to charge rates for power that will produce gross revenues sufficient to cover various costs as discussed in Part I, Item I, Business — Rates of the Annual Report.  In August 2024, the TVA Board approved a 5.25 percent wholesale base rate increase (excluding fuel) effective October 1, 2024, primarily due to additional capacity needs and rising costs.  This rate adjustment is estimated to produce an additional $495 million of revenue during 2025.

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Table of Contents                               Draft 4.0                    04/24/2025 5:00 PM

The changes in revenue components are summarized below:

Changes in Revenue Components(in millions)Three Months Ended March 31Six Months Ended March 31 20252024Change20252024ChangeBase revenueEnergy revenue$1,403 $1,263 $140 $2,591 $2,375 $216 Demand revenue1,120 967 153 2,025 1,835 190 Grid access charge162 155 7 324 311 13 Long-term partnership credits for LPCs(61)(54)(7)(111)(101)(10)Other charges and credits(1)(196)(169)(27)(356)(309)(47)Total base revenue2,428 2,162 266 4,473 4,111 362 Fuel cost recovery1,049 929 120 1,879 1,712 167 Off-system sales1 2 (1)2 4 (2)Pre-commercial operations(2)(2)— (2)(2)(3)1 Revenue from sales