Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 241

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 241
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 TVA has a   10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority).  Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.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 accounted for seven percent and eight percent, respectively, of TVA's total operating revenues for both the six months ended March 31, 2025 and the six months ended March 31, 2024.  Contract BalancesContract assets represent an entity's right to consideration in exchange for goods and services that the entity has transferred to customers.  TVA did not have any material contract assets at March 31, 2025.  Contract liabilities represent an entity's obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers.  These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation.  See Economic Development Incentives below and Note 11 — Other Long-Term Liabilities — Long-Term Deferred Revenue.

Economic Development Incentives.  Under certain economic development programs, TVA offers incentives to existing and potential power customers in targeted business sectors that make multi-year commitments to invest in the Tennessee Valley.  TVA records those incentives as reductions of revenue.  Incentives recorded as a reduction to revenue were $83 million and $80 million for the three months ended March 31, 2025 and 2024, respectively.  Incentives recorded as a reduction to revenue were $168 million and $153 million for the six months ended March 31, 2025 and 2024, respectively.  Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.  At March 31, 2025, and September 30, 2024, the outstanding unpaid incentives were $194 million and $187 million, respectively.  Incentives that have been paid out may be subject to claw back if the customer fails to meet certain program requirements. 

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