Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 349

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part II, Item 2
Chunk 349
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 which may result in positive net cash flows provided by financing activities in future periods.

    Contractual Obligations

TVA has certain obligations and commitments to make future payments under contracts.  TVA's contractual obligations are discussed in the Annual Report in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources, Note 8 — Leases,  Note 10 — Variable Interest Entities, Note 14  — Debt and Other Obligations, Note 20 — Benefit Plans, and Note 22 — Commitments and Contingencies.    During the six months ended March 31, 2025, TVA entered into multiple natural gas contracts totaling $680 million with new commitments from 2025 to 2035, and five new natural gas storage contracts totaling $269 million with commitments from 2025 through 2034.  In addition, TVA entered into a new power purchase agreement ("PPA") totaling $285 million with commitments from 2025 to 2028, and three new nuclear fuel contracts totaling $313 million with new commitments from 2025 through 2035.  TVA also entered into a new lease financing arrangement during the three months ended December 31, 2024.  See Note 10 — Variable Interest Entities.

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Key Initiatives and Challenges 

There have been no material changes to the key initiatives and challenges described in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges of the Annual Report, except as described below.

Cost Reduction Initiatives

TVA’s demand continues to grow, driving the need for significant future capital investment.  TVA must continue to drive efficiencies and cost savings across the enterprise to provide affordable, reliable electricity, while funding the capital investment needed to meet growing demand.  TVA has undertaken a cost optimization initiative designed to reduce planned cost increases by approximately $950 million during the three-year period from 2024 to 2026.  See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges —  Optimum Energy Portfolio in the Annual Report.

This effort has evolved into an Enterprise Transformation Program ("ETP") designed to enable TVA to deliver at least $500 million of sustainable