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|                                                                                                                                                     |   |                                                   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|
| A      corporate agency of the United States created by an act of      Congress (State      or other jurisdiction of incorporation or organization) |   | 62-0474417 (IRS      Employer Identification No.) |
| 400      W. Summit Hill DriveKnoxville,      Tennessee (Address      of principal executive offices)                                                |   | 37902 (Zip      Code)                             |

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| Table of Contents                                                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                            |   |
| FORWARD-LOOKING      INFORMATION                                                                                                                | 5 |
| GENERAL INFORMATION                                                                                                                             | 6 |
|                                                                                                                                            |   |
| PART I                                                                                                                                          |
|                                                                                                                                            |   |
| ITEM 1.  BUSINESS                                                                                                                     | 7 |
|    The Corporation                                                                                                               | 7 |
|    Service Area                                                                                                                  | 7 |
|    Customers                                                                                                                     | 8 |
|    Rate Authority                                                                                                                | 10 |
|    Rate Actions                                                                                                                  | 11 |
|    Current Power Supply                                                                                                          | 12 |
|    Future Power Supply                                                                                                           | 17 |
|    Fuel Supply                                                                                                                   | 20 |
|    Transmission                                                                                                                  | 22 |
|    Weather and Seasonality                                                                                                       | 22 |
|    Competition                                                                                                                   | 22 |
|    Research andDevelopment                                                                                                       | 23 |
|    Governance                                                                                                                    | 23 |
|    Regulation                                                                                                                    | 23 |
|    Taxation and Tax      Equivalents                                                                                             | 25 |
|    Environmental Matters                                                                                                         | 25 |
|    Employee Relations                                                                                                            | 34 |
|                                                                                                                                            |   |
| ITEM 1A.  RISK FACTORS                                                                                                                | 34 |
|                                                                                                                                            |   |
| ITEM 1B.  UNRESOLVED STAFF      COMMENTS                                                                                              | 41 |
|                                                                                                                                            |   |
| ITEM 2.  PROPERTIES                                                                                                                   | 41 |
|    Generating Properties                                                                                                         | 41 |
|    Transmission Properties                                                                                                       | 42 |
|    Natural Resource Stewardship      Properties                                                                                  | 42 |
|    Buildings                                                                                                                     | 42 |
|    Disposal of Property                                                                                                          | 42 |
|                                                                                                                                            |   |
| ITEM 3.  LEGAL      PROCEEDINGS                                                                                                       | 43 |
|                                                                                                                                            |   |
| ITEM 4.  SUBMISSION OF MATTERS TO A      VOTE OF SECURITY HOLDERS                                                                     | 43 |
|                                                                                                                                            |   |
| PART II                                                                                                                                         |
|                                                                                                                                            |   |
| ITEM 5.  MARKET FOR REGISTRANT’S      COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY      SECURITIES | 44 |
|                                                                                                                                            |   |
| ITEM 6.  SELECTED FINANCIAL      DATA                                                                                                 | 44 |
|                                                                                                                                            |   |
| ITEM 7.  MANAGEMENT’S DISCUSSION AND      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF    OPERATIONS                          | 45 |
|    Business Overview                                                                                                             | 45 |
|    Executive Summary                                                                                                             | 46 |
|    Challenges During 2009                                                                                                        | 47 |
|    Future Challenges                                                                                                             | 49 |
|    Liquidity and Capital      Resources                                                                                          | 51 |
|    Summary Cash Flows                                                                                                            | 55 |
|    Results of Operations                                                                                                         | 58 |
|    Off-Balance Sheet      Arrangements                                                                                           | 63 |
|    Critical Accounting Policies and      Estimates                                                                               | 64 |
|    Changes in Ratemaking Impacting      Accounting                                                                               | 69 |
|    Fair Value Measurements                                                                                                       | 70 |
|    New Accounting Standards and      Interpretations                                                                             | 72 |
|    Legislative and Regulatory      Matters                                                                                       | 74 |
|    Environmental Matters                                                                                                         | 75 |
|    Legal Proceedings                                                                                                             | 75 |
|    Risk Management      Activities                                                                                               | 76 |
|    Subsequent Events                                                                                                             | 80 |
|                                                                                                                                            |   |
| ITEM 7A.  QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET RISK                                                             | 80 |
|                                                                                                                                            |   |
| ITEM 8.  FINANCIAL STATEMENTS      AND SUPPLEMENTARY DATA                                                                             | 81 |
|    Statements of Income                                                                                                          | 81 |
|    Balance Sheets                                                                                                                | 82 |
|    Statements of Cash Flows                                                                                                      | 83 |
|    Statements of Changes in Proprietary      Capital                                                                             | 84 |
|    Notes to Financial      Statements                                                                                            | 85 |
|    Reports of Independent Registered Public      Accounting Firm                                                                 | 140 |
|                                                                                                                                            |   |
| ITEM 9.  CHANGES IN AND      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURE                               | 142 |
|                                                                                                                                            |   |
| ITEM 9A.  CONTROLS AND      PROCEDURES                                                                                                | 142 |

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|                                                                                                                         |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|
| ITEM 9B.  OTHER      INFORMATION                                                                                   | 144    |
|                                                                                                                         |   |
| PART III                                                                                                                     |
|                                                                                                                         |   |
| ITEM 10.  DIRECTORS, EXECUTIVE      OFFICERS AND CORPORATE GOVERNANCE                                              | 145    |
|    Directors                                                                                                  | 145    |
|    Executive Officers                                                                                         | 146    |
|    Disclosure and Financial Code of      Ethics                                                               | 149    |
|    Committees of the TVA Board                                                                                | 149    |
|                                                                                                                         |   |
| ITEM 11.  EXECUTIVE      COMPENSATION                                                                              | 150    |
|    Compensation Discussion and      Analysis                                                                  | 150    |
|    Executive Compensation Tables and Narrative      Disclosures                                               | 160    |
|    Termination Compensation and Other      Arrangements                                                       | 167    |
|    Other Agreements                                                                                           | 168    |
|    Director Compensation                                                                                      | 168    |
|    Compensation Committee Interlocks and      Insider Participation                                           | 170    |
|    Compensation Committee Report                                                                              | 170    |
|                                                                                                                         |   |
| ITEM 12.  SECURITY OWNERSHIP OF      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER      MATTERS | 170    |
|                                                                                                                         |   |
| ITEM 13.  CERTAIN      RELATIONSHIPS AND RELATED  TRANSACTIONS, AND DIRECTOR      INDEPENDENCE           | 170    |
| Director Independence                                                                                                        | 170    |
| Related Party      Transactions                                                                                              | 170    |
|                                                                                                                         |   |
| ITEM 14.  PRINCIPAL      ACCOUNTANT FEES AND SERVICES                                                              | 172    |
|                                                                                                                         |   |
| PART IV                                                                                                                      |
|                                                                                                                         |   |
| ITEM 15.  EXHIBITS, FINANCIAL      STATEMENT SCHEDULES                                                             | 174    |
|                                                                                                                         |   |
| Signatures                                                                                                                   | 178    |
| Exhibit Index                                                                                                                | 179    |

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| GLOSSARY      OF COMMON ACRONYMS                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| The      following terms or acronyms frequently used in this Annual Report on Form      10-K (the “Annual Report”) are defined below: |
|                                                                                                                                              |
| Term or Acronym                                                                                                                                   |   | Definition |
| ADEM                                                                                                                                              |   | Alabama      Department of Environmental Management |
| AFUDC                                                                                                                                             |   | Allowance      for funds used during construction |
| ART                                                                                                                                               |   | Asset      Retirement Trust |
| ARO                                                                                                                                               |   | Asset      retirement obligation |
| CAA                                                                                                                                               |   | Clean      Air Act |
| CAIR                                                                                                                                              |   | Clean      Air Interstate Rule |
| CCP                                                                                                                                               |   | Coal      combustion products |
| CERCLA                                                                                                                                            |   | Comprehensive      Environmental Response, Compensation, and Liability Act |
| CERES                                                                                                                                             |   | Combined      Efficiency and Renewable Electricity Standard |
| CO2                                                                                                                                               |   | Carbon      dioxide |
| COLA                                                                                                                                              |   | Cost      of living adjustment |
| CVA                                                                                                                                               |   | Credit      valuation adjustment |
| CY                                                                                                                                                |   | Calendar      year |
| DOE                                                                                                                                               |   | Department      of Energy |
| EPA                                                                                                                                               |   | Environmental      Protection Agency |
| EIS                                                                                                                                               |   | Environmental      Impact Statement |
| FASB                                                                                                                                              |   | Financial      Accounting Standards Board |
| FCA                                                                                                                                               |   | Fuel      cost adjustment |
| FERC                                                                                                                                              |   | Federal      Energy Regulatory Commission |
| FPA                                                                                                                                               |   | Federal      Power Act |
| FTP                                                                                                                                               |   | Financial      Trading Program |
| FWS                                                                                                                                               |   | Fish      and Wildlife Service |
| GAAP                                                                                                                                              |   | Accounting      principles generally accepted in the United States of    America |
| GHG                                                                                                                                               |   | Greenhouse      gas |
| GWh                                                                                                                                               |   | Gigawatt      hour(s) |
| kWh                                                                                                                                               |   | Kilowatt      hour(s) |
| LIBOR                                                                                                                                             |   | London      Interbank Offered Rate |
| MACT                                                                                                                                              |   | Maximum      achievable control technology |
| MtM                                                                                                                                               |   | Mark-to-market |
| MW                                                                                                                                                |   | Megawatt |
| Moody’s                                                                                                                                     |   | Moody’s      Investors Service, Inc. |
| mmBtu                                                                                                                                             |   | Million      British thermal unit(s) |
| NDT                                                                                                                                               |   | Nuclear      Decommissioning Trust |
| NEPA                                                                                                                                              |   | National      Environmental Policy Act |
| NOx                                                                                                                                               |   | Nitrogen      oxides |
| NRC                                                                                                                                               |   | Nuclear      Regulatory Commission |
| NYMEX                                                                                                                                             |   | New      York Mercantile Exchange |
| PCB                                                                                                                                               |   | Polychlorinated      biphenyls |
| REIT                                                                                                                                              |   | Real      estate investment trust |
| RFP                                                                                                                                               |   | Request      for proposal |
| SCR                                                                                                                                               |   | Selective      catalytic reduction systems |
| SERP                                                                                                                                              |   | Supplemental      executive retirement plan |
| SO2                                                                                                                                               |   | Sulfur      dioxide |
| S&P                                                                                                                                           |   | Standard      & Poor’s Rating Services |
| SSPL                                                                                                                                              |   | Seven      States Power Corporation |
| SSSL                                                                                                                                              |   | Seven      States Southaven, LLC |
| TDEC                                                                                                                                              |   | Tennessee      Department of Environment and Conservation |
| TVARS                                                                                                                                             |   | Tennessee      Valley Authority RetirementSystem |

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Table of Contents

FORWARD-LOOKING INFORMATION

|   | • | New      or changed laws, regulations, and administrative orders, including those      related to environmental matters, and the costs of complying with these      new or changed, as well as existing, laws, regulations, and administrative      orders; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Unplanned      contributions to TVA’s pension or other post-retirement      benefit plans or to TVA’s nuclear decommissioning trust      (“NDT”); |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Significant      delays or cost overruns associated with the cleanup and recovery      activities associated with the ash spill at TVA’s Kingston Fossil Plant      (“Kingston”) or in construction of generation and transmission      assets; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Fines,      penalties, and settlements associated with the Kingston ash      spill; |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | The      outcome of legal and administrative proceedings, including, but not      limited to, proceedings involving the Kingston ash spill and the North      Carolina public nuisance case; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Significant      changes in demand for electricity; |
|--------|---------|-----------------------------------------------------|

|   | • | Loss      of customers; |
|--------|---------|-------------------------|

|   | • | The      performance or failure of TVA’s generation, transmission, and related      assets (including facilities such as coal combustion product      facilities); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Disruption      of fuel supplies, which may result from, among other things, weather      conditions, production or transportation difficulties, labor challenges,      or environmental regulations affecting TVA’s fuel    suppliers; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Purchased      power price volatility and disruption of purchased power      supplies; |
|--------|---------|----------------------------------------------------------------------------------------|

|   | • | Events      at transmission lines and other facilities not operated by TVA, including      those that affect the supply of water to TVA’s generation      facilities; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Inability      to obtain regulatory approval for the construction of    assets; |
|--------|---------|---------------------------------------------------------------------------------|

|   | • | Weather      conditions; |
|--------|---------|--------------------------|

|   | • | Events      at a nuclear facility, even one that is not operated by or licensed to      TVA; |
|--------|---------|----------------------------------------------------------------------------------------------|

|   | • | Catastrophic      events such as fires, earthquakes, solar events, floods, tornadoes,      pandemics, wars, terrorist activities, and other similar events,      especially if these events occur in or near TVA’s service      area; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Reliability      and creditworthiness ofcounterparties; |
|--------|---------|---------------------------------------------------------|

|   | • | Changes      in the market price of commodities such as coal, uranium, natural gas,      fuel oil, crude oil, construction materials, electricity, and emission      allowances; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Changes      in the market price of equity securities, debt securities, and other      investments; |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | • | Changes      in interest rates, currency exchange rates, and inflation      rates; |
|--------|---------|------------------------------------------------------------------------------------|

|   | • | Increases      in TVA’s financial liability for decommissioning its nuclear facilities      and retiring other assets; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | Changes      in the market for TVA’s debt, changes in TVA’s credit rating, or      limitations on TVA’s ability to borrowmoney; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Changes      and volatility in the economy and financial  markets; |
|--------|---------|--------------------------------------------------------------------|

|   | • | Inability      to eliminate identified deficiencies in TVA’s systems, standards,      controls, and corporate culture; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | Ineffectiveness      of TVA’s disclosure controls and procedures and its internal control over      financial reporting; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------|

|   | • | Changes      in accounting standards including any change that would eliminate TVA’s      ability to use regulatoryaccounting; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Problems      attracting and retaining a qualifiedworkforce; |
|--------|---------|--------------------------------------------------------------|

|   | • | Changes      in technology; |
|--------|---------|-----------------------------|

|   | • | Differences      between estimates of revenues and expenses and actual revenues and      expenses incurred; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | • | Unforeseeable      events. |
|--------|---------|----------------------------|

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Table of Contents

GENERAL INFORMATION

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Table of Contents

 PART I

ITEM 1.  BUSINESS

The Corporation

Service Area

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Table of Contents

| Operating      RevenuesFor      the years ended September 30(in      millions) |   |
|--------------------------------------------------------------------------------|--------|
|                                                                           |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Electricity      sales by state                                                |   |   |   |   |   |   |   |   |   |
|     Alabama                                                |   | $ | 1,526 |   |   | $ | 1,410 |   |   | $ | 1,264 |   |
|     Georgia                                                |   |   | 264 |   |   |   | 238 |   |   |   | 206 |   |
|     Kentucky                                               |   |   | 1,252 |   |   |   | 1,192 |   |   |   | 1,084 |   |
|     Mississippi                                            |   |   | 1,017 |   |   |   | 923 |   |   |   | 804 |   |
|     North      Carolina                                    |   |   | 58 |   |   |   | 50 |   |   |   | 58 |   |
|     Tennessee                                              |   |   | 6,970 |   |   |   | 6,389 |   |   |   | 5,740 |   |
|     Virginia                                               |   |   | 51 |   |   |   | 37 |   |   |   | 7 |   |
|       Subtotal                                   |   |   | 11,138 |   |   |   | 10,239 |   |   |   | 9,163 |   |
| Sale      for resale                                                           |   |   | 4 |   |   |   | 13 |   |   |   | 17 |   |
|      Subtotal                                         |   |   | 11,142 |   |   |   | 10,252 |   |   |   | 9,180 |   |
| Other      revenues                                                            |   |   | 113 |   |   |   | 130 |   |   |   | 146 |   |
| Operating      revenues                                                        |   | $ | 11,255 |   |   | $ | 10,382 |   |   | $ | 9,326 |   |

Customers

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Table of Contents

| Operating      Revenues by Customer TypeFor      the years ended September 30(in      millions) |   |
|-------------------------------------------------------------------------------------------------|--------|
|                                                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                            |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Municipalities      and cooperatives                                                            |   | $ | 9,644 |   |   | $ | 8,659 |   |   | $ | 7,847 |   |
| Industries      directly served                                                                 |   |   | 1,367 |   |   |   | 1,472 |   |   |   | 1,221 |   |
| Federal      agencies and other                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|    Federal      agencies directly served                                         |   |   | 127 |   |   |   | 108 |   |   |   | 95 |   |
|    Off-system      sales                                                         |   |   | 4 |   |   |   | 13 |   |   |   | 17 |   |
| Subtotal                                                                                        |   |   | 11,142 |   |   |   | 10,252 |   |   |   | 9,180 |   |
| Other      revenues                                                                             |   |   | 113 |   |   |   | 130 |   |   |   | 146 |   |
| Operating      revenues                                                                         |   | $ | 11,255 |   |   | $ | 10,382 |   |   | $ | 9,326 |   |

|   | • | Contracts      that require five years’ notice toterminate; |
|--------|---------|-------------------------------------------------------------------|

|   | • | Contracts      that require 10 years’ notice to terminate;and |
|--------|---------|---------------------------------------------------------------------|

|   | • | Contracts      that require 15 years’ notice toterminate. |
|--------|---------|-----------------------------------------------------------------|

| TVA      Distributor Customer ContractsAs      of September 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Contract      Arrangements*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Number      of Distributor Customers |   |   | Sales      to DistributorCustomers      in 2009 |   |   | Percentage      of Total Operating Revenues in 2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | (in      millions) |   |
| 15-year      termination notice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 5 |   |   | $ | 105 |   |   |   | 0.9 | % |
| 10-year      termination notice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 48 |   |   |   | 3,174 |   |   |   | 28.2 | % |
| 5-year      termination notice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 103 |   |   |   | 6,310 |   |   |   | 56.1 | % |
| Termination      notice given**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 2 |   |   |   | 55 |   |   |   | 0.5 | % |
|      Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 158 |   |   | $ | 9,644 |   |   |   | 85.7 | % |
| Notes*Ordinarily      the distributor customer and TVA have the same termination notice period;      however, in contracts with six of the distributor customers with five-year      termination notices, TVA has a 10-year termination notice (which      becomes a five-year termination notice if TVA loses its discretionary      wholesale rate-setting authority). Also, under TVA’s contract with      Bristol Virginia Utilities, a five-year termination notice may not be      given until January 2018.**One      contract is due to terminate in December 2009, and the second is due to      terminate in January 2010.  |   |

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Table of Contents

Rate Authority

|   | • | Operation,      maintenance, and administration of its power  system; |
|--------|---------|-----------------------------------------------------------------------|

|   | • | Payments      to states and counties in lieu of taxes (“tax    equivalents”); |
|--------|---------|-------------------------------------------------------------------------------------------|

|   | • | Debt      service on outstandingindebtedness; |
|--------|---------|-----------------------------------------------|

|   | • | Payments      to the U.S. Treasury in repayment of and as a return on the government’s      appropriation investment in TVA’s power facilities (the “Power Facility      Appropriation Investment”); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Such      additional margin as the TVA Board may consider desirable for investment      in power system assets, retirement of outstanding bonds, notes, or other      evidences of indebtedness (“Bonds”) in advance of maturity, additional      reduction of the Power Facility Appropriation Investment, and other      purposes connected with TVA’s powerbusiness. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|   | • | Fuel      and purchased power costs; |
|--------|---------|--------------------------------------|

|   | • | Operating      and maintenance costs; |
|--------|---------|---------------------------------------|

|   | • | Tax      equivalents; and |
|--------|---------|---------------------------|

|   | • | Debt      service coverage. |
|--------|---------|-----------------------------|

Rate Actions

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Table of Contents

Current Power Supply

| Power      Supply from TVA-Operated Generation FacilitiesFor      the years ended September 30(millions      of kWh) |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                 |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Coal-fired                                                                                                           |   |   | 76,794 |   |   |   | 53 | % |   |   | 98,752 |   |   |   | 62 | % |   |   | 100,169 |   |   |   | 64 | % |   |   | 99,598 |   |   |   | 64 | % |   |   | 98,361 |   |   |   | 62 | % |
| Nuclear                                                                                                              |   |   | 53,047 |   |   |   | 37 | % |   |   | 51,371 |   |   |   | 33 | % |   |   | 46,441 |   |   |   | 30 | % |   |   | 45,313 |   |   |   | 29 | % |   |   | 45,156 |   |   |   | 28 | % |
| Hydroelectric                                                                                                        |   |   | 11,421 |   |   |   | 8 | % |   |   | 6,685 |   |   |   | 4 | % |   |   | 9,047 |   |   |   | 6 | % |   |   | 9,961 |   |   |   | 6 | % |   |   | 15,723 |   |   |   | 10 | % |
| Combustion      turbine and diesel generators                                                                        |   |   | 3,481 |   |   |   | 2 | % |   |   | 1,386 |   |   |   | 1 | % |   |   | 705 |   |   |   | <1 | % |   |   | 613 |   |   |   | <1 | % |   |   | 595 |   |   |   | <1 | % |
| Renewable      resources (non-hydro)                                                                                 |   |   | 29 |   |   |   | <1 | % |   |   | 39 |   |   |   | <1 | % |   |   | 27 |   |   |   | <1 | % |   |   | 36 |   |   |   | <1 | % |   |   | 47 |   |   |   | <1 | % |
| Total                                                                                                                |   |   | 144,772 |   |   |   | 100 | % |   |   | 158,233 |   |   |   | 100 | % |   |   | 156,389 |   |   |   | 100 | % |   |   | 155,521 |   |   |   | 100 | % |   |   | 159,882 |   |   |   | 100 | % |
|                                                                                                                 |   |

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Table of Contents

| SUMMER      NET CAPABILITY1As      of September 30, 2009                                                                                                                                                                                                                                                                                                                                     |                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
|  Source      of Capability                                                                                                                                                                                                                                                                                                                                                                   |  Location      |   | Number of      Units |   |   | Summer      Net Capability (MW) |   |   | Date      First Unit Placed in Service |   |   | Date      Last Unit Placed in Service |   |
| TVA-OPERATED GENERATING      FACILITIES                                                                                                                                                                                                                                                                                                                                                           |                |   |   |   |   |   |   |   |   |   |   |   |
| Coal-Fired                                                                                                                                                                                                                                                                                                                                                                                        |                |   |   |   |   |   |   |   |   |   |   |   |   |
|     Allen                                                                                                                                                                                                                                                                                                                                                                     | Tennessee           |   |   | 3 |   |   |   | 741 |   |   |   | 1959 |   |   |   | 1959 |   |
|     Bull      Run                                                                                                                                                                                                                                                                                                                                                             | Tennessee           |   |   | 1 |   |   |   | 870 |   |   |   | 1967 |   |   |   | 1967 |   |
|     Colbert                                                                                                                                                                                                                                                                                                                                                                   | Alabama             |   |   | 5 |   |   |   | 1,184 |   |   |   | 1955 |   |   |   | 1965 |   |
|     Cumberland                                                                                                                                                                                                                                                                                                                                                                | Tennessee           |   |   | 2 |   |   |   | 2,470 |   |   |   | 1973 |   |   |   | 1973 |   |
|     Gallatin                                                                                                                                                                                                                                                                                                                                                                  | Tennessee           |   |   | 4 |   |   |   | 976 |   |   |   | 1956 |   |   |   | 1959 |   |
|     John      Sevier                                                                                                                                                                                                                                                                                                                                                          | Tennessee           |   |   | 4 |   |   |   | 704 |   |   |   | 1955 |   |   |   | 1957 |   |
|     Johnsonville                                                                                                                                                                                                                                                                                                                                                              | Tennessee           |   |   | 10 |   |   |   | 1,206 |   |   |   | 1951 |   |   |   | 1959 |   |
|     Kingston                                                                                                                                                                                                                                                                                                                                                                  | Tennessee           |   |   | 9 |   |   |   | 1,425 |   |   |   | 1954 |   |   |   | 1955 |   |
|     Paradise                                                                                                                                                                                                                                                                                                                                                                  | Kentucky            |   |   | 3 |   |   |   | 2,201 |   |   |   | 1963 |   |   |   | 1970 |   |
|     Shawnee                                                                                                                                                                                                                                                                                                                                                                   | Kentucky            |   |   | 10 |   |   |   | 1,330 |   |   |   | 1953 |   |   |   | 1956 |   |
|     Widows      Creek                                                                                                                                                                                                                                                                                                                                                         | Alabama             |   |   | 8 |   |   |   | 1,604 |   |   |   | 1952 |   |   |   | 1965 |   |
| Total      Coal-Fired                                                                                                                                                                                                                                                                                                                                                                             |                |   |   | 59 |   |   |   | 14,711 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear                                                                                                                                                                                                                                                                                                                                                                                           |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Browns      Ferry                                                                                                                                                                                                                                                                                                                                                         | Alabama             |   |   | 3 |   |   |   | 3,242 |   |   |   | 1974 |   |   |   | 1977 |   |
|     Sequoyah                                                                                                                                                                                                                                                                                                                                                                  | Tennessee           |   |   | 2 |   |   |   | 2,282 |   |   |   | 1981 |   |   |   | 1982 |   |
|     Watts      Bar                                                                                                                                                                                                                                                                                                                                                            | Tennessee           |   |   | 1 |   |   |   | 1,100 |   |   |   | 1996 |   |   |   | 1996 |   |
| Total      Nuclear                                                                                                                                                                                                                                                                                                                                                                                |                |   |   | 6 |   |   |   | 6,624 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hydroelectric                                                                                                                                                                                                                                                                                                                                                                                     |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Conventional      Plants                                                                                                                                                                                                                                                                                                                                                  | Alabama             |   |   | 36 |   |   |   | 1,188 |   |   |   | 1925 |   |   |   | 1962 |   |
|                                                                                                                                                                                                                                                                                                                                                                                              | Georgia             |   |   | 2 |   |   |   | 35 |   |   |   | 1931 |   |   |   | 1956 |   |
|                                                                                                                                                                                                                                                                                                                                                                                              | Kentucky            |   |   | 5 |   |   |   | 225 |   |   |   | 1944 |   |   |   | 1948 |   |
|                                                                                                                                                                                                                                                                                                                                                                                              | North      Carolina |   |   | 6 |   |   |   | 495 |   |   |   | 1940 |   |   |   | 1956 |   |
|                                                                                                                                                                                                                                                                                                                                                                                              | Tennessee           |   |   | 60 |   |   |   | 1,898 |   |   |   | 1912 |   |   |   | 1972 |   |
|     Pumped      Storage                                                                                                                                                                                                                                                                                                                                                       | Tennessee           |   |   | 4 |   |   |   | 1,653 |   |   |   | 1978 |   |   |   | 1979 |   |
| Total      Hydroelectric                                                                                                                                                                                                                                                                                                                                                                          |                |   |   | 113 |   |   |   | 5,494 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural Gas & Oil-Fired2                                                                                                                                                                                                                                                                                                                                                                      |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Allen                                                                                                                                                                                                                                                                                                                                                                     | Tennessee           |   |   | 20 |   |   |   | 452 |   |   |   | 1971 |   |   |   | 1972 |   |
|     Brownsville                                                                                                                                                                                                                                                                                                                                                               | Tennessee           |   |   | 4 |   |   |   | 460 |   |   |   | 2008 |   |   |   | 2008 |   |
|     Caledonia                                                                                                                                                                                                                                                                                                                                                                 | Mississippi         |   |   | 3 |   |   |   | 768 |   |   |   | 2007 |   |   |   | 2007 |   |
|     Colbert                                                                                                                                                                                                                                                                                                                                                                   | Alabama             |   |   | 8 |   |   |   | 384 |   |   |   | 1972 |   |   |   | 1972 |   |
|     Gallatin                                                                                                                                                                                                                                                                                                                                                                  | Tennessee           |   |   | 8 |   |   |   | 588 |   |   |   | 1975 |   |   |   | 2000 |   |
|     Gleason                                                                                                                                                                                                                                                                                                                                                                   | Tennessee           |   |   | 3 |   |   |   | 494 |   |   |   | 2007 |   |   |   | 2007 |   |
|     Johnsonville                                                                                                                                                                                                                                                                                                                                                              | Tennessee           |   |   | 20 |   |   |   | 1,104 |   |   |   | 1975 |   |   |   | 2000 |   |
|     Kemper                                                                                                                                                                                                                                                                                                                                                                    | Mississippi         |   |   | 4 |   |   |   | 304 |   |   |   | 2001 |   |   |   | 2001 |   |
|     Lagoon      Creek                                                                                                                                                                                                                                                                                                                                                         | Tennessee           |   |   | 12 |   |   |   | 932 |   |   |   | 2002 |   |   |   | 2002 |   |
|     Marshall      County                                                                                                                                                                                                                                                                                                                                                      | Kentucky            |   |   | 8 |   |   |   | 608 |   |   |   | 2007 |   |   |   | 2007 |   |
|     Southaven                                                                                                                                                                                                                                                                                                                                                                 | Mississippi         |   |   | 3 |   |   |   | 777 |   |   |   | 2008 |   |   |   | 2008 |   |
| Total      Natural Gas & Oil-Fired                                                                                                                                                                                                                                                                                                                                                            |                |   |   | 93 |   |   |   | 6,871 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diesel Generator                                                                                                                                                                                                                                                                                                                                                                                  |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Meridian                                                                                                                                                                                                                                                                                                                                                                  | Mississippi         |   |   | 5 |   |   |   | 9 |   |   |   | 1998 |   |   |   | 1998 |   |
|     Albertville                                                                                                                                                                                                                                                                                                                                                               | Alabama             |   |   | 4 |   |   |   | 4 |   |   |   | 2000 |   |   |   | 2000 |   |
| Total      Diesel Generators                                                                                                                                                                                                                                                                                                                                                                      |                |   |   | 9 |   |   |   | 13 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Renewable Resources    (non-hydro)                                                                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |   |   | 3 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      TVA Generating Facilities                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   | 33,716 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                              |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| POWER PURCHASE AND OTHER      AGREEMENTS                                                                                                                                                                                                                                                                                                                                                          |                |   |   |   |   |   |   | 2,774 |   |   |   |   |   |   |   |   |   |
| Total      Summer Net Capability                                                                                                                                                                                                                                                                                                                                                                  |                |   |   |   |   |   |   | 36,490 |   |   |   |   |   |   |   |   |   |
| Notes(1) Net      capability is defined as the ability of an electric system, generating      unit, or other system component to carry or generate power for a specified      time period.(2) See      Item 1, Business — Current Power Supply —      Combustion Turbine      Facilities for a discussion of the natural gas and oil-fired      facilities operated by TVA. |                |

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| TVA      Nuclear PowerAs      of September 30, 2009  |                                       |
|-----------------------------------------------------------|--------------------------------------------|
|   Nuclear      Unit                             |   Status                         |   | Installed      Capacity (MW) |   |   | Net      Capacity Factor for 2009 |   |   | Date      of Expiration of Operating License |   |   | Date      of Expiration of Construction Permit |   |
|                                                      |                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Sequoyah      Unit 1                                      | Operating                                  |   |   | 1,221 |   |   |   | 87.3 |   |   |   | 2020 |   |   |   | — |   |
| Sequoyah      Unit 2                                      | Operating                                  |   |   | 1,221 |   |   |   | 93.6 |   |   |   | 2021 |   |   |   | — |   |
| Browns      Ferry Unit 1                                  | Operating                                  |   |   | 1,150 |   |   |   | 80.6 |   |   |   | 2033 |   |   |   | — |   |
| Browns      Ferry Unit 2                                  | Operating                                  |   |   | 1,190 |   |   |   | 79.2 |   |   |   | 2034 |   |   |   | — |   |
| Browns      Ferry Unit 3                                  | Operating                                  |   |   | 1,190 |   |   |   | 95.1 |   |   |   | 2036 |   |   |   | — |   |
| Watts      Bar Unit 1                                     | Operating                                  |   |   | 1,230 |   |   |   | 96.0 |   |   |   | 2035 |   |   |   | — |   |
| Watts      Bar Unit 2                                     | Construction      resumed in December 2007 |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 2013 |   |

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|   | • | Calpine Energy Services,      L.P.  TVA has contracted with Calpine Energy Services,      L.P. (“Calpine”) for 720 MW of summer net capability from a natural      gas-fired generating plant located at Decatur, Alabama.  This      contract expires on August 31, 2012.  In addition, TVA has      contracted with Calpine for 500 MW of summer net capability from a natural      gas-fired generating plant located in Morgan County,      Alabama.  This contract expires on December 31,      2011. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Suez Energy Marketing NA,      Inc.  TVA has contracted with Suez Energy Marketing NA,      Inc. (“Suez”) for 690 MW of summer net capability from a natural gas-fired      generating plant located near Ackerman, Mississippi.  TVA’s      contract with Suez expires on December 31,2012. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Choctaw Generation,      L.P.  TVA has contracted with Choctaw Generation, L.P.      (“Choctaw”) for 440 MW of summer net capability from a lignite-fired      generating plant in Chester, Mississippi.  TVA’s contract with      Choctaw expires on March 31, 2032.  See Item 7, Management's      Discussion and Analysis of Financial Condition and Results of Operations      — Risk Management      Activities —      Credit Risk. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Alcoa Power Generating,      Inc.  Four hydroelectric plants owned by Alcoa Power      Generating, Inc. (“APGI”) are operated in coordination with the TVA      system.  Under contractual arrangements with APGI, which      terminate on June 20, 2010, TVA currently purchases and dispatches all      electricity generated at these facilities and uses the power to supply      Alcoa’s energy needs.  TVA may be the net purchaser or net      supplier under these arrangements. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Invenergy TN      LLC.  TVA has contracted with Invenergy TN LLC for 27 MW of wind      energy generation from 15 wind turbine generators located on Buffalo      Mountain near Oak Ridge, Tennessee.  Because of the nature of      intermittent wind conditions in the TVA service area, these generators      provide energy benefits but are not included in TVA’s summer net      capability total.  TVA's contract with Invenergy TN LLC expires      on December 31, 2024. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Southeastern Power      Administration.  TVA, along with others, has contracted      with the Southeastern Power Administration (“SEPA”) to obtain power from      eight U.S. Army Corps of Engineers (“USACE”) hydroelectric facilities on      the Cumberland River system.  The agreement with SEPA can be      terminated upon three years’ notice, but this notice of termination may      not become effective prior to June 30, 2017.  The contract      requires SEPA to provide TVA an annual minimum of 1,500 hours of power for      each megawatt of TVA’s 405 MW allocation, and all surplus power from the      Cumberland River system.  Because hydroelectric production has      been reduced at two of the hydroelectric facilities on the Cumberland      River system due to repair work being performed by USACE at those two      facilities and because of reductions in the summer stream flow on the      Cumberland River, SEPA declared “force majeure” on February 25,      2007.  SEPA then instituted an emergency operating plan that,      among other things, eliminates SEPA’s obligation to provide TVA and other      affected customers with a minimum amount of power.  It is      unclear how long the emergency operating plan will remain in      effect. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Purchased      Power*For      the years ended September 30                                                                                                                                                                                                                                     |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Millions      of kWh                                                                                                                                                                                                                                                                                |   |   | 22,088 |   |   |   | 20,887 |   |   |   | 22,141 |   |   |   | 19,019 |   |   |   | 14,892 |   |
| Percent      of TVA’s Total Power Supply                                                                                                                                                                                                                                                      |   |   | 13.1 | % |   |   | 11.6 | % |   |   | 12.4 | % |   |   | 10.9 | % |   |   | 8.5 | % |
| Note* Purchased      power amounts for years 2005 and 2006 have been adjusted to remove APGI      purchases and include them as a credit to power sales.  Purchased      power amounts      include generation from Caledonia, which is currently a leased facility      operated by TVA. |   |

Future Power Supply

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Fuel Supply

| Fuel      Purchases for TVA-Operated FacilitiesFor      the years ended September 30(in      millions)  |   |
|--------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                         |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Coal                                                                                                         |   | $ | 2,019 |   |   | $ | 2,110 |   |   | $ | 1,922 |   |   | $ | 1,835 |   |   | $ | 1,495 |   |
| Natural      gas                                                                                             |   |   | 133 |   |   |   | 131 |   |   |   | 62 |   |   |   | 60 |   |   |   | 63 |   |
| Fuel      oil                                                                                                |   |   | 38 |   |   |   | 61 |   |   |   | 22 |   |   |   | 46 |   |   |   | 28 |   |
| Uranium                                                                                                      |   |   | 162 |   |   |   | 71 |   |   |   | 121 |   |   |   | 71 |   |   |   | 44 |   |
|    Total                                                                                      |   | $ | 2,352 |   |   | $ | 2,373 |   |   | $ | 2,127 |   |   | $ | 2,012 |   |   | $ | 1,630 |   |

| Fuel      Expense Per kWh*For      the years ended September 30(cents/kWh)  |   |
|----------------------------------------------------------------------------------|--------|
|                                                                             |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Coal                                                                             |   |   | 2.75 |   |   |   | 2.31 |   |   |   | 2.09 |   |   |   | 2.02 |   |   |   | 1.65 |   |
| Natural      gas and fuel oil                                                    |   |   | 3.91 |   |   |   | 9.73 |   |   |   | 9.62 |   |   |   | 10.65 |   |   |   | 11.44 |   |
| Nuclear                                                                          |   |   | 0.50 |   |   |   | 0.50 |   |   |   | 0.39 |   |   |   | 0.38 |   |   |   | 0.39 |   |
| Average      fuel cost per kWh net thermal generation from all    sources   |   |   | 1.92 |   |   |   | 1.76 |   |   |   | 1.59 |   |   |   | 1.54 |   |   |   | 1.30 |   |
| Note* Excludes      amounts related to the fuel cost adjustment deferrals.  |   |

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| Natural      Gas Purchases for Tolling PlantsFor      the years ended September 30  |   |
|------------------------------------------------------------------------------------------|--------|
|                                                                                     |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of Fuel (in millions)                                                          |   | $ | 255 |   |   | $ | 457 |   |   | $ | 430 |   |   | $ | 288 |   |   | $ | 159 |   |
| Average      Fuel Expense (cents/kWh)                                                    |   |   | 6.54 |   |   |   | 12.26 |   |   |   | 5.51 |   |   |   | 6.07 |   |   |   | 6.21 |   |

|   | • | 40      percent from the Illinois Basin; |
|--------|---------|------------------------------------------|

|   | • | 28      percent from the Powder River Basin inWyoming; |
|--------|---------|--------------------------------------------------------|

|   | • | 18      percent from the Uinta Basin of Utah and Colorado;  and |
|--------|---------|-----------------------------------------------------------------|

|   | • | 14      percent from the Appalachian Basin of Kentucky, Pennsylvania, Tennessee,      Virginia, and West Virginia. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

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Transmission

|   | • | Approximately      15,954 circuit miles of transmission lines (primarily 500 kilovolt and 161      kilovolt lines); |
|--------|---------|---------------------------------------------------------------------------------------------------------------------|

|   | • | 487      transmission substations, power switchyards, and switching stations;      and |
|--------|---------|----------------------------------------------------------------------------------------|

|   | • | 66      individual interconnection points and 1,020 customer connection      points. |
|--------|---------|--------------------------------------------------------------------------------------|

Weather and Seasonality

Competition

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Research and Development

Governance

Regulation

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|   | • | Under      section 210 of the FPA, TVA can be ordered to interconnect its      transmission facilities with the electrical facilities of qualified      generators and other electric utilities that meet certain      requirements.  It must be found that the requested      interconnection is in the public interest and would encourage conservation      of energy or capital, optimize efficiency of facilities or resources, or      improve reliability.  The requirements of section 212 concerning      the terms and conditions of interconnection, including reimbursement of      costs, must also be met. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      section 211 of the FPA, TVA can be ordered to transmit power at wholesale      provided that the order does not impair the reliability of the TVA or      surrounding systems and likewise meets the applicable requirements of      section 212 concerning terms, conditions, and rates for      service.  Under section 211A of the FPA, TVA is subject to FERC      review of the transmission rates and the terms and conditions of service      that TVA provides others to ensure comparability of treatment of such      service with TVA’s own use of its transmission system and that the terms      and conditions of service are not unduly discriminatory or      preferential.  The anti-cherrypicking provision of the FPA      precludes TVA from being ordered to wheel another supplier’s power to a      customer if the power would be consumed within TVA’s defined service      territory. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Sections      221 and 222 of the FPA, applicable to all market participants, including      TVA, prohibit (i) using manipulative or deceptive devices or contrivances      in connection with the purchase or sale of power or transmission services      subject to FERC’s jurisdiction and (ii) reporting false information on the      price of electricity sold at wholesale or the availability of transmission      capacity to a federal agency with intent to fraudulently affect the data      being compiled by the agency. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      Section 215 of the FPA, TVA must comply with certain standards designed to      maintain transmission system reliability.  These standards are      approved by FERC and enforced by the Electric Reliability      Organization. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Section      206(e) of the FPA provides FERC with authority to order refunds of      excessive prices on short-term sales (transactions lasting 31 days or      less) by all market participants, including TVA, in market manipulation      and price gouging situations if such sales are under a FERC-approved      tariff. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Section      220 of the FPA provides FERC with authority to issue regulations requiring      the reporting, on a timely basis, of information about the availability      and prices of wholesale power and transmission service by all market      participants, including TVA. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      sections 306 and 307 of the FPA, FERC may investigate electric industry      practices, including TVA’s operations previously mentioned that are      subject to FERC’s jurisdiction. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      sections 316 and 316A of the FPA, FERC has authority to impose criminal      penalties and civil penalties of up to $1 million a day for each violation      on entities subject to the provisions of Part II of the FPA, which      includes the above provisions applicable to TVA. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Taxation and Tax Equivalents

Environmental Matters

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Employee Relations

ITEM 1A.  RISK FACTORS

| •   | TVA could      lose its protected service territory. |
|---------------------|------------------------------------------------------|

| •   | The      TVA Board could lose its sole authority to set rates for      electricity. |
|---------------------|-------------------------------------------------------------------------------------|

|   | – | TVA      might be unable to set rates at a level sufficient to generate adequate      revenues to service its financial obligations, properly operate and      maintain its power assets, and provide for reinvestment in its power      program; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | TVA      might become subject to additional regulatory oversight that could impede      TVA’s ability to manage itsbusiness. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

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| •   | TVA      could lose responsibility for managing the Tennessee Valley River      System. |
|---------------------|-----------------------------------------------------------------------------------------|

| •   | Congress      could take actions that lead to a downgrade of TVA’s credit      rating. |
|---------------------|----------------------------------------------------------------------------------------------|

| •   | Compliance      costs.  The cost of compliance with existing      environmental laws, regulations, and orders is expected to be substantial,      and costs could be significantly more than TVA anticipates.  In      connection with the remediation of the Kingston ash spill, for example,      actual costs could substantially exceed estimated costs if, among other      things, TVA has to remove more ash than it anticipates, additional      environmentally sensitive material is uncovered in the river sediment,      delays of the ash removal process occur, or the methods of final      remediation change. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Closure of      facilities.  At some of TVA’s older facilities, it may be      uneconomical for TVA to install the necessary equipment to comply with      existing environmental laws, regulations, and orders, which may cause TVA      to shut down those facilities. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | On-site      liabilities.  TVA may be responsible for on-site      liabilities associated with the environmental condition of facilities or      property that it has acquired or developed or operates regardless of when      the liabilities arose, whether they are known or unknown, and whether they      were caused by TVA or a third party. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Failure to obtain regulatory      approvals.  TVA may be unable to obtain or maintain all      required environmental regulatory approvals.  If there is a      delay in obtaining required environmental regulatory approvals or if TVA      fails to obtain, maintain, or comply with any such approval, TVA may be      unable to operate its facilities or may have to pay fines or      penalties. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Greenhouse      gases.  Costs to comply with future regulation of CO2 and      other GHGs may reduce TVA’s cash flows and negatively impact its financial      position and results of operations.  The cost impact of      legislation or regulation cannot be determined at this    time. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Coal combustion      by-products.  Federal and state governments may regulate      coal combustion by-products.  The EPA plans to issue new federal      regulations governing the management of coal combustion by-products,      including fly ash, by December 31, 2009.  These regulations may      require TVA to make additional capital expenditures, increase TVA’s      operating and maintenance costs, or lead to TVA shutting down certain      facilities. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Renewable energy portfolio      standards.  TVA is not currently obligated to provide a      percentage of the power it sells from renewable sources but may be      required to do so in the future.  In such a case, TVA would      either have to build additional facilities that use renewable resources to      produce the power itself, purchase renewable power from other companies,      or offset some of its renewable requirements through energy      efficiency.  Such developments could require      TVA to make significant capital expenditures, increase its purchased power      costs, or make changes in how it operates its      facilities. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| •   | Economic      downturns.  Sustained economic downturns in TVA’s service      area or other parts of the United States could reduce overall demand for      power and thus reduce TVA’s power sales and cash flows, especially as      TVA’s industrial customers reduce their operations and thus their      consumption of power. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Loss of      customers.  As of September 30, 2009, two distributor      customers had notices in effect terminating their power contracts with      TVA.  The loss of additional customers could have a material      adverse effect on TVA’s cash flows, results of operations, and financial      condition. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Change in      technology.  Research and development activities are      ongoing to improve existing and alternative technologies to produce      electricity, including gas turbines, wind turbines, fuel cells,      microturbines, solar cells, and distributed generation      devices.  It is possible that advances in these or other      alternative technologies could reduce the costs of electricity production      from alternative technologies to a level that will enable these      technologies to compete effectively with traditional power plants like      TVA’s.  To the extent these technologies become a more      cost-effective option for certain customers, TVA’s sales to these      customers could be reduced, thereby negatively affecting TVA’s cash flows,      results of operations, and financial condition. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Nuclear      incidents.  A nuclear incident at a TVA facility could      have significant consequences including loss of life, damage to the      environment, damage to or loss of the facility, and damage to non-TVA      property.  Although TVA carries certain types of nuclear      insurance, the amount that TVA is required to pay in connection with a      nuclear incident could significantly exceed the amount of coverage      provided by insurance.  Any nuclear incident, even at a facility      that is not operated by or licensed to TVA, has the potential to impact      TVA adversely by obligating TVA to pay up to $105 million per year and a      total of $671 million per nuclear incident under the Price-Anderson      Act.  In      addition, a nuclear incident could negatively affect TVA by, among other      things, obligating TVA to pay retrospective insurance premiums, reducing      the availability and affordability of insurance, increasing the costs of      operating nuclear units, or leading to increased regulation or restriction      on the construction, operation, and decommissioning of nuclear      facilities.  Moreover, Congress could impose revenue-raising      measures on the nuclear industry to pay claims exceeding the limit for a      single incident under the Price-Anderson  Act. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| •   | Decommissioning      costs.  TVA maintains a nuclear decommissioning trust for      the purpose of providing funds to decommission its nuclear      facilities.  The decommissioning trust is invested in securities      generally designed to achieve a return in line with overall equity market      performance.  TVA might have to make unplanned contributions to      the trust if, among other things; |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | The      value of the investments in the trust declines    significantly; |
|---------------------|---------------------------------------------------------------------------|

| •   | The      decommissioning funding requirements are changed by law or      regulation; |
|---------------------|--------------------------------------------------------------------------------------|

| •   | The      assumed real rate of return on plan assets, which is currently 5 percent,      is lowered by the TVA Board; |
|---------------------|----------------------------------------------------------------------------------------------------------------------|

| •   | The      actual costs of decommissioning are more than  planned; |
|---------------------|------------------------------------------------------------------|

| •   | Changes      in technology and experience related to decommissioning cause      decommissioning cost estimates to increase significantly;    or |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | TVA      is required to decommission a nuclear plant sooner than it      anticipates. |
|---------------------|---------------------------------------------------------------------------------------|

| •   | Increased      regulation.  The NRC has broad authority to adopt      requirements related to the licensing, operation, and decommissioning of      nuclear generation facilities that can result in significant restrictions      or requirements on TVA.  If the NRC modifies existing      requirements or adopts new requirements, TVA could be required to make      substantial capital expenditures at its nuclear plants or make substantial      contributions to its nuclear decommissioning trust.  In      addition, if TVA fails to comply with requirements promulgated by the NRC,      the NRC has the authority to impose fines, shut down units, or modify,      suspend, or revoke TVA’s operatinglicenses. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Might      have to invest a significant amount of resources to repair or replace the      assets; |
|---------------------|---------------------------------------------------------------------------------------------------|

| •   | Might      be unable to operate the assets for a significant period of      time; |
|---------------------|-----------------------------------------------------------------------------------|

| •   | Might      have to purchase replacement power on the open  market; |
|---------------------|--------------------------------------------------------------------|

| •   | Might      not be able to meet its contractual obligations to deliver power;      and |
|---------------------|---------------------------------------------------------------------------------------|

| •   | Might      have to remediate collateral damage caused by a failure of the      assets. |
|---------------------|----------------------------------------------------------------------------------------|

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| •   | Commodity price      risk.  Prices of commodities critical to TVA’s      operations, including coal, uranium, natural gas, fuel oil, crude oil,      construction materials, emission allowances, and electricity, have been      extremely volatile in recent years.  If prices of these      commodities increase, TVA’s rates      may increase. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Investment price      risk.  TVA is exposed to investment price risk in its      nuclear decommissioning trust, its asset retirement trust, and its pension      fund.  If the value of the investments held in the nuclear      decommissioning trust or the pension fund decreases significantly, TVA      could be required to make substantial unplanned contributions to these      funds. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Interest rate      risk.  Changes in interest rates could increase the      amount of interest that TVA pays on new bonds that it issues, decrease the      return that TVA receives on its short-term investments, decrease the value      of the investments in TVA’s pension fund and trusts, and increase the      losses on the mark-to-market valuation of certain derivative transactions      into which TVA has entered. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Credit and counterparty      risk.  TVA is exposed to the risk that its counterparties      will not be able to perform their contractual obligations.  If      TVA’s counterparties fail to perform their obligations, TVA’s cash flows,      results of operations, and financial condition could be adversely      affected.  In addition, the failure of a counterparty to perform      could make it difficult for TVA to perform its obligations, particularly      if the counterparty is a supplier of electricity or fuel to      TVA. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Currency exchange rate      risk.  Over the next three years, TVA plans to spend a      significant amount of capital on clean air projects, capacity expansion,      and other projects.  A portion of this amount may be spent on      contracts that are denominated in a foreign currency.  The value      of the U.S. Dollar compared with other currencies has fluctuated widely in      recent years, and, if not effectively managed, foreign currency exposure      could negatively impact TVA’s cash flows, results of operations, and      financial position. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Provisions      of the pension and post-retirement      benefits plan; |
|---------------------|------------------------------------------------------------------------|

| •   | Changing      employee demographics; |
|---------------------|--------------------------------------|

| •   | Rates      of increase in compensation levels; |
|---------------------|------------------------------------------------|

| •   | Rates      of return on plan assets; |
|---------------------|--------------------------------------|

| •   | Discount      rates used in determining future benefit  obligations; |
|---------------------|----------------------------------------------------------------------|

| •   | Rates      of increase in health care costs; |
|---------------------|----------------------------------------------|

| •   | Levels      of interest rates used to measure the required minimum funding levels of      the plans; |
|---------------------|------------------------------------------------------------------------------------------------------|

| •   | Future      government regulation; and |
|---------------------|----------------------------------------|

| •   | Contributions      made to the plans. |
|---------------------|---------------------------------------|

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| •   | A      downgrade would increase TVA’s interest expense by increasing the interest      rates that TVA pays on new Bonds that it issues.  An increase in      TVA’s interest expense would reduce the amount of cash available for other      purposes, which could result in the need to increase borrowings, to reduce      other expenses or capital investments, or to increase power      rates. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade could result in TVA’s having to post collateral under certain      physical and financial contracts that contain rating    triggers. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade below a contractual threshold could prevent TVA from borrowing      under two credit facilities totaling $2.0  billion. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade could lower the price of TVA securities in the secondary      market. |
|---------------------|----------------------------------------------------------------------------------------|

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ITEM 1B.  UNRESOLVED STAFFCOMMENTS

ITEM 2.  PROPERTIES

Generating Properties

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Table of Contents

Transmission Properties

|   | • | Approximately      15,954 circuit miles of transmission lines (primarily 500 kilovolt and 161      kilovolt lines); |
|--------|---------|---------------------------------------------------------------------------------------------------------------------|

|   | • | 487      transmission substations, power switchyards, and switching stations;      and |
|--------|---------|----------------------------------------------------------------------------------------|

|   | • | 66      individual interconnection points and 1,020 customer connection      points. |
|--------|---------|--------------------------------------------------------------------------------------|

Natural Resource StewardshipProperties

|   | • | 11,000      miles of reservoir shoreline; |
|--------|---------|-------------------------------------------|

|   | • | 293,000      acres of reservoir land; |
|--------|---------|---------------------------------------|

|   | • | 650,000      surface acres of water; and |
|--------|---------|------------------------------------------|

|   | • | Over      100 public recreation facilities. |
|--------|---------|---------------------------------------------|

Buildings

Disposal of Property

|   | • | Under      Section 31 of the TVA Act, TVA has authority to dispose of surplus real      property at a public auction. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | • | Under      Section 4(k) of the TVA Act, TVA can dispose of real property for certain      specified purposes, including providing replacement lands for certain      entities whose lands were flooded or destroyed by dam or reservoir      construction and to grant easements and rights-of-way upon which are      located transmission or distributionlines. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      Section 15d(g) of the TVA Act, TVA can dispose of real property in      connection with the construction of generating plants or other facilities      under certain circumstances. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Under      40 U.S.C. § 1314, TVA has authority to grant easements for rights-of-way      and other purposes. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|

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ITEM 3.  LEGAL PROCEEDINGS

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OFSECURITY HOLDERS

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Table of Contents

PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES

ITEM 6.  SELECTED FINANCIALDATA

| Selected      Financial Data1,      2For      the years ended September 30(in      millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      revenues3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | 11,255 |   |   | $ | 10,382 |   |   | $ | 9,326 |   |   | $ | 8,983 |   |   | $ | 7,792 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 726 |   |   | $ | 817 |   |   | $ | 423 |   |   | $ | 113 |   |   | $ | 85 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $ | 40,017 |   |   | $ | 37,137 |   |   | $ | 33,732 |   |   | $ | 34,308 |   |   | $ | 34,473 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      long-term debt, excluding current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $ | 21,788 |   |   | $ | 20,404 |   |   | $ | 21,099 |   |   | $ | 19,544 |   |   | $ | 17,751 |   |
| Capital      leases4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 77 |   |   |   | 95 |   |   |   | 104 |   |   |   | 128 |   |   |   | 150 |   |
| Leaseback      obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 1,403 |   |   |   | 1,353 |   |   |   | 1,072 |   |   |   | 1,108 |   |   |   | 1,143 |   |
| Energy      prepayment obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 927 |   |   |   | 1,033 |   |   |   | 1,138 |   |   |   | 1,244 |   |   |   | 1,350 |   |
|     Total      long-term obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 24,195 |   |   |   | 22,885 |   |   |   | 23,413 |   |   |   | 22,024 |   |   |   | 20,394 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 844 |   |   |   | 185 |   |   |   | 1,422 |   |   |   | 2,376 |   |   |   | 2,469 |   |
| Current      maturities of long-term debt, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 8 |   |   |   | 2,030 |   |   |   | 90 |   |   |   | 985 |   |   |   | 2,693 |   |
|    Total      short-term obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 852 |   |   |   | 2,215 |   |   |   | 1,512 |   |   |   | 3,361 |   |   |   | 5,162 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      financial obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $ | 25,047 |   |   | $ | 25,100 |   |   | $ | 24,925 |   |   | $ | 25,385 |   |   | $ | 25,556 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes(1) TVA’s      financial results for each year were affected by several special items      that TVA considers significant. See Item 7, Management’s Discussion      and Analysis of Financial Condition and Results of Operations for a      description of special items in 2009, 2008, and 2007. In addition,      during 2006, TVA adopted a new accounting methodology for conditional      asset retirement obligations that resulted in a cumulative effect charge      to income of $109 million and an increase in accumulated depreciation of      $20 million.(2) See      Item 1A, Risk Factors and Note 20 for a discussion of risks and      contingencies that could affect TVA’s future financial      results.(3) Prior      to 2007, TVA reported certain revenue not directly associated with revenue      derived from electric operations as Operating      revenues. This income of $10 million and $17 million for 2006      and 2005, respectively, has been reclassified from Operating      revenues to Other      income. Additionally, certain Operating      revenues related to income derived from electric operations were      recorded net of related expenses. Expenses of $15 million for 2005      have been reclassified from Operating      revenues to Operating      expenses.(4) Included      in Accrued      Liabilities and Other liabilities      on the Balance Sheets. |   |

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Table of Contents

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Business Overview

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Table of Contents

Executive Summary

|   | • | Drought      conditions in TVA’s service area began to ease in 2009, and rainfall in      the eastern Tennessee Valley was 103 percent of normal for the      year.  As a result, TVA was able to increase lower cost      conventional hydroelectric generation by 64 percent in 2009 over 2008      levels. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Average      prices for purchased power and natural gas declined by 36 percent and 61      percent, respectively, in 2009 as compared to  2008. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | For      the tenth straight year, TVA’s transmission system operated with 99.999      percent reliability in delivering electricity to customers. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | TVA      experienced improvements in safety in 2009 and performed in the top decile      in the utility industry. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|

|   | • | TVA      helped recruit Hemlock Semiconductor and Wacker Chemie to the TVA service      area.  These companies announced capital investments of over      $2.2 billion and the expected creation of an estimated 1,000 jobs. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

Challenges During 2009

----

Table of Contents

|   | • | A      new organization has been put into place to improve the management of CCP      and establish accountability for decisions involving CCP,    and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | TVA      is converting and eliminating its wet fly ash, bottom ash, and gypsum      facilities to dry storage facilities and remediating the CCP facilities      that were classified as “High” during the preliminary reassessment, such      that they would no longer need to be classified as  “High.” |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

Future Challenges

|   | • | New      Generation.  TVA intends to add new generation      assets.  This intention is reflected in TVA’s decision to      complete the construction of Watts Bar Unit 2 and to complete combined      cycle facilities at Lagoon Creek and John Sevier.  TVA plans to      consider other opportunities to add new generation from time to      time.  Market conditions, including the volatility of the price      of construction materials and the potential shortage of skilled craft      labor, may add uncertainties to the cost and schedule of new      construction. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Power      Purchases.  Purchasing power from others will likely      remain a component of how TVA addresses the power needs of its service      area.  The Strategic Plan establishes a goal of balancing      production capabilities with power supply requirements by promoting the      conservation and efficient use of electricity and, when necessary, buying,      building, and/or leasing assets or entering into purchased power      agreements.  Achieving this goal will allow TVA to reduce its      reliance on purchased power. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

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Table of Contents

Liquidity and CapitalResources

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Table of Contents

| •   | Operation,      maintenance, and administration of its power  system; |
|---------------------|-----------------------------------------------------------------------|

| •   | Payments      to states and counties in lieu oftaxes; |
|---------------------|-------------------------------------------------------|

| •   | Debt      service on outstanding Bonds; |
|---------------------|-----------------------------------------|

| •   | Payments      to the U.S. Treasury as a repayment of and a return on the Power      Facilities Appropriation Investment;and |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------|

| •   | Such      additional margin as the TVA Board may consider desirable for investment      in power system assets, retirement of outstanding Bonds in advance of      maturity, additional reduction of the Power Facility Appropriation      Investment, and other purposes connected with TVA’s power business, having      due regard for the primary objectives of the TVA Act, including the      objective that power shall be sold at rates as low as are      feasible. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | The      depreciation accruals and other charges representing the amortization of      capital expenditures, and |
|---------------------|------------------------------------------------------------------------------------------------------------------|

| •   | The      net proceeds from any disposition of power  facilities, |
|---------------------|------------------------------------------------------------------|

| •   | The      reduction of its capital obligations (including Bonds and the Power      Facility Appropriation Investment),or |
|---------------------|-------------------------------------------------------------------------------------------------------------------------|

| •   | Investment      in power assets. |
|---------------------|----------------------------------|

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Table of Contents

| Outstanding      Power BondsAs      of September 30, 2009                                                                                                                                                                                                                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| CUSIP      or Other Identifier                                                                                                                                                                                                                                                                                                                                 | Maturity |   | Coupon      Rate |   |   | PrincipalAmount      1 |   | Stock      Exchange Listings |
| electronotes®                                                                                                                                                                                                                                                                                                                                             | 03/15/2018      - 01/15/2029 |   |   | 2.650%      - 5.500 | %2 |   | $ | 479 |   | None |
| 880591DN9                                                                                                                                                                                                                                                                                                                                                      | 01/18/2011 |   |   | 5.625 | % |   |   | 1,000 |   | New      York, Luxembourg |
| 880591DL3                                                                                                                                                                                                                                                                                                                                                      | 05/23/2012 |   |   | 7.140 | % |   |   | 29 |   | New      York |
| 880591DT6                                                                                                                                                                                                                                                                                                                                                      | 05/23/2012 |   |   | 6.790 | % |   |   | 1,486 |   | New      York |
| 880591CW0                                                                                                                                                                                                                                                                                                                                                      | 03/15/2013 |   |   | 6.000 | % |   |   | 1,359 |   | New      York, Hong Kong, Luxembourg, Singapore |
| 880591DW9                                                                                                                                                                                                                                                                                                                                                      | 08/01/2013 |   |   | 4.750 | % |   |   | 940 |   | New      York, Luxembourg |
| 880591DY5                                                                                                                                                                                                                                                                                                                                                      | 06/15/2015 |   |   | 4.375 | % |   |   | 1,000 |   | New      York, Luxembourg |
| 880591EE8                                                                                                                                                                                                                                                                                                                                                      | 11/15/2015 |   |   | 2.250 | % |   |   | 21 |   | None |
| 880591DS8                                                                                                                                                                                                                                                                                                                                                      | 12/15/2016 |   |   | 4.875 | % |   |   | 524 |   | New      York |
| 880591EA6                                                                                                                                                                                                                                                                                                                                                      | 07/18/2017 |   |   | 5.500 | % |   |   | 1,000 |   | New      York, Luxembourg |
| 880591CU4                                                                                                                                                                                                                                                                                                                                                      | 12/15/2017 |   |   | 6.250 | % |   |   | 650 |   | New      York |
| 880591EC2                                                                                                                                                                                                                                                                                                                                                      | 04/01/2018 |   |   | 4.500 | % |   |   | 1,000 |   | New      York, Luxembourg |
| 880591DC3                                                                                                                                                                                                                                                                                                                                                      | 06/07/2021 |   |   | 5.805 | %3 |   |   | 320 |   | New      York, Luxembourg |
| 880591CJ9                                                                                                                                                                                                                                                                                                                                                      | 11/01/2025 |   |   | 6.750 | % |   |   | 1,350 |   | New      York, Hong Kong, Luxembourg, Singapore |
| 880591300                                                                                                                                                                                                                                                                                                                                                      | 06/01/2028 |   |   | 4.728 | % |   |   | 330 |   | New      York |
| 880591409                                                                                                                                                                                                                                                                                                                                                      | 05/01/2029 |   |   | 4.500 | % |   |   | 274 |   | New      York |
| 880591DM1                                                                                                                                                                                                                                                                                                                                                      | 05/01/2030 |   |   | 7.125 | % |   |   | 1,000 |   | New      York, Luxembourg |
| 880591DP4                                                                                                                                                                                                                                                                                                                                                      | 06/07/2032 |   |   | 6.587 | %3 |   |   | 399 |   | New      York, Luxembourg |
| 880591DV1                                                                                                                                                                                                                                                                                                                                                      | 07/15/2033 |   |   | 4.700 | % |   |   | 472 |   | New      York, Luxembourg |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                      | 06/15/2034 |   |   | 3.770 | % |   |   | 450 |   | None |
| 880591DX7                                                                                                                                                                                                                                                                                                                                                      | 06/15/2035 |   |   | 4.650 | % |   |   | 436 |   | New      York |
| 880591CK6                                                                                                                                                                                                                                                                                                                                                      | 04/01/2036 |   |   | 5.980 | % |   |   | 121 |   | New      York |
| 880591CS9                                                                                                                                                                                                                                                                                                                                                      | 04/01/2036 |   |   | 5.880 | % |   |   | 1,500 |   | New      York |
| 880591CP5                                                                                                                                                                                                                                                                                                                                                      | 01/15/2038 |   |   | 6.150 | % |   |   | 1,000 |   | New      York |
| 880591ED0                                                                                                                                                                                                                                                                                                                                                      | 06/15/2038 |   |   | 5.500 | % |   |   | 500 |   | New      York |
| 880591EH1                                                                                                                                                                                                                                                                                                                                                      | 09/15/2039 |   |   | 5.250 | % |   |   | 1,500 |   | New      York |
| 880591BL5                                                                                                                                                                                                                                                                                                                                                      | 04/15/2042 |   |   | 8.250 | % |   |   | 1,000 |   | New      York |
| 880591DU3                                                                                                                                                                                                                                                                                                                                                      | 06/07/2043 |   |   | 4.962 | %3 |   |   | 240 |   | New      York, Luxembourg |
| 88059CF7                                                                                                                                                                                                                                                                                                                                                       | 07/15/2045 |   |   | 6.235 | % |   |   | 140 |   | New      York |
| 880591EB4                                                                                                                                                                                                                                                                                                                                                      | 01/15/2048 |   |   | 4.875 | % |   |   | 500 |   | New      York, Luxembourg |
| 880591DZ2                                                                                                                                                                                                                                                                                                                                                      | 04/01/2056 |   |   | 5.375 | % |   |   | 1,000 |   | New      York |
| Subtotal                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   | 22,020 |   |   |
| Unamortized      discounts, premiums, and other                                                                                                                                                                                                                                                                                                                |   |   |   | (224 | ) |   |
| Total      outstanding power bonds, net                                                                                                                                                                                                                                                                                                                        |   |   | $ | 21,796 |   |   |
| Notes(1) The      above table includes net exchange losses from currency transactions of $30      million at September 30, 2009.(2) The      weighted average interest rate of TVA’s outstanding electronotes®      was 4.58 percent at September 30, 2009.(3) The      coupon rate represents TVA’s effective interest  rate. |

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| •   | In      2003, TVA monetized the call provisions on a $1.0 billion      Bond issue and a $476 million Bond issue by entering into swaption      agreements with a third party in exchange for $175 million and $81      million, respectively. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | In      2005, TVA monetized the call provisions on two Bond issues ($42 million      total par value) by entering into swaption agreements with a third party      in exchange for $5 million. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Summary Cash Flows

| Summary      Cash FlowsFor      the years ended September 30 |   |
|--------------------------------------------------------------|--------|
|                                                         |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Cash      provided by (used in):                             |   |   |   |   |   |   |   |   |   |
| Operating      activities                                    |   | $ | 2,141 |   |   | $ | 1,957 |   |   | $ | 1,788 |   |
| Investing      activities                                    |   |   | (2,265 | ) |   |   | (2,299 | ) |   |   | (1,686 | ) |
| Financing      activities                                    |   |   | 112 |   |   |   | 390 |   |   |   | (473 | ) |
| Net      (decrease) increase in cash and cash equivalents    |   | $ | (12 | ) |   | $ | 48 |   |   | $ | (371 | ) |

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| Future      Planned Construction Expenditures1As      of September 30                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Actual |   |   | Estimated      Construction Expenditures |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |
| Watts      Bar Unit 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 477 |   |   | $ | 681 |   |   | $ | 635 |   |   | $ | 416 |   |   | $ | — |   |   | $ | — |   |
| Other      capacity expansion expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 348 |   |   |   | 484 |   |   |   | 727 |   |   |   | 1,195 |   |   |   | 1,695 |   |   |   | 1,867 |   |
| Environmental      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 171 |   |   |   | 145 |   |   |   | 297 |   |   |   | 530 |   |   |   | 1,475 |   |   |   | 1,286 |   |
| Ash      pond remediation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 5 |   |   |   | 181 |   |   |   | 216 |   |   |   | 228 |   |   |   | 114 |   |   |   | 127 |   |
| Transmission      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 230 |   |   |   | 234 |   |   |   | 228 |   |   |   | 283 |   |   |   | 284 |   |   |   | 345 |   |
| Other      capital expenditures 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 534 |   |   |   | 527 |   |   |   | 611 |   |   |   | 612 |   |   |   | 627 |   |   |   | 641 |   |
| Total      capital projects requirements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | 1,765 | 3 |   | $ | 2,252 |   |   | $ | 2,714 |   |   | $ | 3,264 |   |   | $ | 4,195 |   |   | $ | 4,266 |   |
| Notes(1) TVA      plans to fund these expenditures with power revenues and proceeds from      power program financings. This table shows only expenditures that are      currently planned.  Additional expenditures may be required for TVA      to meet the anticipated growth in demand for power in its service      area.(2) Other      capital expenditures are primarily associated with short lead time      construction projects aimed at the continued safe and reliable operation      of generating assets.(3) The      numbers above exclude allowance for funds used during construction of $24      million and includes items accrued of $18 million. |   |

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| Commitments      and ContingenciesPayments      due in the year ending September 30                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | Thereafter |   |   | Total |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $ | 852 |   |   | $ | 1,008 |   |   | $ | 1,523 |   |   | $ | 2,308 |   |   | $ | 32 |   |   | $ | 17,111 |   |   | $ | 22,834 |   |
| Interest      payments relating to debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 1,254 |   |   |   | 1,226 |   |   |   | 1,198 |   |   |   | 1,054 |   |   |   | 968 |   |   |   | 17,157 |   |   |   | 22,857 |   |
| Lease      obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 488 |   |   |   | 54 |   |   |   | 6 |   |   |   | — |   |   |   | — |   |   |   | 3 |   |   |   | 551 |   |
|    Non-cancelable      operating                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 52 |   |   |   | 43 |   |   |   | 37 |   |   |   | 31 |   |   |   | 28 |   |   |   | 195 |   |   |   | 386 |   |
| Purchase      obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Power                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 274 |   |   |   | 272 |   |   |   | 258 |   |   |   | 203 |   |   |   | 198 |   |   |   | 6,200 |   |   |   | 7,405 |   |
|    Fuel                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 2,209 |   |   |   | 1,592 |   |   |   | 1,160 |   |   |   | 938 |   |   |   | 832 |   |   |   | 1,836 |   |   |   | 8,567 |   |
|    Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 50 |   |   |   | 48 |   |   |   | 37 |   |   |   | 30 |   |   |   | 27 |   |   |   | 156 |   |   |   | 348 |   |
| Expenditures      for emission control commitments2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 438 |   |   |   | 378 |   |   |   | 455 |   |   |   | 325 |   |   |   | 109 |   |   |   | — |   |   |   | 1,705 |   |
| Litigation      settlement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 3 |   |   |   | 3 |   |   |   | 3 |   |   |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 15 |   |
| Environmental      cleanup costs-Kingston ash spill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 348 |   |   |   | 259 |   |   |   | 59 |   |   |   | 36 |   |   |   | — |   |   |   | — |   |   |   | 702 |   |
| Payments      on other financings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 89 |   |   |   | 94 |   |   |   | 98 |   |   |   | 99 |   |   |   | 100 |   |   |   | 818 |   |   |   | 1,298 |   |
| Payments      to U.S. Treasury                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Return      of Power Facility    Appropriation      Investment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 20 |   |   |   | 20 |   |   |   | 20 |   |   |   | 20 |   |   |   | 10 |   |   |   | — |   |   |   | 90 |   |
|    Return      on Power Facility    Appropriation      Investment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 9 |   |   |   | 21 |   |   |   | 22 |   |   |   | 21 |   |   |   | 19 |   |   |   | 253 |   |   |   | 345 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $ | 6,086 |   |   | $ | 5,018 |   |   | $ | 4,876 |   |   | $ | 5,068 |   |   | $ | 2,326 |   |   | $ | 43,729 |   |   | $ | 67,103 |   |
| Notes(1) Does      not include noncash items of foreign currency valuation loss of $30      million and net discount on sale of Bonds of $224 million.(2) Expenditures      for emission control commitments represent TVA’s current estimate of costs      that may be incurred as a result of the court order in the case       brought by North Carolina alleging publice nuisance.  Management is      evaluating      alternatives which could change these amounts in the future. See Note      20 — Legal Proceedings —      Case Brought by North Carolina Alleging Public Nuisance. |   |

| Energy      Prepayment Obligations  |   |
|------------------------------------------|--------|
|                                     |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | Thereafter |   |   | Total |   |
| Energy      Prepayment Obligations       |   | $ | 105 |   |   | $ | 105 |   |   | $ | 105 |   |   | $ | 102 |   |   | $ | 100 |   |   | $ | 410 |   |   | $ | 927 |   |

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Results of Operations

| Sales      of ElectricityFor      the years ended September 30 |   |
|----------------------------------------------------------------|--------|
| (millions      of kWh)                                    |   |
|                                                           |   | 2009 |   |   | Percent      Change |   |   | 2008 |   |   | Percent      Change |   |   | 2007 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipalities      and cooperatives                           |   |   | 133,078 |   |   |   | (4.7 | %) |   |   | 139,596 |   |   |   | (2.0 | %) |   |   | 142,461 |   |
| Industries      directly served                                |   |   | 28,718 |   |   |   | (17.2 | %) |   |   | 34,695 |   |   |   | 11.9 | % |   |   | 30,993 |   |
| Federal      agencies and other                                |   |   | 2,008 |   |   |   | (0.2 | %) |   |   | 2,013 |   |   |   | (3.0 | %) |   |   | 2,075 |   |
|     Total      sales of electricity        |   |   | 163,804 |   |   |   | (7.1 | %) |   |   | 176,304 |   |   |   | 0.4 | % |   |   | 175,529 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Heating      degree days                                       |   |   | 3,403 |   |   |   | 9.5 | % |   |   | 3,109 |   |   |   | (0.4 | %) |   |   | 3,123 |   |
| Cooling      degree days                                       |   |   | 1,829 |   |   |   | (8.1 | %) |   |   | 1,990 |   |   |   | (15.7 | %) |   |   | 2,361 |   |
| Combined      degree days                                      |   |   | 5,232 |   |   |   | 2.6 | % |   |   | 5,099 |   |   |   | (7.0 | %) |   |   | 5,484 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | 2009      Compared to 2008 |
|--------|----------------------------|

|   | 2008      Compared to 2007 |
|--------|----------------------------|

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|   | Financial      Results |
|--------|------------------------|

| Summary      Statements of IncomeFor      the years ended September 30  |   |
|------------------------------------------------------------------------------|--------|
|                                                                         |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |
| Operating      revenues                                                      |   | $ | 11,255 |   |   | $ | 10,382 |   |   | $ | 9,326 |   |
| Revenue      capitalized during pre-commercial plant operations              |   |   | — |   |   |   | — |   |   |   | (57 | ) |
| Operating      expenses                                                      |   |   | (9,282 | ) |   |   | (8,198 | ) |   |   | (7,726 | ) |
| Operating      income                                                        |   |   | 1,973 |   |   |   | 2,184 |   |   |   | 1,543 |   |
| Other      income, net                                                       |   |   | 25 |   |   |   | 9 |   |   |   | 71 |   |
| Unrealized      gain on derivative contracts, net                            |   |   | — |   |   |   | — |   |   |   | 41 |   |
| Interest      expense, net                                                   |   |   | (1,272 | ) |   |   | (1,376 | ) |   |   | (1,232 | ) |
| Net      income                                                              |   | $ | 726 |   |   | $ | 817 |   |   | $ | 423 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

| Operating      RevenueFor      the years ended September 30  |   |
|-------------------------------------------------------------------|--------|
|                                                              |   | 2009 |   |   | Percent      Change |   |   | 2008 |   |   | Percent      Change |   |   | 2007 |   |
| Operating      revenues                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipalities      and cooperatives                              |   | $ | 9,644 |   |   |   | 11.4 | % |   | $ | 8,659 |   |   |   | 10.3 | % |   | $ | 7,847 |   |
| Industries      directly served                                   |   |   | 1,367 |   |   |   | (7.1 | %) |   |   | 1,472 |   |   |   | 20.6 | % |   |   | 1,221 |   |
| Federal      agencies and other                                   |   |   | 131 |   |   |   | 8.3 | % |   |   | 121 |   |   |   | 8.0 | % |   |   | 112 |   |
| Other      revenue                                                |   |   | 113 |   |   |   | (13.1 | %) |   |   | 130 |   |   |   | (11.0 | %) |   |   | 146 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      operating revenues                                     |   | $ | 11,255 |   |   |   | 8.4 | % |   | $ | 10,382 |   |   |   | 11.3 | % |   | $ | 9,326 |   |

|                    |   | Variance      2009 vs. 2008 |   |   | Variance      2008 vs. 2007 |   |
|-------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                    |   |                        |   |   |                        |   |
| Base      rate changes  |   | $                           | 754    |   |                        | $      | 389 |   |
| FCA      rate changes   |   |                        | 742    |   |                        |   | 701 |   |
| Volume                  |   |                        | (598   | )      |                        |   | (13 | ) |
| Off      system sales   |   |                        | (8     | )      |                        |   | (5 | ) |
| Other      revenue      |   |                        | (17    | )      |                        |   | (16 | ) |
|    Total |   | $                           | 873    |   |                        | $      | 1,056 |   |

|   | • | A      $985 million increase in revenue from Municipalities and      cooperatives primarily due to an increase in average base rates of      9.1 percent due to base rate increases effective April 1, 2008 and October      1, 2008, which together provided $689 million in additional      revenue.  FCA rate increases provided an additional $669 million      in revenue.  These increases were partially offset by a decline      in sales volume of 4.7 percent, which reduced revenues by $373      million. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | A      $105 million decrease in revenue from Industries directly      served primarily due to decreased sales volume of 17.2 percent,      which reduced revenues by $230 million.  This decrease was      partially offset by FCA rate increases which provided $63 million in      additional revenue, and an increase in average base rates of 5.6 percent      which provided $62 million in additional  revenues. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $10 million increase in revenue from Federal agencies and      other as a result of an $18 million increase in revenues from      federal agencies directly served primarily due to the FCA rate increases      and increased volume.  This increase was partially offset by a      decrease in off-system sales of $8 million due to decreased      volume. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $17 million decrease in other revenue primarily due to a $14 million      decrease in wheeling revenues and a $3 million decrease in revenues from      the sale of emission allowances. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | An      $812 million increase in revenue from Municipalities and      cooperatives primarily due to FCA revenues, which provided $605      million in additional revenues, and base      rate increases averaging 4.8 percent, which      provided $363 million in additional revenues.  These increases      were partially offset by a decrease in sales volume of 2.0 percent, which      reduced revenues by $156 million.  The decline in sales volume      resulted primarily from milder weather (7 percent fewer heating and      cooling degree days) in 2008. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $251 million increase in revenue from Industries directly      served as a result of increased sales volume of 11.9 percent, the      FCA, and fluctuations in rates.  These items contributed to      increased revenue of $141 million,      $88 million, and $22 million,respectively. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $9 million increase in revenue from Federal agencies and      other as a result of a $14 million increase in revenues from      federal agencies directly served due to the FCA rate increases, increased      sales volume of 2.3 percent, and an increase in average base rates of 4.1      percent.  The increase in revenues from federal agencies      directly served was partially offset by a $5 million decrease in      off-system sales reflecting decreased sales volume of 33.1 percent      partially offset by an increase in average base rates of 6.7      percent. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TVA      Operating ExpensesFor      the years ended September 30  |   |
|------------------------------------------------------------------------|--------|
|                                                                   |   | 2009 |   |   | Percent      Change |   |   | 2008 |   |   | Percent      Change |   |   | 2007 |   |
| Operating      expenses                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel      and purchased power                                          |   | $ | 4,745 |   |   |   | 13.6 | % |   | $ | 4,176 |   |   |   | 21.1 | % |   | $ | 3,449 |   |
| Operating      and maintenance                                         |   |   | 2,395 |   |   |   | 3.8 | % |   |   | 2,307 |   |   |   | (2.0 | %) |   |   | 2,353 |   |
| Depreciation,      amortization, and accretion                         |   |   | 1,598 |   |   |   | 30.6 | % |   |   | 1,224 |   |   |   | (16.9 | %) |   |   | 1,473 |   |
| Tax      equivalents                                                   |   |   | 544 |   |   |   | 10.8 | % |   |   | 491 |   |   |   | 8.9 | % |   |   | 451 |   |
|                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      operating expenses                                          |   | $ | 9,282 |   |   |   | 13.2 | % |   | $ | 8,198 |   |   |   | 6.1 | % |   | $ | 7,726 |   |
|                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|   | • | A      $717 million increase in fuel and purchased power expense due to deferred      fuel expense to be returned to customers in 2010 as part of the FCA      mechanism. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $113 million decrease in fuel expense resulting from a decrease in net      thermal generation of 12 percent, which reduced fuel expense by $295      million.  The decrease in net thermal generation was due to      lower demand, an increase in conventional hydroelectric generation of 4.7      billion kWh or 64 percent, and the decision to purchase more power due to      favorable market prices.  The aggregate fuel cost per      kilowatt-hour net thermal generation increased 8.8 percent and resulted in      an increase of $182 million in fuel expense.  The higher fuel      cost was primarily due to higher prices for coal and was partially offset      by lower prices for natural gas. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $35 million decrease in purchased power expense primarily due to a      decrease in the average price of purchased power of 36 percent in 2009      compared to 2008, which resulted in a $529 million reduction in      expense.  This decrease was partially offset by an increase in      purchased power volume of 5.7 percent, which increased purchased power      expense by $80 million.  Purchased power expense also increased      $414 million due to net realized losses related to natural gas derivatives      compared to net realized gains on these derivative contracts in      2008. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Other Income,      Net.  The $16 million increase in Other income, net      was largely attributable to a decrease in realized and unrealized losses      on TVA’s supplemental executive retirement plan funds and a $4 million      write-off of two economic development investments in the fourth quarter of      2008 not present in 2009.  See Note  15. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | A      $330 million increase in fuel expense resulting from an increase in the      aggregate fuel cost per kilowatt-hour net thermal generation of 10.9      percent, which resulted in $275 million in additional      expense.  Increased net generation at coal-fired, combustion      turbine, and nuclear plants of 2.9 percent resulted in an additional $55      million in expense. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $128 million increase in purchased power expense resulting from an      increase in the average price of purchased power of 22 percent, which      resulted in $251 million in additional expense.  This increase      was partially offset by a 5.7 percent decrease in volume of purchased      power, which resulted in a decrease of $68 million in purchased power      expense.  Although purchased power volume decreased in 2008      compared to 2007, TVA purchased significantly more power than planned due      to decreased hydro-electric generation of 26.1 percent as a result of      ongoing drought conditions in 2008.  Purchased power expense      also decreased $55 million due to net realized gains related to natural      gas derivatives compared to net realized losses on these derivative      contracts in 2007. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | A      $269 million increase in fuel and purchased power expense due to a lower      amount of fuel and purchased power expenses deferred in 2008 compared to      2007 to be recovered as part of the FCA mechanism in future      periods. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Interest      ExpenseFor      the years ended September 30                           |   |
|--------------------------------------------------------------------------------------|--------|
|                                                                                 |   | 2009 |   |   | PercentChange |   |   | 2008 |   |   | PercentChange |   |   | 2007 |   |
| Interest      expense                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on debt and leaseback obligations                                      |   | $ | 1,292 |   |   |   | (5.9 | %) |   | $ | 1,373 |   |   |   | (1.2 | %) |   | $ | 1,390 |   |
| Amortization      of debt discount, issue, and reacquisition costs, net              |   |   | 20 |   |   |   | 0.0 | % |   |   | 20 |   |   |   | 5.3 | % |   |   | 19 |   |
| Allowance      for funds used during construction and nuclear fuel      expenditures |   |   | (40 | ) |   |   | 135.3 | % |   |   | (17 | ) |   |   | (90.4 | %) |   |   | (177 | ) |
|     Net      interest expense                                    |   | $ | 1,272 |   |   |   | (7.6 | %) |   | $ | 1,376 |   |   |   | 11.7 | % |   | $ | 1,232 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |   | 2009 |   |   | PercentChange |   |   |   | 2008 |   |   | PercentChange |   |   |   | 2007 |   |
| Interest      rates (average)                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                                                                            |   |   | 5.62 |   |   |   | (6.3 | %) |   |   | 6.00 |   |   |   | (0.3 | %) |   |   | 6.02 |   |
| Discount      notes                                                                  |   |   | 0.32 |   |   |   | (91.4 | %) |   |   | 3.71 |   |   |   | (28.2 | %) |   |   | 5.17 |   |
| Blended                                                                              |   |   | 5.25 |   |   |   | (11.3 | %) |   |   | 5.92 |   |   |   | (0.3 | %) |   |   | 5.94 |   |

Off-Balance Sheet Arrangements

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Critical Accounting Policies andEstimates

| •   | Ash      Disposition Volume – The method and amount of coal ash removal and storage      related to the clean up could vary under different      scenarios.  Currently, TVA estimates it will transport between      3.0 and 9.0 million cubic yards of coal ash off site.  Under the      most likely scenario, TVA would remove 5.4 million cubic yards of coal ash      from the site of the ash spill. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Ash      Disposition Costs – TVA’s costs related to loading, transporting, and      disposing of coal ash are based on actual tonnage.  In      estimating how many tons TVA will have to dispose of, TVA applies a      conversion factor to the cubic yards of ash in each of the disposal      scenarios based on the density of ash materials.  Sampling and      lab analysis have shown the density of ash materials varies significantly      based on several factors.  In estimating the ash      disposition costs, TVA has used a conversion factor of approximately 1.3      tons per cubic yard of ash.  The conversion factor is multiplied      by the cost in determining the cost estimate; therefore, a higher or lower      conversion factor could significantly affect the cost      estimate. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| •   | Excluded      Costs – TVA has not included the following categories of costs because it      has determined that these costs are currently either not probable, not      reasonably estimable, or not appropriately accounted for as part of the      expense accrual: fines or regulatory directive actions, outcome of      lawsuits, future claims, long-term environmental impact costs, final      long-term disposition of ash processing area, associated capital asset      purchases, ash handling and disposition from current plant operations,      costs of remediating any discovered mixed waste during ash removal      process, and other costs not meeting the recognition      criteria.  See Note 7. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| •   | Timing      – In projecting decommissioning costs, two assumptions must be made to      estimate the timing of plant decommissioning.  First, the date      of the plant’s retirement must be estimated.  At a multiple unit      site, the expiration of the unit with the latest to expire operating      license is typically used for this purpose, or an assumption could be made      that the plant will be relicensed and operate for some time beyond the      original license term.  Second, an assumption must be made      whether decommissioning will begin immediately upon plant retirement, or      whether the plant will be held in SAFSTOR status – a status authorized by      applicable regulations which allows for a nuclear facility to be      maintained and monitored in a condition that allows the radioactivity to      decay, after which the facility is decommissioned and      dismantled.  While the impact of these assumptions cannot be      determined with precision, assuming either license extension or use of      SAFSTOR status can significantly decrease the present value of these      obligations. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Technology      and Regulation – There is limited experience with actual decommissioning      of large nuclear facilities.  Changes in technology and      experience as well as changes in regulations regarding nuclear      decommissioning could cause cost estimates to change      significantly.  TVA’s cost studies assume current technology and      regulations. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Discount      Rate – TVA uses a blended rate of 5.3 percent to calculate the present      value of the weighted estimated cash flows required to satisfy TVA’s      decommissioning obligation. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Investment      Rate of Return – TVA assumes that its decommissioning investments will      achieve a rate of return that is 5 percent greater than the rate of      inflation.  This results in a 9.2 percent estimated investment      rate of return for all periodspresented. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Cost      Escalation Factors – TVA’s decommissioning estimates include an assumption      that decommissioning costs will escalate over present cost levels by 4      percent annually. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Timing      – In projecting non-nuclear decommissioning costs, the date of the plant’s      retirement must be estimated.  TVA uses a probability-weighted      scenario approach based on management assumptions, type of plant, number      of units, and other factors to estimate the expected retirement time      period.  In instances where the retirement of a specific plant      asset differs from the anticipated plant closure date, the anticipated      retirement date of that specific asset is used.  Additionally,      TVA expects to incur certain ongoing costs subsequent to the initial plant      retirement. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Technology      and Regulation – Changes in technology and experience as well as changes      in regulations regarding non-nuclear decommissioning could cause cost      estimates to change significantly.  TVA’s cost studies generally      assume current technology and regulations.  Specific to the coal      combustion product facilities, TVA assumes that any future closures will      require more costly materials and processes than what is legally required      as of September 30, 2009. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| •   | Discount      Rate – TVA uses its incremental lending rate over a period consistent with      the remaining timeframe until the costs are expected to be incurred to      calculate the present value of the weighted estimated cash flows required      to satisfy TVA’s non-nuclear decommissioning obligation.  As of      September 30, 2009, the discount rates used in the calculations range from      1.3 percent to 5.7 percent. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Investment      Rate of Return – TVA assumes that its non-nuclear decommissioning fund      will achieve a rate of return that is 4 percent greater than the rate of      inflation.  This results in a 7.75 percent estimated investment      rate of return for all periodspresented. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Cost      Escalation Factors – TVA’s non-nuclear decommissioning estimates include      an assumption that decommissioning costs will escalate over present cost      levels at rates between 2.5 percent and 4.0 percent    annually. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Sensitivity      of Pension Costs to Changes in Assumptions |   |
|-------------------------------------------------------------|--------|
|   Actuarial      Assumption                       |   | Change      in Assumption |   |   | Impact      on 2010 Pension Cost |   |   | Impact      on 2009 Projected Benefit Obligation |   |
|                                                        |   | (Increase      in millions) |   |
| Discount      rate                                          |   |   | (0.25 | %) |   | $ | 14 |   |   | $ | 243 |   |
| Rate      of return on plan assets                          |   |   | (0.25 | %) |   | $ | 17 |   |   | NA |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |

| Sensitivity      of Post-retirement Benefit Costs to Changes in Assumptions  |   |
|-----------------------------------------------------------------------------------|--------|
| (Increase      in millions)                                                       |   | 1%      Increase |   |   | 1%      Decrease |   |
| Effect      on total of service and interest cost components                      |   | $ | 5 |   |   | $ | (6 | ) |
| Effect      on end-of-year accumulated post-retirement benefit    obligation      |   | $ | 66 |   |   | $ | 74 |   |

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Changes in Ratemaking ImpactingAccounting

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Fair Value Measurements

|   | • | Currency      swaps |
|--------|---------|---------------------|

|   | • | Swaption |
|--------|---------|----------|

|   | • | Interest      rate swaps |
|--------|---------|--------------------------|

|   | • | Coal      contracts with volume options |
|--------|---------|-----------------------------------------|

|   | • | Commodity      derivatives under the FTP (swaps, futures, options on futures, and other      financial instruments) |
|--------|---------|---------------------------------------------------------------------------------------------------------------------|

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New Accounting Standards andInterpretations

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Legislative and Regulatory Matters

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Environmental Matters

Legal Proceedings

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Risk Management Activities

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| Customer      Credit RiskAs      of September 30                                                                             |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                              |   | 2009 |   |   | 2008 |   |
| Trade      Accounts Receivable 1                                                                                                  |   |   |   |   |   |   |
| Investment      grade                                                                                                             |   |   |   |   |   |   |
|      Municipalities      and cooperative distributor customers                                           |   | $ | 790 |   |   | $ | 868 |   |
|      Exchange      power arrangements                                                                    |   |   | 2 |   |   |   | 4 |   |
|      Industries      and federal agencies directly served                                                |   |   | 26 |   |   |   | 46 |   |
| Internally      rated - investment grade                                                                                          |   |   |   |   |   |   |   |   |
|      Municipalities      and cooperative distributor customers                                           |   |   | 417 |   |   |   | 430 |   |
|      Industries      and federal agencies directly served                                                |   |   | — |   |   |   | 3 |   |
| Non-investment      grade                                                                                                         |   |   |   |   |   |   |   |   |
|      Industries      and federal agencies directly served                                                |   |   | 5 |   |   |   | 20 |   |
| Internally      rated - non-investment grade                                                                                      |   |   |   |   |   |   |   |   |
|      Exchange      power arrangements                                                                    |   |   | — |   |   |   | 1 |   |
|      Industries      and federal agencies directly served                                                |   |   | 9 |   |   |   | 9 |   |
|      Subtotal                                                                                            |   |   | 1,249 |   |   |   | 1,381 |   |
| Other      Accounts Receivable                                                                                                    |   |   |   |   |   |   |   |   |
| Miscellaneous      accounts                                                                                                       |   |   | 56 |   |   |   | 26 |   |
| Provision      for uncollectible accounts                                                                                         |   |   | (2 | ) |   |   | (2 | ) |
|      Subtotal                                                                                            |   |   | 54 |   |   |   | 24 |   |
|           Total                                                                 |   | $ | 1,303 |   |   | $ | 1,405 |   |
| Note (1) Includes      unbilled power receivables of $940 million and $1.0 billion in 2009 and      2008, respectively. |   |

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| •   | A      downgrade would increase TVA’s interest expense by increasing the interest      rates that TVA pays on debt securities that it issues.  An      increase in TVA’s interest expense would reduce the amount of cash      available for other purposes, which could result in the need to increase      borrowings, to reduce other expenses or capital investments, or to      increase electricity rates. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade could result in TVA having to post additional collateral under      certain physical and financial contracts that contain rating      triggers. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade below a contractual threshold could prevent TVA from borrowing      under two credit facilities totaling $2.0  billion. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| •   | A      downgrade could lower the price of TVA securities in the secondary market,      thereby hurting investors who sell TVA securities after the downgrade and      diminishing the attractiveness and marketability of TVA    Bonds. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Subsequent Events

ITEM 7A.  QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK

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ITEM 8.  FINANCIAL STATEMENTS ANDSUPPLEMENTARY DATA

| TENNESSEE      VALLEY AUTHORITYSTATEMENTS OF INCOMEFor      the years ended September 30(in      millions) |   |
|------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                       |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Operating      revenues                                                                                    |   |   |   |   |   |   |   |   |   |
| Sales      of electricity                                                                                  |   |   |   |   |   |   |   |   |   |
|     Municipalities      and cooperatives                                               |   | $ | 9,644 |   |   | $ | 8,659 |   |   | $ | 7,847 |   |
|     Industries      directly served                                                    |   |   | 1,367 |   |   |   | 1,472 |   |   |   | 1,221 |   |
|     Federal      agencies and other                                                    |   |   | 131 |   |   |   | 121 |   |   |   | 112 |   |
| Other      revenue                                                                                         |   |   | 113 |   |   |   | 130 |   |   |   | 146 |   |
| Operating      revenues                                                                                    |   |   | 11,255 |   |   |   | 10,382 |   |   |   | 9,326 |   |
| Revenue      capitalized during pre-commercial plant operations                                            |   |   | – |   |   |   | – |   |   |   | (57 | ) |
| Net      operating revenues                                                                                |   |   | 11,255 |   |   |   | 10,382 |   |   |   | 9,269 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel      and purchased power                                                                              |   |   | 4,745 |   |   |   | 4,176 |   |   |   | 3,449 |   |
| Operating      and maintenance                                                                             |   |   | 2,395 |   |   |   | 2,307 |   |   |   | 2,353 |   |
| Depreciation,      amortization, and accretion                                                             |   |   | 1,598 |   |   |   | 1,224 |   |   |   | 1,473 |   |
| Tax      equivalents                                                                                       |   |   | 544 |   |   |   | 491 |   |   |   | 451 |   |
| Total      operating expenses                                                                              |   |   | 9,282 |   |   |   | 8,198 |   |   |   | 7,726 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                                                      |   |   | 1,973 |   |   |   | 2,184 |   |   |   | 1,543 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income, net                                                                                     |   |   | 25 |   |   |   | 9 |   |   |   | 71 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      gain on derivative contracts, net                                                          |   |   | — |   |   |   | — |   |   |   | 41 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on debt and leaseback obligations                                                            |   |   | 1,292 |   |   |   | 1,373 |   |   |   | 1,390 |   |
| Amortization      of debt discount, issue, and reacquisition costs, net                                    |   |   | 20 |   |   |   | 20 |   |   |   | 19 |   |
| Allowance      for funds used during construction and nuclear fuel      expenditures                       |   |   | (40 | ) |   |   | (17 | ) |   |   | (177 | ) |
| Net      interest expense                                                                                  |   |   | 1,272 |   |   |   | 1,376 |   |   |   | 1,232 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                            |   | $ | 726 |   |   | $ | 817 |   |   | $ | 423 |   |
|  The      accompanying notes are an integral part of these financial      statements.                 |   |

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| TENNESSEE      VALLEY AUTHORITYBALANCE SHEETSAt      September 30(in      millions)        |   |
|--------------------------------------------------------------------------------------------|--------|
| ASSETS                                                                                     |   |
|                                                                                       |   | 2009 |   |   | 2008 |   |
| Current      assets                                                                        |   |   |   |   |   |   |
| Cash      and cash equivalents                                                             |   | $ | 201 |   |   | $ | 213 |   |
| Restricted      cash and investments                                                       |   |   | — |   |   |   | 106 |   |
| Accounts      receivable, net                                                              |   |   | 1,303 |   |   |   | 1,405 |   |
| Inventories      and other, net                                                            |   |   | 961 |   |   |   | 779 |   |
| Total      current assets                                                                  |   |   | 2,465 |   |   |   | 2,503 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Property,      plant, and equipment                                                        |   |   |   |   |   |   |   |   |
| Completed      plant                                                                       |   |   | 41,286 |   |   |   | 40,079 |   |
| Less      accumulated depreciation                                                         |   |   | (18,086 | ) |   |   | (16,983 | ) |
| Net      completed plant                                                                   |   |   | 23,200 |   |   |   | 23,096 |   |
| Construction      in progress                                                              |   |   | 2,600 |   |   |   | 1,892 |   |
| Nuclear      fuel and capital leases                                                       |   |   | 961 |   |   |   | 791 |   |
| Total      property, plant, and equipment, net                                             |   |   | 26,761 |   |   |   | 25,779 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Investment      funds                                                                      |   |   | 983 |   |   |   | 956 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Regulatory      and other long-term assets                                                 |   |   |   |   |   |   |   |   |
| Deferred      nuclear generating units                                                     |   |   | 2,347 |   |   |   | 2,738 |   |
| Other      regulatory assets                                                               |   |   | 7,287 |   |   |   | 4,166 |   |
|   Subtotal                                                                       |   |   | 9,634 |   |   |   | 6,904 |   |
| Other      long-term assets                                                                |   |   | 174 |   |   |   | 995 |   |
| Total      regulatory and other long-term assets                                           |   |   | 9,808 |   |   |   | 7,899 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Total      assets                                                                          |   | $ | 40,017 |   |   | $ | 37,137 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| LIABILITIES      AND PROPRIETARY CAPITAL                                                   |   |
| Current      liabilities                                                                   |   |   |   |   |   |   |   |   |
| Accounts      payable and accrued liabilities                                              |   | $ | 2,108 |   |   | $ | 1,333 |   |
| Environmental      cleanup costs - Kingston ash spill                                      |   |   | 348 |   |   |   | – |   |
| Collateral      funds held                                                                 |   |   | – |   |   |   | 103 |   |
| Accrued      interest                                                                      |   |   | 401 |   |   |   | 441 |   |
| Current      portion of leaseback obligations                                              |   |   | 463 |   |   |   | 54 |   |
| Current      portion of energy prepayment obligations                                      |   |   | 105 |   |   |   | 106 |   |
| Short-term      debt, net                                                                  |   |   | 844 |   |   |   | 185 |   |
| Current      maturities of long-term debt                                                  |   |   | 8 |   |   |   | 2,030 |   |
| Total      current liabilities                                                             |   |   | 4,277 |   |   |   | 4,252 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                     |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                     |   |   | 4,805 |   |   |   | 3,514 |   |
| Regulatory      liabilities                                                                |   |   | 130 |   |   |   | 860 |   |
| Environmental      cleanup costs - Kingston ash spill                                      |   |   | 354 |   |   |   | – |   |
| Asset      retirement obligations                                                          |   |   | 2,683 |   |   |   | 2,318 |   |
| Leaseback      obligations                                                                 |   |   | 940 |   |   |   | 1,299 |   |
| Energy      prepayment obligations                                                         |   |   | 822 |   |   |   | 927 |   |
| Total      other liabilities                                                               |   |   | 9,734 |   |   |   | 8,918 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Long-term      debt, net                                                                   |   |   | 21,788 |   |   |   | 20,404 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                     |   |   | 35,799 |   |   |   | 33,574 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Commitments and contingencies      (Note 20)                                               |   |   |   |   |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Proprietary      capital                                                                   |   |   |   |   |   |   |   |   |
| Appropriation      investment                                                              |   |   | 4,703 |   |   |   | 4,723 |   |
| Retained      earnings                                                                     |   |   | 3,291 |   |   |   | 2,571 |   |
| Accumulated      other comprehensive loss                                                  |   |   | (75 | ) |   |   | (37 | ) |
| Accumulated      net expense of stewardship programs                                       |   |   | (3,701 | ) |   |   | (3,694 | ) |
| Total      proprietary capital                                                             |   |   | 4,218 |   |   |   | 3,563 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Total      liabilities and proprietary capital                                             |   | $ | 40,017 |   |   | $ | 37,137 |   |
|  The      accompanying notes are an integral part of these financial      statements. |   |

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| TENNESSEE      VALLEY AUTHORITYSTATEMENTS OF CASH FLOWSFor      the years ended September 30(in      millions)                                           |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                     |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Cash      flows from operating activities                                                                                                                |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                                                          |   | $ | 726 |   |   | $ | 817 |   |   | $ | 423 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|    Depreciation,      amortization, and accretion                                                                                         |   |   | 1,618 |   |   |   | 1,244 |   |   |   | 1,492 |   |
|    Nuclear      refueling outage amortization                                                                                             |   |   | 122 |   |   |   | 107 |   |   |   | 86 |   |
|    Amortization      of nuclear fuel                                                                                                      |   |   | 216 |   |   |   | 189 |   |   |   | 137 |   |
|    Non-cash      retirement benefit expense                                                                                               |   |   | 146 |   |   |   | 145 |   |   |   | 201 |   |
|    Net      unrealized gain on derivative contracts                                                                                       |   |   | — |   |   |   | — |   |   |   | (41 | ) |
|    Prepayment      credits applied to revenue                                                                                             |   |   | (105 | ) |   |   | (105 | ) |   |   | (105 | ) |
|    Fuel      cost adjustment deferral                                                                                                     |   |   | 850 |   |   |   | 123 |   |   |   | (150 | ) |
| Changes      in current assets and liabilities                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|    Accounts      receivable, net                                                                                                          |   |   | 90 |   |   |   | (59 | ) |   |   | (144 | ) |
|    Inventories      and other, net                                                                                                        |   |   | (182 | ) |   |   | (138 | ) |   |   | (98 | ) |
|    Accounts      payable and accrued liabilities                                                                                          |   |   | 72 |   |   |   | (88 | ) |   |   | 103 |   |
|    Accrued      interest                                                                                                                  |   |   | (40 | ) |   |   | 35 |   |   |   | 4 |   |
| Pension      contributions                                                                                                                               |   |   | (1,005 | ) |   |   | (165 | ) |   |   | (75 | ) |
| Refueling      outage costs                                                                                                                              |   |   | (128 | ) |   |   | (150 | ) |   |   | (96 | ) |
| Environmental      cleanup costs – Kingston ash spill                                                                                              |   |   | (231 | ) |   |   | — |   |   |   | — |   |
| Other,      net                                                                                                                                          |   |   | (8 | ) |   |   | 2 |   |   |   | 51 |   |
| Net      cash provided by operating activities                                                                                                           |   |   | 2,141 |   |   |   | 1,957 |   |   |   | 1,788 |   |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction      expenditures                                                                                                                           |   |   | (1,771 | ) |   |   | (1,508 | ) |   |   | (1,379 | ) |
| Combustion      turbine asset acquisitions                                                                                                               |   |   | — |   |   |   | (466 | ) |   |   | (111 | ) |
| Nuclear      fuel expenditures                                                                                                                           |   |   | (432 | ) |   |   | (322 | ) |   |   | (203 | ) |
| Change      in restricted cash and investments                                                                                                           |   |   | (17 | ) |   |   | 25 |   |   |   | 48 |   |
| Purchases      of investments                                                                                                                            |   |   | (42 | ) |   |   | (39 | ) |   |   | (44 | ) |
| Loans      and other receivables                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|       Advances                                                                                                             |   |   | (13 | ) |   |   | (6 | ) |   |   | (16 | ) |
|       Repayments                                                                                                           |   |   | 11 |   |   |   | 13 |   |   |   | 16 |   |
| Other,      net                                                                                                                                          |   |   | (1 | ) |   |   | 4 |   |   |   | 3 |   |
| Net      cash used in investing activities                                                                                                               |   |   | (2,265 | ) |   |   | (2,299 | ) |   |   | (1,686 | ) |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|     Issues                                                                                                                           |   |   | 2,369 |   |   |   | 2,105 |   |   |   | 1,040 |   |
|     Redemptions      and repurchases                                                                                                 |   |   | (2,874 | ) |   |   | (689 | ) |   |   | (470 | ) |
| Short-term      debt issues (redemptions), net                                                                                                           |   |   | 659 |   |   |   | (1,237 | ) |   |   | (955 | ) |
| Proceeds      from sale/leaseback financing                                                                                                              |   |   | 104 |   |   |   | 325 |   |   |   | – |   |
| Payments      on leases and leaseback financing                                                                                                          |   |   | (79 | ) |   |   | (43 | ) |   |   | (37 | ) |
| Financing      costs, net                                                                                                                                |   |   | (33 | ) |   |   | (32 | ) |   |   | (11 | ) |
| Payments      to U.S. Treasury                                                                                                                           |   |   | (33 | ) |   |   | (40 | ) |   |   | (40 | ) |
| Other                                                                                                                                                    |   |   | (1 | ) |   |   | 1 |   |   |   | – |   |
| Net      cash provided by (used in) financing activities                                                                                                 |   |   | 112 |   |   |   | 390 |   |   |   | (473 | ) |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      change in cash and cash equivalents                                                                                                             |   |   | (12 | ) |   |   | 48 |   |   |   | (371 | ) |
| Cash      and cash equivalents at beginning of year                                                                                                      |   |   | 213 |   |   |   | 165 |   |   |   | 536 |   |
|                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of year                                                                                                            |   | $ | 201 |   |   | $ | 213 |   |   | $ | 165 |   |
|  See      Note 16 for supplemental cash flow information. The      accompanying notes are an integral part of these financial      statements. |   |

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| TENNESSEE      VALLEY AUTHORITYSTATEMENTS OF CHANGES IN PROPRIETARY      CAPITALFor      the years ended September 30(in      millions) |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                    |   |   Appropriation      Investment |   |   |   Retained      Earnings |   |   | Accumulated      Other Comprehensive Income (Loss) |   |   | Accumulated      Net Expense of Stewardship Programs |   |   |    Total |   |   |   Comprehensive      Income (Loss) |   |
|                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at September 30, 2006                                                                                                      |   | $ | 4,763 |   |   | $ | 1,349 |   |   | $ | 43 |   |   | $ | (3,672 | ) |   | $ | 2,483 |   |   |   |   |
| Net      income (loss)                                                                                                                  |   |   | – |   |   |   | 434 |   |   |   | – |   |   |   | (11 | ) |   |   | 423 |   |   | $ | 423 |   |
| Return      on Power Facility Appropriation Investment                                                                                  |   |   | – |   |   |   | (20 | ) |   |   | – |   |   |   | – |   |   |   | (20 | ) |   |   | – |   |
| Accumulated      other comprehensive loss                                                                                               |   |   | – |   |   |   | – |   |   |   | (62 | ) |   |   | – |   |   |   | (62 | ) |   |   | (62 | ) |
| Return      of Power Facility Appropriation Investment                                                                                  |   |   | (20 | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (20 | ) |   |   | – |   |
|                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at September 30, 2007                                                                                                      |   | $ | 4,743 |   |   | $ | 1,763 |   |   | $ | (19 | ) |   | $ | (3,683 | ) |   | $ | 2,804 |   |   | $ | 361 |   |
| Net      income (loss)                                                                                                                  |   |   | – |   |   |   | 828 |   |   |   | – |   |   |   | (11 | ) |   |   | 817 |   |   | $ | 817 |   |
| Return      on Power Facility Appropriation Investment                                                                                  |   |   | – |   |   |   | (20 | ) |   |   | – |   |   |   | – |   |   |   | (20 | ) |   |   | – |   |
| Accumulated      other comprehensive loss                                                                                               |   |   | – |   |   |   | – |   |   |   | (18 | ) |   |   | – |   |   |   | (18 | ) |   |   | (18 | ) |
| Return      of Power Facility Appropriation Investment                                                                                  |   |   | (20 | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (20 | ) |   |   | – |   |
|                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at September 30, 2008                                                                                                      |   | $ | 4,723 |   |   | $ | 2,571 |   |   | $ | (37 | ) |   | $ | (3,694 | ) |   | $ | 3,563 |   |   | $ | 799 |   |
| Net      income (loss)                                                                                                                  |   |   | – |   |   |   | 733 |   |   |   | – |   |   |   | (7 | ) |   |   | 726 |   |   | $ | 726 |   |
| Return      on Power Facility Appropriation Investment                                                                                  |   |   | – |   |   |   | (13 | ) |   |   | – |   |   |   | – |   |   |   | (13 | ) |   |   | – |   |
| Accumulated      other comprehensive loss                                                                                               |   |   | – |   |   |   | – |   |   |   | (38 | ) |   |   | – |   |   |   | (38 | ) |   |   | (38 | ) |
| Return      of Power Facility Appropriation Investment                                                                                  |   |   | (20 | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (20 | ) |   |   | – |   |
|                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at September 30, 2009                                                                                                      |   | $ | 4,703 |   |   | $ | 3,291 |   |   | $ | (75 | ) |   | $ | (3,701 | ) |   | $ | 4,218 |   |   | $ | 688 |   |
|  The      accompanying notes are an integral part of these financial      statements.                                              |   |

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NOTES TO FINANCIAL STATEMENTS

| Note No. |   |                                                        |   | Page No. |
|----------|--------|-------------------------------------------------------------|--------|----------|
| 1        |   | Summary of Significant Accounting      Policies             |   | 85       |
| 2        |   | Impact of New Accounting Standards and      Interpretations |   | 91       |
| 3        |   | Accounts Receivable                                         |   | 94       |
| 4        |   | Completed Plant                                             |   | 94       |
| 5        |   | Other Long-Term Assets                                      |   | 95       |
| 6        |   | Regulatory Assets and      Liabilities                      |   | 95       |
| 7        |   | Kingston Fossil Plant Ash Spill                             |   | 98       |
| 8        |   | Other Long-Term Liabilities                                 |   | 99       |
| 9        |   | Asset Retirement Obligations                                |   | 99       |
| 10       |   | Debt                                                        |   | 100      |
| 11       |   | Seven States Power Corporation      Obligation              |   | 106      |
| 12       |   | Risk Management Activities and      Derivative Transactions |   | 107      |
| 13       |   | Fair Value Measurements                                     |   | 114      |
| 14       |   | Proprietary Capital                                         |   | 118      |
| 15       |   | Other Income, Net                                           |   | 120      |
| 16       |   | Supplemental Cash Flow      Information                     |   | 120      |
| 17       |   | Variable Interest Entities                                  |   | 120      |
| 18       |   | Benefit Plans                                               |   | 120      |
| 19       |   | Asset Acquisitions and      Dispositions                    |   | 128      |
| 20       |   | Commitments andContingencies                                |   | 129      |
| 21       |   | Related Parties                                             |   | 138      |
| 22       |   | Unaudited Quarterly Financial      Information              |   | 138      |
| 23       |   | Subsequent Events                                           |   | 139      |

1.  Summary of Significant AccountingPolicies

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| TVA      Property, Plant, and Equipment Depreciation RatesAs      of September 30  |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Asset      Class:                                                                       |   | (percent) |   |
|   Nuclear                                                                     |   |   | 2.59 |   |   |   | 2.57 |   |   |   | 2.29 |   |
|   Coal-Fired                                                                  |   |   | 3.22 |   |   |   | 3.44 |   |   |   | 3.59 |   |
|   Hydroelectric                                                               |   |   | 1.65 |   |   |   | 1.72 |   |   |   | 1.82 |   |
|   Combustion      turbine/diesel generators                                   |   |   | 4.09 |   |   |   | 4.39 |   |   |   | 4.70 |   |
|   Transmission                                                                |   |   | 3.40 |   |   |   | 2.74 |   |   |   | 2.53 |   |
|   Other                                                                       |   |   | 4.91 |   |   |   | 6.38 |   |   |   | 7.05 |   |

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2.  Impact of New Accounting Standardsand Interpretations

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3.  Accounts Receivable

| Accounts      ReceivableAs      of September 30  |   |
|-------------------------------------------------------|--------|
|                                                  |   | 2009 |   |   | 2008 |   |
|                                                  |   |   |   |   |   |   |
| Power      receivables billed                         |   | $ | 309 |   |   | $ | 357 |   |
| Power      receivables unbilled                       |   |   | 940 |   |   |   | 1,000 |   |
| Fuel      cost adjustment – current             |   | - |   |   |   | 24 |   |
|    Total      power receivables        |   |   | 1,249 |   |   |   | 1,381 |   |
|                                                  |   |   |   |   |   |   |   |   |
| Other      receivables                                |   |   | 56 |   |   |   | 26 |   |
| Allowance      for uncollectible accounts             |   | $ | (2 | ) |   | $ | (2 | ) |
|    Net      accounts receivable        |   | $ | 1,303 |   |   | $ | 1,405 |   |

4.  Completed Plant

| TVA      Completed PlantAs      of September 30  |   |
|-------------------------------------------------------|--------|
|                                                  |   | 2009 |   |   | 2008 |   |
|                                                  |   | Cost |   |   | Accumulated      Depreciation |   |   | Net |   |   | Cost |   |   | Accumulated      Depreciation |   |   | Net |   |
| Coal-Fired                                            |   | $ | 12,171 |   |   | $ | 6,286 |   |   | $ | 5,885 |   |   | $ | 11,371 |   |   | $ | 5,950 |   |   | $ | 5,421 |   |
| Combustion      turbine                               |   |   | 1,653 |   |   |   | 678 |   |   |   | 975 |   |   |   | 1,608 |   |   |   | 614 |   |   |   | 994 |   |
| Nuclear                                               |   |   | 17,634 |   |   |   | 7,440 |   |   |   | 10,194 |   |   |   | 17,598 |   |   |   | 6,982 |   |   |   | 10,616 |   |
| Transmission                                          |   |   | 5,201 |   |   |   | 1,899 |   |   |   | 3,302 |   |   |   | 5,074 |   |   |   | 1,745 |   |   |   | 3,329 |   |
| Hydroelectric                                         |   |   | 2,154 |   |   |   | 791 |   |   |   | 1,363 |   |   |   | 2,098 |   |   |   | 762 |   |   |   | 1,336 |   |
| Other      electrical plant                           |   |   | 1,501 |   |   |   | 657 |   |   |   | 844 |   |   |   | 1,358 |   |   |   | 604 |   |   |   | 754 |   |
|     Subtotal                      |   |   | 40,314 |   |   |   | 17,751 |   |   |   | 22,563 |   |   |   | 39,107 |   |   |   | 16,657 |   |   |   | 22,450 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multipurpose      dams                                |   |   | 928 |   |   |   | 323 |   |   |   | 605 |   |   |   | 928 |   |   |   | 316 |   |   |   | 612 |   |
| Other      stewardship                                |   |   | 44 |   |   |   | 12 |   |   |   | 32 |   |   |   | 44 |   |   |   | 10 |   |   |   | 34 |   |
|     Subtotal                      |   |   | 972 |   |   |   | 335 |   |   |   | 637 |   |   |   | 972 |   |   |   | 326 |   |   |   | 646 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                 |   | $ | 41,286 |   |   | $ | 18,086 |   |   | $ | 23,200 |   |   | $ | 40,079 |   |   | $ | 16,983 |   |   | $ | 23,096 |   |

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5.  Other Long-Term Assets

| Other      Long-Term AssetsAs      of September 30 |   |
|----------------------------------------------------|--------|
|                                               |   | 2009 |   |   | 2008 |   |
| Loans      and long-term receivables, net          |   | $ | 77 |   |   | $ | 81 |   |
| Currency      swap assets                          |   |   | 7 |   |   |   | 101 |   |
| Coal      contracts with volume options assets     |   |   | 87 |   |   |   | 813 |   |
| Other      long-term assets                        |   |   | 3 |   |   |   | — |   |
| Total      other long-term assets                  |   | $ | 174 |   |   | $ | 995 |   |

6.  Regulatory Assets andLiabilities

| TVA      Regulatory Assets and LiabilitiesAs      of September 30        |   |
|--------------------------------------------------------------------------|--------|
|                                                                     |   | 2009 |   |   | 2008 |   |
| Regulatory      Assets:                                                  |   |   |   |   |   |   |
| Deferred      other post-retirement benefit costs                        |   | $ | 298 |   |   | $ | 157 |   |
| Deferred      pension costs                                              |   |   | 3,764 |   |   |   | 2,120 |   |
| Nuclear      decommissioning costs                                       |   |   | 909 |   |   |   | 764 |   |
| Non-nuclear      decommissioning costs                                   |   |   | 351 |   |   |   | 349 |   |
| Debt      reacquisition costs                                            |   |   | 195 |   |   |   | 209 |   |
| Unrealized      losses relating to TVA’s Financial Trading Program |   |   | 85 |   |   |   | 146 |   |
| Unrealized      losses on coal contracts with volume options             |   |   | 70 |   |   |   | — |   |
| Unrealized      losses on certain swap and swaption contracts            |   |   | 498 |   |   |   | 226 |   |
| Environmental      cleanup costs - Kingston ash spill                    |   |   | 933 |   |   |   | — |   |
| Deferred      outage costs                                               |   |   | 144 |   |   |   | 139 |   |
| Deferred      capital lease asset costs                                  |   |   | 40 |   |   |   | 52 |   |
| Fuel      cost adjustment: long-term                                     |   |   | — |   |   |   | 4 |   |
|    Subtotal                                               |   |   | 7,287 |   |   |   | 4,166 |   |
| Deferred      nuclear generating units                                   |   |   | 2,347 |   |   |   | 2,738 |   |
|    Subtotal                                               |   |   | 9,634 |   |   |   | 6,904 |   |
| Fuel      cost adjustment receivable: short-term                         |   |   | — |   |   |   | 24 |   |
|                                                                     |   |   |   |   |   |   |   |   |
|    Total                                                  |   | $ | 9,634 |   |   | $ | 6,928 |   |
|                                                                     |   |   |   |   |   |   |   |   |
| Regulatory      Liabilities:                                             |   |   |   |   |   |   |   |   |
| Unrealized      gains on coal contracts with volume options              |   | $ | 87 |   |   | $ | 813 |   |
| Capital      lease liabilities                                           |   |   | 26 |   |   |   | 47 |   |
| Unrealized      gains relating to TVA’s Financial Trading Program  |   |   | 17 |   |   |   | — |   |
|    Subtotal                                               |   |   | 130 |   |   |   | 860 |   |
| Reserve      for future generation                                       |   |   | 67 |   |   |   | 70 |   |
| Accrued      tax equivalents                                             |   |   | 81 |   |   |   | 40 |   |
| Fuel      cost adjustment liability short-term                           |   |   | 822 |   |   |   | — |   |
|                                                                     |   |   |   |   |   |   |   |   |
|    Total                                                  |   | $ | 1,100 |   |   | $ | 970 |   |

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7.  Kingston Fossil Plant AshSpill

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8.  Other Long-Term Liabilities

| Other      Long-Term LiabilitiesAs      of September 30     |   |
|-------------------------------------------------------------|--------|
|                                                        |   | 2009 |   |   | 2008 |   |
| Currency      swap liabilities                              |   | $ | 51 |   |   | $ | — |   |
| Swaption      liability                                     |   |   | 592 |   |   |   | 416 |   |
| Interest      rate swap liabilities                         |   |   | 287 |   |   |   | 195 |   |
| Coal      contracts with volume options liabilities         |   |   | 80 |   |   |   | — |   |
| Post-retirement      and postemployment benefit obligations |   |   | 3,678 |   |   |   | 2,736 |   |
| Other      long-term liability obligations                  |   |   | 117 |   |   |   | 167 |   |
| Total      other long-term liabilities                      |   | $ | 4,805 |   |   | $ | 3,514 |   |

9.  Asset Retirement Obligations

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| Reconciliation      of Asset Retirement Obligation LiabilityAs      of September 30  |   |
|-------------------------------------------------------------------------------------------|--------|
|                                                                                      |   | 2009 |   |   | 2008 |   |
| Balance      at beginning of period                                                       |   | $ | 2,318 |   |   | $ | 2,189 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
|    Changes      in nuclear estimates to future cash flows                  |   |   | 11 |   |   |   | — |   |
|    Non-nuclear      additional obligations                                 |   |   | 1 |   |   |   | 8 |   |
|    Non-nuclear      additional obligations (ash storage areas)             |   |   | 224 |   |   |   | — |   |
|                                                                                      |   |   | 236 |   |   |   | 8 |   |
| Add:  ARO      accretion expense                                                |   |   |   |   |   |   |   |   |
|    Nuclear      accretion (recorded as a regulatory asset)                 |   |   | 98 |   |   |   | 92 |   |
|    Non-nuclear      accretion (recorded as a regulatory asset)             |   |   | 31 |   |   |   | 29 |   |
|                                                                                      |   |   | 129 |   |   |   | 121 |   |
|                                                                                      |   |   |   |   |   |   |   |   |
| Balance      at end of period                                                             |   | $ | 2,683 |   |   | $ | 2,318 |   |

10.  Debt

| •   | the      remainder of TVA’s gross powerrevenues |
|---------------------|-------------------------------------------------------|

| o   | after      deducting |
|---------------|----------------------|

| –   | the      costs of operating, maintaining, and administering its power properties,      and |
|---------------------|--------------------------------------------------------------------------------------------|

| –   | payments      to states and counties in lieu of taxes,but |
|---------------------|-----------------------------------------------------------|

| o   | before      deducting depreciation accruals or other charges representing the      amortization of capital expenditures,plus |
|---------------|------------------------------------------------------------------------------------------------------------------------------|

| •   | the      net proceeds from the sale or other disposition of any power facility or      interest therein. |
|---------------------|----------------------------------------------------------------------------------------------------------|

|   | • | the      depreciation accruals and other charges representing the amortization of      capital expenditures and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | • | the net      proceeds from any disposition of power  facilities |
|--------|---------|-----------------------------------------------------------------|

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|   | for      either |
|--------|-----------------|

|   | • | the reduction      of its capital obligations (including Bonds and the Power Facility      Appropriation Investment) or |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------|

|   | • | investment      in power assets. |
|--------|---------|----------------------------------|

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| Debt      Securities Activity from October 1, 2007, to September 30,      2009  |   |
|--------------------------------------------------------------------------------------|--------|
| Redemptions/Maturities:                                                              |   | 2009 |   |   | 2008 |   |
|    electronotes®                                                 |   |   |   |   |   |   |
|       First      quarter                               |   | $ | — |   |   | $ | — |   |
|       Second      quarter                              |   |   | 558 |   |   |   | 197 |   |
|       Third      quarter                               |   |   | 3 |   |   |   | 115 |   |
|       Fourth      quarter                              |   |   | 248 |   |   |   | — |   |
|    1998      Series G                                                 |   |   | 2,000 |   |   |   | — |   |
|    1998      Series D                                                 |   |   | — |   |   |   | 7 |   |
|    1999      Series A                                                 |   |   | — |   |   |   | 10 |   |
|    1999      Series A                                                 |   |   | 25 |   |   |   | 102 |   |
|    2009      Series A                                                 |   |   | 1 |   |   |   | — |   |
|    1998      Series D                                                 |   |   | 20 |   |   |   | 108 |   |
|    2009      Series B                                                 |   |   | 19 |   |   |   | — |   |
|    1997      Series E                                                 |   |   | — |   |   |   | 100 |   |
|    2003      Series C                                                 |   |   | — |   |   |   | 50 |   |
| Total                                                                                |   | $ | 2,874 |   |   | $ | 689 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Issues:                                                                              |   |   |   |   |   |   |   |   |
|    electronotes®                                                 |   |   |   |   |   |   |   |   |
|       First      quarter                               |   | $ | 39 |   |   | $ | 41 |   |
|       Second      quarter                              |   |   | 89 |   |   |   | 61 |   |
|       Third      quarter                               |   |   | 115 |   |   |   | 3 |   |
|       Fourth      quarter                              |   |   | 135 |   |   |   | — |   |
|    2008      Series A                                                 |   |   | — |   |   |   | 500 |   |
|    2008      Series B                                                 |   |   | — |   |   |   | 1,000 |   |
|    2008      Series C                                                 |   |   | — |   |   |   | 500 |   |
|    2009      Series A                                                 |   |   | 22 |   |   |   | — |   |
|    2009      Series B                                                 |   |   | 469 |   |   |   | — |   |
|    2009      Series C                                                 |   |   | 1,500 |   |   |   | — |   |
| Total                                                                                |   | $ | 2,369 |   |   | $ | 2,105 |   |

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| Short-Term      DebtAs      of September 30                            |           |
|------------------------------------------------------------------------|----------------|
|  CUSIP      or Other Identifier                                   |  Maturity | Call/(Put)      Date |   | Coupon      Rate |   |   | 2009Par      Amount |   |   | 2008Par      Amount |   |
| Discount      Notes (net of discount)                                  |           |   |   |   |   |   | $ | 844 |   |   | $ | 185 |   |
| Current      maturities of long-term debt                              |           |   |   |   |   |   |   |   |   |   |   |   |   |
| 880591DB5                                                              | 11/13/2008     |   |   |   | 5.38 | % |   |   | — |   |   |   | 2,000 |   |
| 88059TCW9                                                              | 03/15/2009     | 03/15/2005 |   |   | 3.20 | % |   |   | — |   |   |   | 30 |   |
| 880591EE8                                                              | 11/15/2009     |   |   |   | 2.25 | % |   |   | 3 |   |   |   | — |   |
| 88059TEL1                                                              | 05/15/2010     |   |   |   | 2.65 | % |   |   | 3 |   |   |   | — |   |
| 880591EF5                                                              | 06/15/2010     |   |   |   | 3.77 | % |   |   | 2 |   |   |   | — |   |
| Current      maturities of long-term debt                              |           |   |   |   |   |   |   |   | 8 |   |   |   | 2,030 |   |
|                                                                   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total      debt due within one year, net |           |   |   |   |   |   |   | $ | 852 |   |   | $ | 2,215 |   |

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Table of Contents

| Long-Term      Debt1As      of September 30    |           |
|-----------------------------------------------------|----------------|
|  CUSIP      or Other Identifier                |  Maturity | Call/(Put)Date |   | CouponRate |   |   | 2009Par      Amount |   |   | 2008Par      Amount |   |
| 880591EE8                                           | 11/15/2010     |   |   |   | 2.250 | % |   | $ | 2 |   |   | $ | — |   |
| 88059TEL1                                           | 11/15/2010     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591EF5                                           | 12/15/2010     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 880591DN9                                           | 01/18/2011     |   |   |   | 5.625 | % |   |   | 1,000 |   |   |   | 1,000 |   |
| 880591EE8                                           | 05/15/2011     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 05/15/2011     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591EF5                                           | 06/15/2011     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
|      Maturing      in 2011 |           |   |   |   |   |   |   |   | 1,008 |   |   |   | 1,000 |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 880591EE8                                           | 11/15/2011     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 11/15/2011     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591EF5                                           | 12/15/2011     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 880591EE8                                           | 05/15/2012     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 05/15/2012     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591DL3                                           | 05/23/2012     |   |   |   | 7.140 | % |   |   | 29 |   |   |   | 29 |   |
| 880591DT6                                           | 05/23/2012     |   |   |   | 6.790 | % |   |   | 1,486 |   |   |   | 1,486 |   |
| 880591EF5                                           | 06/15/2012     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
|      Maturing      in 2012 |           |   |   |   |   |   |   |   | 1,523 |   |   |   | 1,515 |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 880591EE8                                           | 11/15/2012     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 11/15/2012     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591EF5                                           | 12/15/2012     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 88059TBR1                                           | 01/15/2013     | 01/15/2005 |   |   | 4.375 | % |   |   | — |   |   |   | 14 |   |
| 88059TBW0                                           | 03/15/2013     | 03/15/2005 |   |   | 4.000 | % |   |   | — |   |   |   | 22 |   |
| 88059TBX8                                           | 03/15/2013     | 03/15/2005 |   |   | 4.250 | % |   |   | — |   |   |   | 12 |   |
| 880591CW0                                           | 03/15/2013     |   |   |   | 6.000 | % |   |   | 1,359 |   |   |   | 1,359 |   |
| 88059TEG2                                           | 04/15/2013     | 07/15/2009 |   |   | 3.500 | % |   |   | — |   |   |   | 3 |   |
| 880591EE8                                           | 05/15/2013     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 05/15/2013     |   |   |   | 2.650 | % |   |   | 2 |   |   |   | — |   |
| 88059TCD1                                           | 06/15/2013     | 06/15/2004 |   |   | 3.500 | % |   |   | — |   |   |   | 12 |   |
| 880591EF5                                           | 06/15/2013     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 88059TCF6                                           | 07/15/2013     | 07/15/2005 |   |   | 4.350 | % |   |   | — |   |   |   | 17 |   |
| 88059TDS7                                           | 07/15/2013     | 07/15/2008 |   |   | 5.625 | % |   |   | — |   |   |   | 9 |   |
| 880591DW9                                           | 08/01/2013     |   |   |   | 4.750 | % |   |   | 940 |   |   |   | 940 |   |
|      Maturing      in 2013 |           |   |   |   |   |   |   |   | 2,308 |   |   |   | 2,388 |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 88059TCL3                                           | 10/15/2013     | 10/15/2005 |   |   | 4.500 | % |   |   | — |   |   |   | 12 |   |
| 880591EE8                                           | 11/15/2013     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 11/15/2013     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 88059TCQ2                                           | 12/15/2013     | 12/15/2005 |   |   | 4.700 | % |   |   | — |   |   |   | 8 |   |
| 880591EF5                                           | 12/15/2013     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 88059TDZ1                                           | 04/15/2014     | 04/15/2008 |   |   | 5.000 | % |   |   | — |   |   |   | 4 |   |
| 880591EE8                                           | 05/15/2014     |   |   |   | 2.250 | % |   |   | 1 |   |   |   | — |   |
| 88059TEL1                                           | 05/15/2014     |   |   |   | 2.650 | % |   |   | 2 |   |   |   | — |   |
| 880591EF5                                           | 06/15/2014     |   |   |   | 3.770 | % |   |   | 25 |   |   |   | — |   |
|      Maturing      in 2014 |           |   |   |   |   |   |   |   | 32 |   |   |   | 24 |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 88059TBJ9                                           | 10/15/2014     | 10/15/2004 |   |   | 4.600 | % |   |   | — |   |   |   | 21 |   |
| 88059TED9                                           | 11/15/2014     | 11/15/2008 |   |   | 4.800 | % |   |   | — |   |   |   | 17 |   |
| 880591EE8                                           | 11/15/2014     |   |   |   | 2.250 | % |   |   | 2 |   |   |   | — |   |
| 88059TEL1                                           | 11/15/2014     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 88059TBN0                                           | 12/15/2014     | 12/15/2004 |   |   | 5.000 | % |   |   | — |   |   |   | 54 |   |
| 880591EF5                                           | 12/15/2014     |   |   |   | 3.770 | % |   |   | 1 |   |   |   | — |   |
| 88059TBY6                                           | 04/15/2015     | 04/15/2005 |   |   | 4.600 | % |   |   | — |   |   |   | 20 |   |
| 88059TDB4                                           | 04/15/2015     | 04/15/2007 |   |   | 5.000 | % |   |   | — |   |   |   | 49 |   |
| 880591EE8                                           | 05/15/2015     |   |   |   | 2.250 | % |   |   | 1 |   |   |   | — |   |
| 88059TEL1                                           | 05/15/2015     |   |   |   | 2.650 | % |   |   | 1 |   |   |   | — |   |
| 880591DY5                                           | 06/15/2015     |   |   |   | 4.375 | % |   |   | 1,000 |   |   |   | 1,000 |   |
| 880591EF5                                           | 06/15/2015     |   |   |   | 3.770 | % |   |   | 26 |   |   |   | — |   |
| 88059TDE8                                           | 07/15/2015     | 07/15/2007 |   |   | 4.500 | % |   |   | — |   |   |   | 6 |   |
| 88059TCH2                                           | 08/15/2015     | 08/15/2005 |   |   | 5.125 | % |   |   | — |   |   |   | 33 |   |
| 88059TBK6                                           | 10/15/2015     | 10/15/2005 |   |   | 5.050 | % |   |   | — |   |   |   | 19 |   |
| 88059TDH1                                           | 15/15/2015     | 10/15/2007 |   |   | 5.000 | % |   |   | — |   |   |   | 27 |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |           |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|  CUSIP      or Other Identifier |  Maturity | Call/(Put)Date |   | Coupon      Rate |   |   | 2009Par      Amount |   |    | 2008Par      Amount |   |
|--------------------------------------|----------------|----------------|--------|------------------|--------|--------|---------------------|--------|---------|---------------------|--------|
| 88059TBL4                            | 11/15/2015     | 11/15/2005     |   |             | 4.800  | %      |                |   | — |                |   |   | 26 |   |
| 880591EE8                            | 11/15/2015     |           |   |             | 2.250  | %      |                |   | 2       |                |   |   | — |   |
| 88059TEL1                            | 11/15/2015     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 88059TCR0                            | 12/15/2015     | 12/15/2005     |   |             | 4.875  | %      |                |   | — |                |   |   | 11 |   |
| 880591EF5                            | 12/15/2015     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TBU4                            | 02/15/2016     | 02/15/2016     |   |             | 4.550  | %      |                |   | — |                |   |   | 8 |   |
| 88059TCV1                            | 02/15/2016     | 02/15/2016     |   |             | 4.500  | %      |                |   | — |                |   |   | 3 |   |
| 88059TEL1                            | 05/15/2016     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 88059TCC3                            | 06/15/2016     | 06/15/2006     |   |             | 3.875  | %      |                |   | — |                |   |   | 3 |   |
| 880591EF5                            | 06/15/2016     |           |   |             | 3.770  | %      |                |   | 26      |                |   |   | — |   |
| 88059TCJ8                            | 09/15/2016     | 09/15/2006     |   |             | 4.950  | %      |                |   | — |                |   |   | 11 |   |
| 88059TDU4                            | 09/15/2016     | 09/15/2007     |   |             | 5.375  | %      |                |   | — |                |   |   | 14 |   |
| 88059TEL1                            | 11/15/2016     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591DS8                            | 12/15/2016     |           |   |             | 4.875  | %      |                |   | 524     |                |   |   | 524 |   |
| 880591EF5                            | 12/15/2016     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88859TCS8                            | 01/15/2017     | 01/15/2007     |   |             | 5.000  | %      |                |   | — |                |   |   | 28 |   |
| 88059TDW8                            | 01/15/2017     | 01/15/2008     |   |             | 5.250  | %      |                |   | — |                |   |   | 6 |   |
| 88059TEL1                            | 05/15/2017     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 88059TEA5                            | 06/15/2017     | 06/15/2008     |   |             | 5.500  | %      |                |   | — |                |   |   | 4 |   |
| 880591EF5                            | 06/15/2017     |           |   |             | 3.770  | %      |                |   | 27      |                |   |   | — |   |
| 880591EA6                            | 07/18/2017     |           |   |             | 5.500  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| 88059TEB3                            | 09/15/2017     | 09/15/2009     |   |             | 5.000  | %      |                |   | — |                |   |   | 4 |   |
| 88059TEL1                            | 11/15/2017     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591CU4                            | 12/15/2017     |           |   |             | 6.250  | %      |                |   | 650     |                |   |   | 650 |   |
| 880591EF5                            | 12/15/2017     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TEF4                            | 03/15/2018     | 03/15/2010     |   |             | 4.500  | %      |                |   | 25      |                |   |   | 25 |   |
| 880591EC2                            | 04/01/2018     |           |   |             | 4.500  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| 88059TCA7                            | 05/15/2018     | 05/15/2004     |   |             | 4.750  | %      |                |   | — |                |   |   | 24 |   |
| 88059TEL1                            | 05/15/2018     |           |   |             | 2.650  | %      |                |   | 2       |                |   |   | — |   |
| 880591EF5                            | 06/15/2018     |           |   |             | 3.770  | %      |                |   | 28      |                |   |   | — |   |
| 88059TCE9                            | 07/15/2018     | 07/15/2004     |   |             | 4.700  | %      |                |   | — |                |   |   | 34 |   |
| 88059TCN9                            | 11/15/2018     | 11/15/2006     |   |             | 5.125  | %      |                |   | — |                |   |   | 18 |   |
| 88059TEL1                            | 11/15/2018     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591EF5                            | 12/15/2018     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TCT6                            | 01/15/2019     | 01/15/2005     |   |             | 5.000  | %      |                |   | — |                |   |   | 27 |   |
| 88059TCX7                            | 03/15/2019     | 01/15/2005     |   |             | 4.500  | %      |                |   | 12      |                |   |   | 12 |   |
| 88059TEL1                            | 05/15/2019     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591EF5                            | 06/15/2019     |           |   |             | 3.770  | %      |                |   | 29      |                |   |   | — |   |
| 88059TEL1                            | 11/15/2019     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591EF5                            | 12/15/2019     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TEL1                            | 05/15/2020     |           |   |             | 2.650  | %      |                |   | 1       |                |   |   | — |   |
| 880591EF5                            | 06/15/2020     |           |   |             | 3.770  | %      |                |   | 27      |                |   |   | — |   |
| 88059TDF5                            | 08/15/2020     | 08/15/2008     |   |             | 5.000  | %      |                |   | — |                |   |   | 10 |   |
| 88059TDG3                            | 09/15/2020     | 09/15/2008     |   |             | 4.800  | %      |                |   | 3       |                |   |   | 3 |   |
| 88059TDJ7                            | 11/15/2020     | 11/15/2008     |   |             | 5.500  | %      |                |   | — |                |   |   | 11 |   |
| 880591EF5                            | 12/15/2020     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TDL2                            | 01/15/2021     | 01/15/2009     |   |             | 5.125  | %      |                |   | — |                |   |   | 5 |   |
| 880591DC3                            | 06/07/2021     |           |   |             | 5.805  | %2     |                |   | 320     |                |   |   | 356 |   |
| 880591EF5                            | 06/15/2021     |           |   |             | 3.770  | %      |                |   | 28      |                |   |   | — |   |
| 880591EF5                            | 12/15/2021     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TDY4                            | 03/15/2022     | 03/15/2008     |   |             | 5.375  | %      |                |   | — |                |   |   | 6 |   |
| 880591EF5                            | 06/15/2022     |           |   |             | 3.770  | %      |                |   | 28      |                |   |   | — |   |
| 88059TEC1                            | 10/15/2011     | 10/15/2022     |   |             | 5.500  | %      |                |   | — |                |   |   | 25 |   |
| 88059TBM2                            | 11/15/2011     | 11/15/2022     |   |             | 5.000  | %      |                |   | — |                |   |   | 10 |   |
| 88059TBP5                            | 12/15/2022     | 12/15/2006     |   |             | 5.000  | %      |                |   | — |                |   |   | 19 |   |
| 880591EF5                            | 12/15/2022     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TBT7                            | 01/15/2023     | 01/15/2007     |   |             | 5.000  | %      |                |   | — |                |   |   | 10 |   |
| 88059TBV2                            | 02/15/2023     | 02/15/2007     |   |             | 5.000  | %      |                |   | — |                |   |   | 16 |   |
| 88059TBZ3                            | 05/15/2023     | 05/15/2004     |   |             | 5.125  | %      |                |   | — |                |   |   | 14 |   |
| 880591EF5                            | 06/15/2023     |           |   |             | 3.770  | %      |                |   | 28      |                |   |   | — |   |
| 88059TEH0                            | 10/15/2023     | 10/15/2011     |   |             | 5.000  | %      |                |   | 15      |                |   |   | — |   |
| 88059TCK5                            | 10/15/2023     | 10/15/2007     |   |             | 5.200  | %      |                |   | — |                |   |   | 13 |   |
| 88059TCP4                            | 11/15/2023     | 11/15/2004     |   |             | 5.250  | %      |                |   | — |                |   |   | 11 |   |
| 880591EF5                            | 12/15/2023     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TCU3                            | 02/15/2024     | 02/15/2008     |   |             | 5.125  | %      |                |   | — |                |   |   | 8 |   |
| 88059TEM9                            | 03/15/2024     | 03/15/2012     |   |             | 4.500  | %      |                |   | 59      |                |   |   | — |   |
| 88059TCY5                            | 04/15/2024     | 04/15/2005     |   |             | 5.375  | %      |                |   | — |                |   |   | 14 |   |
| 880591EF5                            | 06/15/2024     |           |   |             | 3.770  | %      |                |   | 21      |                |   |   | — |   |
| 88059TES6                            | 07/15/2024     | 07/15/2012     |   |             | 4.875  | %      |                |   | 28      |                |   |   | — |   |
| 880591EF5                            | 12/15/2024     |           |   |             | 3.770  | %      |                |   | 1       |                |   |   | — |   |
| 88059TCZ2                            | 02/15/2025     | 02/15/2006     |   |             | 5.000  | %      |                |   | — |                |   |   | 18 |   |
| 88059TDA6                            | 03/15/2025     | 03/15/2009     |   |             | 5.000  | %      |                |   | — |                |   |   | 6 |   |
| 88059TDC2                            | 05/15/2025     | 05/15/2009     |   |             | 5.125  | %      |                |   | 13      |                |   |   | 13 |   |
| 880591EF5                            | 06/15/2025     |           |   |             | 3.770  | %      |                |   | 22      |                |   |   | — |   |
| 880591CJ9                            | 11/01/2025     |           |   |             | 6.750  | %      |                |   | 1,350   |                |   |   | 1,350 |   |

----

Table of Contents

|  CUSIP      or Other Identifier                                                                                                                                                                                                                                                                                                                                                                                              |  Maturity | Call/(Put)Date |   | Coupon      Rate |   |   | 2009Par      Amount |   |    | 2008Par      Amount |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|----------------|--------|------------------|--------|--------|---------------------|--------|---------|---------------------|--------|
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2025     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 88059TDM0                                                                                                                                                                                                                                                                                                                                                                                                                         | 02/15/2026     | 02/15/2010     |   |             | 5.500  | %      |                |   | 6       |                |   |   | 6 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2026     |           |   |             | 3.770  | %      |                |   | 20      |                |   |   | — |   |
| 88059TDV0                                                                                                                                                                                                                                                                                                                                                                                                                         | 10/15/2026     | 10/15/2010     |   |             | 5.500  | %      |                |   | 9       |                |   |   | 9 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2026     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2027     |           |   |             | 3.770  | %      |                |   | 20      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2027     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 88059TEE7                                                                                                                                                                                                                                                                                                                                                                                                                         | 01/15/2028     | 01/15/2012     |   |             | 4.750  | %      |                |   | 36      |                |   |   | 36 |   |
| 8805913003                                                                                                                                                                                                                                                                                                                                                                                                                        | 06/01/2028     |           |   |             | 4.728  | %      |                |   | 330     |                |   |   | 350 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2028     |           |   |             | 3.770  | %      |                |   | 16      |                |   |   | — |   |
| 88059TEJ6                                                                                                                                                                                                                                                                                                                                                                                                                         | 11/15/2008     | 11/15/2012     |   |             | 5.250  | %      |                |   | 7       |                |   |   | — |   |
| 88059TEK3                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2028     | 12/15/2012     |   |             | 5.000  | %      |                |   | 18      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2028     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 88059TEP2                                                                                                                                                                                                                                                                                                                                                                                                                         | 04/15/2029     | 04/15/2013     |   |             | 4.350  | %      |                |   | 51      |                |   |   |   |   |
| 8805914093                                                                                                                                                                                                                                                                                                                                                                                                                        | 05/01/2029     |           |   |             | 4.500  | %      |                |   | 274     |                |   |   | 298 |   |
| 88059TEQ0                                                                                                                                                                                                                                                                                                                                                                                                                         | 05/15/2029     | 05/15/2013     |   |             | 4.500  | %      |                |   | 50      |                |   |   | — |   |
| 88059TER8                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2029     | 06/15/2013     |   |             | 4.750  | %      |                |   | 13      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2029     |           |   |             | 3.770  | %      |                |   | 12      |                |   |   | — |   |
| 88059TET4                                                                                                                                                                                                                                                                                                                                                                                                                         | 07/15/2029     | 07/15/2013     |   |             | 4.750  | %      |                |   | 37      |                |   |   | — |   |
| 88059TEV9                                                                                                                                                                                                                                                                                                                                                                                                                         | 08/15/2029     | 08/15/2013     |   |             | 4.875  | %      |                |   | 19      |                |   |   | — |   |
| 88059TEW7                                                                                                                                                                                                                                                                                                                                                                                                                         | 09/15/2029     | 09/15/2013     |   |             | 4.750  | %      |                |   | 51      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2029     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591DM1                                                                                                                                                                                                                                                                                                                                                                                                                         | 05/01/2030     |           |   |             | 7.125  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2030     |           |   |             | 3.770  | %      |                |   | 12      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2030     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2031     |           |   |             | 3.770  | %      |                |   | 12      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2031     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591DP4                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/07/2032     |           |   |             | 6.587  | %2     |                |   | 399     |                |   |   | 445 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2032     |           |   |             | 3.770  | %      |                |   | 12      |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2032     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2033     |           |   |             | 3.770  | %      |                |   | 5       |                |   |   | — |   |
| 880591DV1                                                                                                                                                                                                                                                                                                                                                                                                                         | 07/15/2033     |           |   |             | 4.700  | %      |                |   | 472     |                |   |   | 472 |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 12/15/2033     |           |   |             | 3.770  | %      |                |   | — |                |   |   | — |   |
| 880591EF5                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2034     |           |   |             | 3.770  | %      |                |   | 5       |                |   |   | — |   |
| 880591DX7                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2035     |           |   |             | 4.650  | %      |                |   | 436     |                |   |   | 436 |   |
| 880591CK6                                                                                                                                                                                                                                                                                                                                                                                                                         | 04/01/2036     |           |   |             | 5.980  | %      |                |   | 121     |                |   |   | 121 |   |
| 880591CS9                                                                                                                                                                                                                                                                                                                                                                                                                         | 04/01/2036     |           |   |             | 5.880  | %      |                |   | 1,500   |                |   |   | 1,500 |   |
| 880591CP5                                                                                                                                                                                                                                                                                                                                                                                                                         | 01/15/2038     |           |   |             | 6.150  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| 880591ED0                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/15/2038     |           |   |             | 5.500  | %      |                |   | 500     |                |   |   | 500 |   |
| 880591EH1                                                                                                                                                                                                                                                                                                                                                                                                                         | 09/15/2039     |           |   |             | 5.250  | %      |                |   | 1,500   |                |   |   | — |   |
| 880591BL5                                                                                                                                                                                                                                                                                                                                                                                                                         | 04/15/2042     | 04/15/2012     |   |             | 8.250  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| 880591DU3                                                                                                                                                                                                                                                                                                                                                                                                                         | 06/07/2043     |           |   |             | 4.962  | %2     |                |   | 240     |                |   |   | 267 |   |
| 880591CF7                                                                                                                                                                                                                                                                                                                                                                                                                         | 07/15/2045     | 07/15/2020     |   |             | 6.235  | %      |                |   | 140     |                |   |   | 140 |   |
| 880591EB4                                                                                                                                                                                                                                                                                                                                                                                                                         | 01/15/2048     |           |   |             | 4.875  | %      |                |   | 500     |                |   |   | 500 |   |
| 880591DZ2                                                                                                                                                                                                                                                                                                                                                                                                                         | 04/01/2056     |           |   |             | 5.375  | %      |                |   | 1,000   |                |   |   | 1,000 |   |
| Maturing      2015-2056                                                                                                                                                                                                                                                                                                                                                                                                           |           |           |   |             |   |   |                |   | 17,141  |                |   |   | 15,676 |   |
| Subtotal                                                                                                                                                                                                                                                                                                                                                                                                                          |           |           |   |             |   |   |                |   | 22,012  |                |   |   | 20,603 |   |
| Unamortized      discounts, premiums, and other                                                                                                                                                                                                                                                                                                                                                                                   |           |           |   |             |   |   |                |   | (224    | )                   |   |   | (199 | ) |
|      Total      long-term debt, net                                                                                                                                                                                                                                                                                                                                                                      |           |           |   |             |   |   |                | $      | 21,788  |                |   | $ | 20,404 |   |
| Notes(1) The      above table includes net exchange losses from currency transactions of $30      million and $138 million at September 30, 2009 and 2008,      respectively.(2) The      coupon rate represents TVA’s effective interest rate.(3) TVA      PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under      certain conditions. See Note 10 — Put and Call      Options. |           |

11.  Seven States Power CorporationObligation

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12.  Risk Management Activities andDerivative Transactions

| Summary      of Derivative Instruments That Receive Hedge Accounting Treatment (part      1) |
|----------------------------------------------------------------------------------------------|
| Derivatives      in Cash Flow Hedging Relationship                                           |   | Objective      of Hedge Transaction |   | Accounting      for Derivative Hedging Instrument |   | Amount      of MtM (Loss) Recognized in Other Comprehensive      Loss (“OCL”) Years EndedSeptember      30 |
|                                                                                         |   |   |   |   |   | 2009 |   | 2008 |
|                                                                                         |   |   |   |   |   |   |   |   |
| Currency      swaps                                                                          |   | To      protect against changes in cash flows caused by changes in foreign      currency exchange rates (exchange rate risk) |   | Cumulative      unrealized gains and losses are recorded in OCL and reclassified to      interest expense to the extent they are offset by cumulative gains and      losses on the hedged transaction |   |  $      (145) |   |  $      (179) |

| Summary      of Derivative Instruments That Receive Hedge Accounting Treatment (part      2)                                                                                  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Derivatives      in Cash FlowHedging      Relationship                                                                                                                        |   | Amount      of Exchange Gain      Reclassified from      OCL      to Interest ExpenseYears      Ended September      30 (a) |   |
|                                                                                                                                                                          |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                          |   |   |   |   |   |   |
| Currency      swaps                                                                                                                                                           |   | $ | 108 |   |   | $ | 161 |   |
| Note(a) There      were no ineffective portions or amounts excluded from effectiveness      testing for any of the periods presented.  Also see Note      13.  |   |

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| Summary      of Derivative Instruments That Do Not Receive Hedge Accounting      Treatment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Derivative      Type                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Objective      of Derivative |   | Accounting      for Derivative Instrument |   | Amount      of Gain(Loss)      Recognized inIncome      on DerivativesYears      EndedSeptember      30 (a) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   | 2009 |   | 2008 |
|  Swaption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |  To      protect against decreases in value of the embedded call (interest rate      risk) |   |  Gains      and losses are recorded as regulatory assets or liabilities until      settlement, at which time the gains/losses (if any) are recognized in      gain/loss on derivative contracts. |   | $   — |   | $   — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|  Interest      rate swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |  To      fix short-term debt variable rate to a fixed rate (interest rate      risk) |   |  Gains      and losses are recorded as regulatory assets or liabilities until      settlement, at which time the gains/losses (if any) are recognized in      gain/loss on derivative contracts.  |   | — |   | — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|  Coal      contracts with volume options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |  To      protect against fluctuations in market prices of purchased coal (price      risk) |   |  Gains      and losses are recorded as regulatory assets or liabilities until      settlement, at which time they are recognized in fuel and purchased power      expense.  Settlement fees associated with early contract      terminations are recognized in fuel and purchased power expense in the      period incurred. |   | 37 |   | — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|  Commodity      derivativesunder      Financial Trading Program                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |  To      protect against fluctuations in market prices of purchased commodities      (price risk) |   |  Realized      gains and losses are recorded in earnings as fuel and purchased power      expense.  Unrealized gains and losses are recorded as a      regulatory asset/liability.  |   | (408) |   | 10 |
|  Note(a)      All of TVA’s derivative instruments that do not receive hedge accounting      treatment have unrealized gains (losses) that would otherwise be      recognized in income but instead are deferred as regulatory assets and      liabilities.  As such, there was no related gain (loss)      recognized in income for these unrealized gains (losses) for 2008 and      2009.  See Note 6 — Deferred Gains and Losses      Relating to TVA’s Financial Trading Program, Swap and Swaption      Contract, and Unrealized Gains (Losses) on      Coal Contacts with Volume Options. |

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| MARK-TO-MARKET      VALUES OF TVA DERIVATIVESAs      of September 30                                                                                                                                                                                                                                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2009 |   | 2008 |
|                                                                                                                                                                                                                                                                                                                                                                                                        |
| Derivatives in Cash Flow Hedging      Relationship:                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | Balance |   | Balance      Sheet Presentation |   | Balance |   | Balance      Sheet Presentation |
| Currency      swaps:                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
|  £200      million Sterling                                                                                                                                                                                                                                                                                                                                                                       |   | $ | (33 | ) | Other      long-term liabilities |   | $ | 2 |   | Other      long-term assets |
|  £250      million Sterling                                                                                                                                                                                                                                                                                                                                                                       |   |   | 7 |   |  Other      long-term assets |   |   | 72 |   |   Other      long-term assets |
|  £150      million Sterling                                                                                                                                                                                                                                                                                                                                                                       |   |   | (18 | ) | Other      long-term liabilities |   |   | 27 |   | Other      long-term assets |
|                                                                                                                                                                                                                                                                                                                                                                                                        |
|     Derivatives Not Receiving Hedge      Accounting Treatment:                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | Balance |   | Balance      Sheet Presentation |   | Balance |   | Balance      Sheet Presentation |
|  Swaption:                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |
|  $1.0      billion notional                                                                                                                                                                                                                                                                                                                                                                            |   | $ | (592 | ) | Other      long-term liabilities |   | $ | (416 | ) | Other      long-term liabilities |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swaps:                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
|  $476      million notional                                                                                                                                                                                                                                                                                                                                                                            |   |   | (276 | ) | Other      long-term liabilities |   |   | (188 | ) | Other      long-term liabilities |
|  $42      million notional                                                                                                                                                                                                                                                                                                                                                                             |   |   | (11 | ) | Other      long-term liabilities |   |   | (7 | ) |   Other      long-term liabilities |
| Coal      contracts with volume options                                                                                                                                                                                                                                                                                                                                                                     |   |   | 7 |   |    Other      long-term assets      $87,      Other long-termliabilities      ($80) |   |   | 813 |   |  Other      long-term assets |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Commodity      derivatives under Financial Trading Program:                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |
|  Margin      cash account*                                                                                                                                                                                                                                                                                                                                                                             |   |   | 28 |   | Inventories      and other, net |   |   | 25 |   | Inventories      and other, net |
| Unrealized      losses, net                                                                                                                                                                                                                                                                                                                                                                                 |   |   | (68 | ) |  Other      regulatory assets ($85), Regulatory      liabilities      $17 |   |   | (146 | ) |  Other      regulatory assets |
| Note* In      accordance with certain credit terms, TVA used leveraging to trade      financial instruments under the Financial Trading Program. Therefore,      the margin cash account balance does not represent 100 percent of the net      market value of the derivative positions outstanding as shown in the      Commodity Derivatives Under Financial Trading Program table      below. |

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| Currency      Swaps OutstandingAs      of September 30, 2009  |
|--------------------------------------------------------------------|
| Effective      Date of Currency Swap Contract                      | Associated      TVA Bond Issues – Currency Exposure | Expiration      Date of Swap | Overall      EffectiveCost      to TVA |
| 2003                                                               | £150      million | 2043 | 4.96% |
| 2001                                                               | £250      million | 2032 | 6.59% |
| 1999                                                               | £200      million | 2021 | 5.81% |

|   | • | In      2003, TVA monetized the call provisions on a $1.0 billion Bond issue by      entering into a swaption agreement with a third party in exchange for $175      million (the “2003A Swaption”). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | In      2003, TVA also monetized the call provisions on a $476 million Bond issue      by entering into a swaption agreement with a third party in exchange for      $81 million (the “2003B Swaption”). |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | In      2005, TVA monetized the call provisions on two electronotes®      issues ($42 million total par value) by entering into swaption agreements      with a third party in exchange for $5 million (the “2005      Swaptions”). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                    | Coal      Contracts with Volume OptionsAs      of September 30  |
|-----------------------------------------|----------------------------------------------------------------------|
|                                    | 2009                                                                 |   | 2008 |
|                                    | Number      ofContracts                                              | Notional      Amount(in      tons) | Fair      Value (MtM) (in      millions) |   | Number      of Contracts | Notional      Amount(in      tons) | Fair      Value (MtM) (in      millions) |
|                                    |                                                                 |   |   |   |   |   |   |
| Coal      Contracts with Volume Options | 7                                                                    | 29      million | $        7 |   | 10 | 37      million | $   813 |

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| Commodity      Derivatives Under Financial Trading ProgramAs      of September 30  |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   | 2009 |   |   | 2008 |   |
|                                                                                    |   | NotionalAmount |   |   | Fair      Value (MtM)(in      millions) |   |   | NotionalAmount |   |   | Fair      Value (MtM)(in      millions) |   |
|                                                                                    |
| Natural      gas (in mmBtu)                                                             |   |   |   |
|                                                                                    |   |   |   |
| Futures      contracts                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      positions                                                                    |   |   | — |   |   | $ | (5 | ) |   |   | — |   |   | $ | — |   |
| Open      positions at end of period                                                    |   |   | 30,020,000 |   |   |   | (25 | ) |   |   | 20,900,000 |   |   |   | (12 | ) |
| Net      position at end of period                                                      |   |   | 30,020,000 |   |   |   | (30 | ) |   |   | 20,900,000 |   |   |   | (12 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Swap      contracts                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      positions                                                                    |   |   | — |   |   |   | (16 | ) |   |   | — |   |   |   | — |   |
| Open      positions at end of period                                                    |   |   | 115,307,500 |   |   |   | (36 | ) |   |   | 70,510,000 |   |   |   | (126 | ) |
| Net      position at end of period                                                      |   |   | 115,307,500 |   |   |   | (52 | ) |   |   | 70,510,000 |   |   |   | (126 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Option      contracts open at end of period                                             |   |   | 7,300,000 |   |   |   | 1 |   |   |   | (1,600,000 | ) |   |   | (8 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      gas financial positions   at      end of period, net        |   |   | 152,627,500 |   |   | $ | (81 | ) |   |   | 89,810,000 |   |   | $ | (146 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel      oil/crude oil (in barrels)                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Futures      contracts open at end of period                                            |   |   | 398,000 |   |   | $ | 3 |   |   |   | — |   |   | $ | — |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Swap      contracts open at end of period                                               |   |   | 1,660,000 |   |   |   | 7 |   |   |   | — |   |   |   | — |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Option      contracts open at end of period                                             |   |   | 1,236,000 |   |   |   | 3 |   |   |   | — |   |   |   | — |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel      oil/crude oil  financial positions at end of period,      net       |   |   | 3,294,000 |   |   | $ | 13 |   |   |   | — |   |   | $ | — |   |

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|   | • | If      TVA remains a majority-owned U.S. government entity but S&P or Moody’s      downgrades TVA’s credit rating to AA+/Aa1, TVA would be required to post      an additional $425 million of collateral in excess of its September 30,      2009 obligation; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | If      TVA ceases to be majority-owned by the U.S. government, its credit rating      would likely change and TVA would be required to post additional      collateral. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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13.  Fair Value Measurements

| Level      1       | —       |   | Unadjusted      quoted prices in active markets accessible by the reporting entity for      identical assets or liabilities.  Active markets are those in      which transactions for the asset or liability occur with sufficient      frequency and volume to provide pricing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level      2  | —  |   | Pricing      inputs other than quoted market prices included in Level 1 that are based      on observable market data and that are directly or indirectly observable      for substantially the full term of the asset or      liability.  These include quoted market prices for similar      assets or liabilities, quoted market prices for identical or similar      assets in markets that are not active, adjusted quoted market prices,      inputs from observable data such as interest rate and yield curves,      volatilities and default rates observable at commonly quoted intervals,      and inputs derived from observable market data by correlation or other      means.                                                                |
| Level      3       | —  |   | Pricing      inputs that are unobservable, or less observable, from objective      sources.  Unobservable inputs are only to be used to the extent      observable inputs are not available.  These inputs maintain the      concept of an exit price from the perspective of a market participant and      should reflect assumptions of other market participants.  An      entity should consider all market participant assumptions that are      available without unreasonable cost and effort.  These are given      the lowest priority and are generally used in internally developed      methodologies to generate management's best estimate of the fair value      when no observable market data is available.  |

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| Fair      Value MeasurementsAs      of September 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Quoted      Prices in Active Markets forIdentical      Assets(Level      1) |   |   | Significant      OtherObservable      Inputs(Level      2) |   |   | SignificantUnobservableInputs(Level      3) |   |   | Netting1 |   |   | Total |   |
| Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $ | 82 |   |   | $ | 1 |   |   | $ | — |   |   | $ | — |   |   | $ | 83 |   |
| Debt      securities-U.S. government corporations and agencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 83 |   |   |   | 28 |   |   |   | — |   |   |   | — |   |   |   | 111 |   |
| Corporate      debt securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | — |   |   |   | 203 |   |   |   | — |   |   |   | — |   |   |   | 203 |   |
| Residential      mortgage-backed securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | — |   |   |   | 18 |   |   |   | — |   |   |   | — |   |   |   | 18 |   |
| Commercial      mortgage-backed securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | — |   |   |   | 2 |   |   |   | — |   |   |   | — |   |   |   | 2 |   |
| Collateralized      debt obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | — |   |   |   | 6 |   |   |   | — |   |   |   | — |   |   |   | 6 |   |
| Commingled      funds2:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      security commingled funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | — |   |   |   | 328 |   |   |   | — |   |   |   | — |   |   |   | 328 |   |
| Debt      security commingled funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | — |   |   |   | 185 |   |   |   | — |   |   |   | — |   |   |   | 185 |   |
| Foreign      currency commingled funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | — |   |   |   | 11 |   |   |   | — |   |   |   | — |   |   |   | 11 |   |
| Other      commingled funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | — |   |   |   | 34 |   |   |   | — |   |   |   | — |   |   |   | 34 |   |
| Currency      swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | — |   |   |   | 7 |   |   |   | — |   |   |   | — |   |   |   | 7 |   |
| Coal      contracts with volume options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | — |   |   |   | — |   |   |   | 87 |   |   |   | — |   |   |   | 87 |   |
| Commodity      derivatives under FTP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 11 |   |   |   | 29 |   |   |   | — |   |   |   | (23 | ) |   |   | 17 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | 176 |   |   | $ | 852 |   |   | $ | 87 |   |   | $ | (23 | ) |   | $ | 1,092 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
| Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Quoted      Prices in Active Markets for Identical Liabilities(Level      1) |   |   | Significant      OtherObservable      Inputs(Level      2) |   |   | SignificantUnobservableInputs(Level      3) |   |   | Netting |   |   | Total |   |
| Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency      swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $ | — |   |   | $ | 51 |   |   | $ | — |   |   | $ | — |   |   | $ | 51 |   |
| Interest      rate swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | — |   |   |   | 287 |   |   |   | — |   |   |   | — |   |   |   | 287 |   |
| Swaption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | — |   |   |   | — |   |   |   | 592 |   |   |   | — |   |   |   | 592 |   |
| Coal      contracts with volume options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | — |   |   |   | — |   |   |   | 80 |   |   |   | — |   |   |   | 80 |   |
| Commodity      derivatives under FTP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 31 |   |   |   | 55 |   |   |   | — |   |   |   | (23 | ) |   |   | 63 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | 31 |   |   | $ | 393 |   |   | $ | 672 |   |   | $ | (23 | ) |   | $ | 1,073 |   |
| Notes(1) Due      to the right of setoff and method of settlement, TVA elects to record      commodity derivatives under the FTP based on its net commodity position      with the counterparty or broker.(2)      Commingled funds represent investment funds comprising multiple individual      financial instrumetns and are classified in the table based on their      existing investment portfolio.  Commingled funds exclusively composed      of one class of security are classified in that category (e.g., equity,      debt, or foreign currency securities).  Commingled funds comprising      multiple classes of securities are classified as "other commingled      funds." |   |

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| Fair      Value Measurements Using Significant Unobservable InputsAs      of September 30                   |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   | Coal      Contracts with Volume Options |   |   | Swaption |   |
|                                                                                                             |   |   |   |   |   |   |
| Balances      at beginning of period                                                                             |   | $ | 813 |   |   | $ | (416 | ) |
| Unrealized      losses deferred as regulatory assets                                                             |   |   | (796 | ) |   |   | (176 | ) |
| Unrealized      losses related to expected net settlement fees included in fuel and      purchased power expense |   |   | (10 | ) |   |   | — |   |
| Balances      at end of period                                                                                   |   | $ | 7 |   |   | $ | (592 | ) |

| Estimated      Values of Financial InstrumentsAs      of September 30  |   |
|-----------------------------------------------------------------------------|--------|
|                                                                        |   | 2009 |   |   | 2008 |   |
|                                                                        |   | Carrying      Amount |   |   | Fair      Value |   |   | Carrying      Amount |   |   | Fair      Value |   |
| Cash      and cash equivalents                                              |   | $ | 201 |   |   | $ | 201 |   |   | $ | 213 |   |   | $ | 213 |   |
| Restricted      cash and investments                                        |   |   | — |   |   |   | — |   |   |   | 106 |   |   |   | 106 |   |
| Loans      and other long-term receivables                                  |   |   | 77 |   |   |   | 68 |   |   |   | 81 |   |   |   | 81 |   |
| Short-term      debt, net                                                   |   |   | 844 |   |   |   | 844 |   |   |   | 185 |   |   |   | 185 |   |
| Long-term      debt (including current portion), net                        |   |   | 21,796 |   |   |   | 23,757 |   |   |   | 22,434 |   |   |   | 23,851 |   |

14.  Proprietary Capital

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| Appropriations      ActivityAs      of September 30  |   |
|-----------------------------------------------------------|--------|
|                                                      |   | Power      Facility Appropriation      Investment |   |   | Stewardship      Program Appropriations |   |   | Total      Appropriation Investment |   |
| Appropriation      Investment at September 30, 2007       |   | $ | 388 |   |   | $ | 4,355 |   |   | $ | 4,743 |   |
| Less      repayments to the U.S. Treasury                 |   |   | (20 | ) |   |   | — |   |   |   | (20 | ) |
| Appropriation      Investment at September 30, 2008       |   |   | 368 |   |   |   | 4,355 |   |   |   | 4,723 |   |
| Less      repayments to the U.S. Treasury                 |   |   | (20 | ) |   |   | — |   |   |   | (20 | ) |
| Appropriation      Investment at September 30, 2009       |   | $ | 348 |   |   | $ | 4,355 |   |   | $ | 4,703 |   |

| Total      Other Comprehensive Loss ActivityFor      the years ended September 30                                                      |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Accumulated      other comprehensive income, September 30, 2006                                                                             |   | $ | 43 |   |
|                                                                                                                                        |   |   |   |   |
| Changes      in fair value:                                                                                                                 |   |   |   |   |
|     Inflation      swap                                                                                                 |   |   | 9 |   |
|     Foreign      currency swaps                                                                                         |   |   | (71 | ) |
| Accumulated      other comprehensive loss, September 30, 2007                                                                               |   |   | (19 | ) |
|                                                                                                                                        |   |   |   |   |
| Changes      in fair value:                                                                                                                 |   |   |   |   |
|     Inflation      swap                                                                                                 |   |   | — |   |
|     Foreign      currency swaps                                                                                         |   |   | (18 | ) |
| Accumulated      other comprehensive loss, September 30, 2008                                                                               |   |   | (37 | ) |
|                                                                                                                                        |   |   |   |   |
| Changes      in fair value:                                                                                                                 |   |   |   |   |
|    Foreign      currency swaps                                                                                               |   |   | (38 | ) |
|                                                                                                                                        |   |   |   |   |
| Accumulated      other comprehensive loss, September 30, 2009                                                                               |   | $ | (75 | ) |
| NoteForeign      currency swap changes are shown net of reclassifications from Other comprehensive       income to      earnings. |   |

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15.  Other Income, Net

| Other      Income, NetFor      the years ended September 30  |   |
|-------------------------------------------------------------------|--------|
|                                                              |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                              |   |   |   |   |   |   |   |   |   |
| Interest      income                                              |   | $ | 9 |   |   | $ | 13 |   |   | $ | 23 |   |
| (Losses)      gains on investments                                |   |   | (9 | ) |   |   | (27 | ) |   |   | 7 |   |
| External      services, net                                       |   |   | 14 |   |   |   | 14 |   |   |   | 22 |   |
| Claims      settlement                                            |   |   | 4 |   |   |   | 8 |   |   |   | — |   |
| Miscellaneous                                                     |   |   | 7 |   |   |   | 1 |   |   |   | 19 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      other income, net                                      |   | $ | 25 |   |   | $ | 9 |   |   | $ | 71 |   |

16.  Supplemental Cash FlowInformation

17.  Variable Interest Entities

18.  Benefit Plans

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| •   | Original Benefit      Structure.  The pension benefit for a member      participating in the Original Benefit Structure is based on the member’s      creditable service, the member’s average monthly salary for the highest      three consecutive years of base pay, and a pension factor based on the      member’s age and years of service, less a Social Security      offset. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Cash Balance Benefit      Structure.  The pension benefit for a member      participating in the Cash Balance Benefit Structure is based on credits      accumulated in the member’s account and the member’s age.  A      member’s account receives credits each pay period equal to 6.00 percent of      his or her straight-time earnings.  The account also receives      monthly interest credits at a rate set at the beginning of each year equal      to the change in the Consumer Price Index (“CPI”) for the period ending on      the previous October 31 plus 3.00 percent, with the provision that the      rate may not be less than 6.00 percent or more than 10.00      percent.  The actual changes in the CPI for the years ended      October 31, 2008 and 2007 were 4.45 percent and 2.53 percent, which      resulted in interest rates of 7.45 percent and 6.00 percent for CY 2009      and 2008, respectively. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Obligations      and Funded StatusAs      of September 30  |   |
|-----------------------------------------------------------------|--------|
|                                                            |   | Pension      Benefits |   |   | Other      Post-retirement Benefits |   |
|                                                            |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Change      in benefit obligation                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit      obligation at beginning of year                    |   | $ | 8,080 |   |   | $ | 8,642 |   |   | $ | 498 |   |   | $ | 464 |   |
| Service      cost                                               |   |   | 84 |   |   |   | 110 |   |   |   | 7 |   |   |   | 5 |   |
| Interest      cost                                              |   |   | 582 |   |   |   | 522 |   |   |   | 36 |   |   |   | 28 |   |
| Plan      participants’ contributions                     |   |   | 32 |   |   |   | 34 |   |   |   | 81 |   |   |   | 78 |   |
| Amendments                                                      |   |   | (482 | ) |   |   | 3 |   |   |   | 7 |   |   |   | — |   |
| Actuarial      (gain)                                           |   |   | 1,552 |   |   |   | (708 | ) |   |   | 146 |   |   |   | 25 |   |
| Net      transfers from variable fund/401(k) plan               |   |   | (3 | ) |   |   | 7 |   |   |   | — |   |   |   | — |   |
| Expenses      paid                                              |   |   | (6 | ) |   |   | (5 | ) |   |   | — |   |   |   | — |   |
| Benefits      paid                                              |   |   | (573 | ) |   |   | (525 | ) |   |   | (110 | ) |   |   | (102 | ) |
| Benefit      obligation at end of year                          |   |   | 9,266 |   |   |   | 8,080 |   |   |   | 665 |   |   |   | 498 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in plan assets                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at beginning of year             |   |   | 6,188 |   |   |   | 7,977 |   |   |   | — |   |   |   | — |   |
| Actual      return on plan assets                               |   |   | — |   |   |   | (1,465 | ) |   |   | — |   |   |   | — |   |
| Plan      participants’ contributions                     |   |   | 32 |   |   |   | 34 |   |   |   | 81 |   |   |   | 78 |   |
| Net      transfers from variable fund/401(k) plan               |   |   | (3 | ) |   |   | 7 |   |   |   | — |   |   |   | — |   |
| Employer      contributions                                     |   |   | 1,005 |   |   |   | 165 |   |   |   | 29 |   |   |   | 24 |   |
| Expenses      paid                                              |   |   | (6 | ) |   |   | (5 | ) |   |   | — |   |   |   | — |   |
| Benefits      paid                                              |   |   | (573 | ) |   |   | (525 | ) |   |   | (110 | ) |   |   | (102 | ) |
| Fair      value of plan assets at end of year                   |   |   | 6,643 |   |   |   | 6,188 |   |   |   | — |   |   |   | — |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Funded      status                                              |   | $ | (2,623 | ) |   | $ | (1,892 | ) |   | $ | (665 | ) |   | $ | (498 | ) |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|   | • | For      CY 2010, the COLA will be zero. |
|--------|---------|------------------------------------------|

|   | • | For      CY 2011, the COLA will be the change in the CPI, capped at 3      percent. |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | For      CY 2012, the COLA will be zero. |
|--------|---------|------------------------------------------|

|   | • | For      CY 2013, the COLA will be the change in the CPI, capped at 2.5      percent. |
|--------|---------|---------------------------------------------------------------------------------------|

| Obligations      and Funded StatusRecognized      AmountsAs      of September 30  |   |
|----------------------------------------------------------------------------------------|--------|
|                                                                                   |   | Pension      Benefits |   |   | Other      Post-retirement Benefits |   |
|                                                                                   |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulatory      assets                                                                 |   | $ | 3,764 |   |   | $ | 2,120 |   |   | $ | 298 |   |   | $ | 157 |   |
| Accrued      liabilities                                                               |   |   | (5 | ) |   |   | (5 | ) |   |   | (35 | ) |   |   | (29 | ) |
| Other      long-term liabilities                                                       |   |   | (2,618 | ) |   |   | (1,887 | ) |   |   | (630 | ) |   |   | (469 | ) |

| Obligations      and Funded StatusUnrecognized      AmountsAs      of September 30  |   |
|------------------------------------------------------------------------------------------|--------|
|                                                                                     |   | Pension      Benefits |   |   | Other      Post-retirement Benefits |   |
|                                                                                     |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrecognized      prior service cost (credit)                                            |   | $ | (305 | ) |   | $ | 214 |   |   | $ | 31 |   |   | $ | 29 |   |
| Unrecognized      net loss                                                               |   |   | 3,987 |   |   |   | 1,906 |   |   |   | 267 |   |   |   | 128 |   |
| Amount      deferred due to actions of regulator                                         |   |   | 82 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      regulatory assets                                                             |   | $ | 3,764 |   |   | $ | 2,120 |   |   | $ | 298 |   |   | $ | 157 |   |

| Projected      Benefit Obligations in Excess of Plan AssetsAs      of September 30  |   |
|------------------------------------------------------------------------------------------|--------|
|                                                                                     |   | 2009 |   |   | 2008 |   |
| Projected      benefit obligation                                                        |   | $ | 9,266 |   |   | $ | 8,080 |   |
| Accumulated      benefit obligation                                                      |   |   | 9,032 |   |   |   | 7,870 |   |
| Fair      value of plan assets                                                           |   |   | 6,643 |   |   |   | 6,188 |   |

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| Components      of Net Periodic Benefit CostFor      the years ended September 30  |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   | Pension      Benefits |   |   | Other      Post-retirement Benefits |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Components      of net periodic benefit cost                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                                                                       |   | $ | 84 |   |   | $ | 110 |   |   | $ | 122 |   |   | $ | 7 |   |   | $ | 5 |   |   | $ | 5 |   |
| Interest      cost                                                                      |   |   | 581 |   |   |   | 522 |   |   |   | 493 |   |   |   | 36 |   |   |   | 28 |   |   |   | 26 |   |
| Expected      return on plan assets                                                     |   |   | (543 | ) |   |   | (608 | ) |   |   | (571 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Amortization      of prior service cost                                                 |   |   | 37 |   |   |   | 37 |   |   |   | 37 |   |   |   | 5 |   |   |   | 5 |   |   |   | 5 |   |
| Recognized      net actuarial loss                                                      |   |   | 14 |   |   |   | 41 |   |   |   | 83 |   |   |   | 7 |   |   |   | 5 |   |   |   | 6 |   |
| Net      periodic benefit cost as actuarially determined                                |   |   | 173 |   |   |   | 102 |   |   |   | 164 |   |   |   | 55 |   |   |   | 43 |   |   |   | 42 |   |
| Amount      capitalized due to actions of regulator                                     |   |   | (82 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total      net periodic benefit cost                                                    |   | $ | 91 |   |   | $ | 102 |   |   | $ | 164 |   |   | $ | 55 |   |   | $ | 43 |   |   | $ | 42 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Expected      Amortization of Regulatory Assets in 2010As      of September 30, 2009  |   |
|--------------------------------------------------------------------------------------------|--------|
|                                                                                       |   | Pension      Benefits |   |   | Other      Post-retirementBenefits |   |   | Total |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |
| Prior      service cost (credit)                                                           |   | $ | (23 | ) |   | $ | 6 |   |   | $ | (17 | ) |
| Net      actuarial loss                                                                    |   |   | 203 |   |   |   | 17 |   |   |   | 220 |   |
| Deferred      amounts                                                                      |   |   | 28 |   |   |   | — |   |   |   | 28 |   |

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| Actuarial      AssumptionsAs      of September 30                             |   |
|------------------------------------------------------------------------------------|--------|
|                                                                               |   | Pension      Benefits |   |   | Other      Post-retirement Benefits |   |
|                                                                               |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Assumptions      utilized to determine benefit obligations at September 30         |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                                                 |   |   | 5.75 | % |   |   | 7.50 | % |   |   | 5.75 | % |   |   | 7.50 | % |
| Expected      return on plan assets                                                |   |   | 7.75 | % |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| Rate      of compensation increase                                                 |   |   | 4.40 | % |   |   | 4.33 | % |   |   | N/A |   |   |   | N/A |   |
| Initial      health care cost trend rate                                           |   |   | N/A |   |   |   | N/A |   |   |   | 8.00 | % |   |   | 8.00 | % |
| Ultimate      health care cost trend rate                                          |   |   | N/A |   |   |   | N/A |   |   |   | 5.00 | % |   |   | 5.00 | % |
| Ultimate      trend rate is reached in year beginning                              |   |   | N/A |   |   |   | N/A |   |   |   | 2015 |   |   |   | 2014 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assumptions      utilized to determine expense for the years ended September    30 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                                                 |   |   | 7.50 | % |   |   | 6.25 | % |   |   | 7.5 | % |   |   | 6.25 | % |
| Expected      return on plan assets                                                |   |   | 8.00 | % |   |   | 8.75 | % |   |   | N/A |   |   |   | N/A |   |
| Rate      of compensation increase                                                 |   |   | 4.33 | % |   |   | 4.30 | % |   |   | N/A |   |   |   | N/A |   |
| Initial      health care cost trend rate                                           |   |   | N/A |   |   |   | N/A |   |   |   | 8.00 | % |   |   | 8.00 | % |
| Ultimate      health care cost trend rate                                          |   |   | N/A |   |   |   | N/A |   |   |   | 5.00 | % |   |   | 5.00 | % |
| Ultimate      trend rate is reached in year beginning                              |   |   | N/A |   |   |   | N/A |   |   |   | 2014 |   |   |   | 2013 |   |

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| Sensitivity      of Costs to Changes in Pension Benefit Assumptions  |   |
|---------------------------------------------------------------------------|--------|
|   Actuarial      Assumption                                     |   | Change      in Assumption |   |   | Impact      on 2010 Pension      Cost |   |   | Impact      on 2009 Projected Benefit Obligation |   |
|                                                                      |   | (Increase      in millions) |   |
| Discount      rate                                                        |   |   | (0.25 | %) |   | $ | 14 |   |   | $ | 243 |   |
| Rate      of return on plan assets                                        |   |   | (0.25 | %) |   |   | 17 |   |   | NA |   |

| Sensitivity      to Components of Other Post-retirement      Benefits PlanAs      of September 30, 2009  |   |
|---------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                          |   | 1%      Increase |   |   | 1%      Decrease |   |
| Effect      on total of service and interest cost components                                                  |   | $ | 5 |   |   | $ | (6 | ) |
| Effect      on end-of-year accumulated post-retirement benefit    obligation                                  |   |   | 66 |   |   |   | (74 | ) |

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| Asset      Holdings of TVARSAs      of September 30        |   |
|-----------------------------------------------------------------|--------|
|                                                            |   | Plan      Assets at September 30 |   |
|                                                            |   | 2009 |   |   | 2008 |   |
| Asset      Category                                             |   |   |   |   |   |   |
| U.S.      equity securities                                     |   |   | 23 | % |   |   | 32 | % |
| Non-U.S.      equity securities                                 |   |   | 20 | % |   |   | 21 | % |
| Private      equity holdings or similar alternative investments |   |   | 6 | % |   |   | 6 | % |
| Private      real estate holdings                               |   |   | 1 | % |   |   | 2 | % |
| Fixed      income securities                                    |   |   | 27 | % |   |   | 32 | % |
| High      yield securities                                      |   |   | 7 | % |   |   | 7 | % |
| Cash      and equivalents                                       |   |   | 16 | % |   |   | 0 | % |
| Total                                                           |   |   | 100 | % |   |   | 100 | % |
|                                                            |   |   |   |   |   |   |   |   |

| Estimated      Future Benefits PaymentsAs      of September 30, 2009  |   |
|----------------------------------------------------------------------------|--------|
|                                                                       |   | PensionBenefits |   |   | Other      Post-retirement Benefits |   |
| 2010                                                                       |   | $ | 694 |   |   | $ | 37 |   |
| 2011                                                                       |   |   | 683 |   |   |   | 41 |   |
| 2012                                                                       |   |   | 678 |   |   |   | 45 |   |
| 2013                                                                       |   |   | 678 |   |   |   | 46 |   |
| 2014                                                                       |   |   | 678 |   |   |   | 48 |   |
| 2015      - 2019                                                           |   |   | 3,394 |   |   |   | 245 |   |

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19.  Asset Acquisitions andDispositions

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20.  Commitments andContingencies

| Commitments      and ContingenciesPayments      due in the year ending September 30                                                                   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                       |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | Thereafter |   |   | Total |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                                                                                                                                                       |   | $ | 852 |   |   | $ | 1,008 |   |   | $ | 1,523 |   |   | $ | 2,308 |   |   | $ | 32 |   |   | $ | 17,111 |   |   | $ | 22,834 | 1 |
| Lease      obligations                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Capital                                                                                                                                  |   |   | 488 |   |   |   | 54 |   |   |   | 6 |   |   |   | — |   |   |   | — |   |   |   | 3 |   |   |   | 551 |   |
|    Non-cancelable      operating                                                                                                            |   |   | 52 |   |   |   | 43 |   |   |   | 37 |   |   |   | 31 |   |   |   | 28 |   |   |   | 195 |   |   |   | 386 |   |
| Purchase      obligations                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Power                                                                                                                                    |   |   | 274 |   |   |   | 272 |   |   |   | 258 |   |   |   | 203 |   |   |   | 198 |   |   |   | 6,200 |   |   |   | 7,405 |   |
|    Fuel                                                                                                                                     |   |   | 2,209 |   |   |   | 1,592 |   |   |   | 1,160 |   |   |   | 938 |   |   |   | 832 |   |   |   | 1,836 |   |   |   | 8,567 |   |
|    Other                                                                                                                                    |   |   | 50 |   |   |   | 48 |   |   |   | 37 |   |   |   | 30 |   |   |   | 27 |   |   |   | 156 |   |   |   | 348 |   |
| Payments      on other financings                                                                                                                          |   |   | 89 |   |   |   | 94 |   |   |   | 98 |   |   |   | 99 |   |   |   | 100 |   |   |   | 818 |   |   |   | 1,298 |   |
| Total                                                                                                                                                      |   | $ | 4,014 |   |   | $ | 3,111 |   |   | $ | 3,119 |   |   | $ | 3,609 |   |   | $ | 1,217 |   |   | $ | 26,319 |   |   | $ | 41,389 |   |
| Note(1) Does      not include noncash items of foreign currency valuation loss of $30      million and net discount on sale of Bonds of $224 million. |   |

| Energy      Prepayment ObligationsPayments      Due in the Year Ending September 30  |   |
|-------------------------------------------------------------------------------------------|--------|
|                                                                                      |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | Thereafter |   |   | Total |   |
| Energy      prepayment obligations                                                        |   | $ | 105 |   |   | $ | 105 |   |   | $ | 105 |   |   | $ | 102 |   |   | $ | 100 |   |   | $ | 410 |   |   | $ | 927 |   |

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|   | • | Mays v. TVA (proposed      class action), filed January 2, 2009.  The Mays plaintiff filed      suit on behalf of himself and others similarly situated.  The      plaintiff seeks to represent a class of persons claimed to be riparian      owners downstream from Kingston on the Clinch River and Emory River      portions of Watts Bar Reservoir.  The complaint asserts private      nuisance and seeks compensatorydamages. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Blanchard v. TVA      (proposed class action), filed January 9, 2009.  The Blanchard plaintiffs      are eight individuals who filed suit on behalf of themselves and others      similarly situated.  The plaintiffs seek to represent a class of      persons who own property or reside in a defined area near      Kingston.  The plaintiffs allege a cause of action based on      inverse condemnation and various causes of action based in tort and seek      compensatory and punitive damages and injunctive relief relating to spill      remediation, including an order directing TVA to fund medical      monitoring. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Giltnane v. TVA      (proposed class action), filed January 9, 2009.  The Giltnane plaintiffs are      six individuals and a business who filed suit on behalf of themselves and      others similarly situated.  The plaintiffs seek to represent a      class of persons who own property, reside, or conduct business within a      25-mile radius of Kingston.  The plaintiffs allege      various causes of action based in tort and seek compensatory and punitive      damages and injunctive relief relating to spill remediation, including an      order directing TVA to fund medical  monitoring. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | Raymond v. TVA, filed      December 30, 2008.  The Raymond plaintiffs are      26 owners of property in the area of Kingston.  The plaintiffs      filed suit alleging a cause of action based on inverse condemnation and      various causes of action based in tort and seek compensatory and punitive      damages and injunctive relief relating to spill    remediation. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Auchard v. TVA, filed      February 18, 2009.  The Auchard plaintiffs are      277 adults and minors who allegedly own property and/or reside in the      vicinity of the Kingston ash spill.  The plaintiffs allege      various causes of action based in tort and seek compensatory damages and      injunctive relief relating to spill remediation, including an order      directing TVA to fund medicalmonitoring. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Scofield v. TVA, filed      February 20, 2009.  The Scofield plaintiffs are      18 individuals and a farm business.  The plaintiffs assert a      cause of action based on inverse condemnation and various causes of action      based in tort and seek compensatory and punitive damages and injunctive      relief relating to spillremediation. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Long v. TVA (proposed      class action), filed March 17, 2009.  The Long plaintiffs are 43      individuals who own property and/or reside in the vicinity of Kingston or      do business in the area.  The plaintiffs seek to represent a      class of all similarly situated persons within a 10-mile radius of      Kingston who have been injured in some way by the ash spill.  As      to TVA, the plaintiffs assert various causes of action based in tort law      and also assert NEPA claims under the Administrative Procedure      Act.  Plaintiffs seek compensatory and punitive damages and      injunctive relief relating to spill remediation, including an order      directing TVA to fund medical monitoring.  The plaintiffs also      named four TVA employees as defendants, alleging both state law torts and      constitutional tort claims. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Dickson v. TVA, filed      August 18, 2009.  The Dickson plaintiffs are      an individual and a corporation involved in a planned waterfront      residential development on Watts Bar Lake in Rhea County,      Tennessee.  The plaintiffs allege a private nuisance based on      the ash spill and are seeking damages of $17  million. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      response to the lawsuits, TVA has filed the following pending      motions: |
|--------|-------------------------------------------------------------------------------------|

|   | • | To      dismiss all the tort claims on federal discretionary function      grounds. |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | To      dismiss all the inverse condemnation claims on the ground that the factual      allegations are insufficient to state an inverse condemnation      claim. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | To      dismiss all the punitive damages claims on the ground that such damages      may not be recovered against TVA, a federal executive branch agency,      because Congress has not expressly authorized such damages against      TVA. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | To      dismiss all the jury demands against TVA because Congress has not provided      a right to a jury trial against TVA in actions such as    these. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | To      dismiss the NEPA claims in the Long case on the ground      that the court is without jurisdiction to review TVA’s ongoing spill      response activities because those activities are being conducted under      CERCLA. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | To      dismiss the individual TVA employee defendants in the Long case because the      state law claims are precluded by the Federal Employees Liability Reform      and Tort Compensation Act of 1988, and the constitutional allegations are      insufficient. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | See      Note 23 for a description of the other lawsuits. |
|--------|-----------------------------------------------------------|

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|   | • | The      flue gas scrubbers and SCRs currently operating at Bull Run be properly      maintained and operated year round. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | • | The      scrubbers under construction at Kingston be completed by December 31,      2010, and that Kingston’s scrubbers and SCRs be properly maintained and      operated year-round. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Scrubbers      and SCRs be installed and in operation for all four units at John Sevier      by December 31, 2011. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

|   | • | TVA      complete its plan to modernize the two existing scrubbers at Widows Creek,      and install scrubbers and SCRs at Widows Creek Units 1-6 by December 31,      2013. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      plants meet specified emission rates and annual tonnage caps for NOx and      SO2      after the applicable operation dates for the  scrubbers. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | TVA’s      Chief Executive Officer (“CEO”) make semi-annual reports to the court of      TVA’s progress in complying with theorder. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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21.  Related Parties

|                                                                           |   | Related      Party TransactionsFor      the years ended, or as of September 30  |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                           |   | 2009                                                                                 |   |   | 2008 |   |   | 2007 |   |
| Sales      of electricity services                                             |   | $                                                                                    | 260    |   |   | $ | 229 |   |   | $ | 235 |   |
| Other      revenues                                                            |   |                                                                                 | 1      |   |   |   | — |   |   |   | — |   |
| Other      expenses                                                            |   |                                                                                 | 250    |   |   |   | 231 |   |   |   | 237 |   |
| Receivables      at September 30                                               |   |                                                                                 | 19     |   |   |   | 19 |   |   |   | 19 |   |
| Investments                                                                    |   |                                                                                 | 25     |   |   |   | — |   |   |   | — |   |
| Payables      at September 30                                                  |   |                                                                                 | 133    |   |   |   | 60 |   |   |   | 126 |   |
| Return      on Power Facility Appropriation Investment                         |   |                                                                                 | 13     |   |   |   | 20 |   |   |   | 20 |   |
| Repayment      of Power Facility Appropriation       Investment |   |                                                                                 | 20     |   |   |   | 20 |   |   |   | 20 |   |

22.  Unaudited Quarterly FinancialInformation

----

|                    |   | Unaudited      Quarterly Financial Information  |   |
|-------------------------|--------|------------------------------------------------------|--------|
|                    |   | 2009                                                 |   |
|                    |   | First                                                |   |   | Second |   |   | Third |   |   | Fourth |   |   | Total |   |
| Operating      revenues |   | $                                                    | 3,077  |   |   | $ | 2,933 |   |   | $ | 2,566 |   |   | $ | 2,679 |   |   | $ | 11,255 |   |
| Operating      expenses |   |                                                 | 3,042  |   |   |   | 2,503 |   |   |   | 2,425 |   |   |   | 1,312 |   |   |   | 9,282 |   |
| Operating      income   |   |                                                 | 35     |   |   |   | 430 |   |   |   | 141 |   |   |   | 1,367 |   |   |   | 1,973 |   |
| Net      income         |   |                                                 | (305   | ) |   |   | 133 |   |   |   | (167 | ) |   |   | 1,065 |   |   |   | 726 |   |

|                    |   | 2008   |   |
|-------------------------|--------|--------|--------|
|                    |   | First  |   |   | Second |   |   | Third |   |   | Fourth |   |   | Total |   |
| Operating      revenues |   | $      | 2,360  |   |   | $ | 2,518 |   |   | $ | 2,552 |   |   | $ | 2,952 |   |   | $ | 10,382 |   |
| Operating      expenses |   |   | 2,012  |   |   |   | 2,041 |   |   |   | 2,111 |   |   |   | 2,034 |   |   |   | 8,198 |   |
| Operating      income   |   |   | 348    |   |   |   | 477 |   |   |   | 441 |   |   |   | 918 |   |   |   | 2,184 |   |
| Net      income         |   |   | 8      |   |   |   | 135 |   |   |   | 100 |   |   |   | 574 |   |   |   | 817 |   |

23.  Subsequent Events

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REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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|   | December      10, 2007, except with respect to the matter disclosed in Note 2 of the      Tennessee Valley Authority Form 10-K/A Amendment No. 2 as to which the      date is November 21, 2008 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A.  CONTROLS ANDPROCEDURES

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ITEM 9B.  OTHERINFORMATION

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  PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS ANDCORPORATE GOVERNANCE

Directors

| Directors                                                                                                                                                                  | Age | Year      Appointed | Year      Term Expires |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----|---------------------|------------------------|
| Robert      M. Duncan, Chairman                                                                                                                                            | 58  | 2006                | 2011                   |
| William      B. Sansom                                                                                                                                                     | 68  | 2006                | 2009*                  |
| Thomas      C. Gilliland                                                                                                                                                   | 61  | 2008                | 2011                   |
| Howard      A. Thrailkill                                                                                                                                                  | 70  | 2006                | 2010                   |
| Dennis      C. Bottorff                                                                                                                                                    | 65  | 2006                | 2011                   |
| Bishop      William Graves                                                                                                                                                 | 73  | 2008                | 2012                   |
| Note*  Although      the term of Director Sansom expired in May 2009, he is entitled to remain      in office until the end of the current session of  Congress. |

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Executive Officers

| Executive      Officers       | Title                                                                                        | Age | Employment      Commenced |
|-------------------------------|----------------------------------------------------------------------------------------------|-----|---------------------------|
| Tom      D. Kilgore           | President      and Chief Executive Officer                                                   | 61  | 2005                      |
| Kimberly      S. Greene       | Chief      Financial Officer and Executive Vice President, Financial      Services           | 43  | 2007                      |
| William      R. McCollum, Jr. | Chief      Operating Officer                                                                 | 58  | 2007                      |
| Maureen      H. Dunn          | Executive      Vice President and General Counsel                                            | 60  | 1978                      |
| Preston      D. Swafford      | Chief      Nuclear Officer and Executive Vice President, TVA Nuclear                         | 49  | 2006                      |
| John      E. Long, Jr.        | Chief      Administrative Officer and Executive Vice President, Administrative      Services | 57  | 1980                      |
| Kenneth      R. Breeden       | Executive      Vice President, Customer Resources                                            | 61  | 2004                      |
| Robin      E. Manning         | Executive      Vice President, Power System Operations                                       | 53  | 2008                      |
| Van      M. Wardlaw           | Executive      Vice President, Power Supply and Fuels                                        | 49  | 1982                      |
| Ashok      S. Bhatnagar       | Senior      Vice President, Nuclear Generation Development and      Construction             | 53  | 1999                      |
| William      R. Campbell      | Senior      Vice President, Fleet Engineering                                                | 58  | 2007                      |
| Robert      M. Deacy, Sr.     | Senior      Vice President, Clean Strategies and Project Development                         | 57  | 2007                      |
| Peyton      T. Hairston, Jr.  | Senior      Vice President, Corporate Responsibility andDiversity                       | 54  | 1993                      |
| Janet      C. Herrin          | Senior      Vice President, River Operations                                                 | 55  | 1978                      |
| John      M. Hoskins          | Senior      Vice President and Treasurer                                                     | 54  | 1978                      |
| Donald      E. Jernigan       | Senior      Vice President, Nuclear Operations                                               | 53  | 2008                      |
| Anda      A. Ray              | Senior      Vice President, Office of Environment and Research                               | 53  | 1983                      |
| Emily      J. Reynolds        | Senior      Vice President, Government and Valley Relations                                  | 53  | 2007                      |
| David      R. Mould           | Senior      Vice President, Communications                                                   | 52  | 2009                      |
| John      J. McCormick, Jr.   | Senior      Vice President, Fossil Operations                                                | 47  | 2007                      |
| John      M. Thomas, III      | Senior      Vice President, Corporate Governance and Compliance                              | 46  | 2005                      |
| Steve      Byone              | Vice      President and Controller                                                           | 50  | 2009                      |

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Disclosure and Financial Code ofEthics

Committees of the TVA Board

|   | • | Finance,      Strategy, Rates, and AdministrationCommittee |
|--------|---------|------------------------------------------------------------|

|   | • | Operations,      Environment and Safety Committee |
|--------|---------|---------------------------------------------------|

|   | • | Community      Relations and Energy EfficiencyCommittee |
|--------|---------|---------------------------------------------------------|

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ITEM 11.  EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

|   | • | Provide a competitive level of      compensation that enables TVA to attract, retain, and motivate highly      competent employees.  Total target compensation for each      position in TVA is determined by market pricing based on a level needed to      attract, retain, and motivate employees critical to TVA’s success in      achieving its mission.  Accordingly, total compensation levels      are targeted at the median (50th      percentile) of the relevant labor market for most      positions.  However, for positions affected by market scarcity,      recruitment and retention issues, and other business reasons, total      compensation levels are targeted above the median (typically between the      50th      and 75th      percentile). |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Encourage and reward      executives for their performance and contributions to the successful      achievement of financial and operational goals.  A key      component of the Compensation Plan is “pay for performance,” which rewards      executives for improvement in TVA’s overall performance, as well as that      of individual business units and individual employees.  The TVA      Board believes that the portion of total direct compensation placed      at-risk should increase as an employee’s position and level of      responsibility within TVA increases.  Accordingly, a significant      percentage of      total target direct compensation for the Named Executive Officers (40      percent to 65 percent) is performance-based  compensation. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Provide executives with the      focus to achieve short-term and long-term business goals that are      important to TVA, TVA’s customers, and the people TVA      serves.  TVA seeks to hire and retain executives who are      focused on both the short-term and long-term success of      TVA.  The Compensation Plan is designed to achieve this goal by      providing a mix of salary and at-risk annual and long-term incentive      compensation. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Improve overall company      performance through productivity enhancement.  An      executive cannot help meet TVA’s goals and improve performance without the      work of others.  For this reason, the performance goals set at      the TVA level and business unit level are the same for both executives and      all non-executive employees.  This generally translates into all      TVA employees receiving compensation in a manner that aligns their work      with the same goals and encourages and rewards them for the successful      achievement of TVA’s goals. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Compensation      Program Components for Named Executive Officers  |
|-------------------------------------------------------------------------|
| Compensation      Component                                             |   | Objective |   | Key      Features |
| Annual      Salary                                                      |   | Fixed      and paid biweekly to executives |   | Total      direct compensation (salary plus annual and long-term incentive      compensation plus long-term deferred compensation) is targeted at the      median (50th      percentile) for similar positions at other companies in TVA’s peer group,      or above the median (50th      to 75th      percentile) for positions affected by market scarcity, recruitment and      retention issues, and other business reasons with annual salary targeted      to the same ranges Reviewed      annually to consider changes in peer group benchmark salaries and/or      exceptional individual merit performances in past years  |
|                                                                    |   |   |   |   |
| Annual      Incentive Compensation                                      |   | At-risk      and based on the attainment of certain pre-established performance goals      for the year |   | Target      annual incentive opportunities increase with position and responsibility      and are based on the opportunities other companies in TVA’s peer group      provide to those in similar positions Annual      incentive payouts are based on the results of performance goals at the TVA      level and business unit level, and also may be based on goals at the      individual level, and may be adjusted Annual      incentive opportunities are reviewed annually to consider changes in peer      group benchmark short-term incentives  |
|                                                                    |   |   |   |   |
| Long-Term      Incentive Compensation                                   |   | At-risk      and based on the attainment of certain pre-established performance goals      for a performance cycle, typically three years |   | Target      long-term incentive opportunities are limited to executives in critical      positions who make decisions that significantly influence the development      and execution of TVA’s long-term strategic objectives Target      long-term incentive payouts are based on the results of performance goals      established for a specific performance cycle and may be      adjusted Long-term      incentive opportunities are reviewed annually to consider changes in peer      group benchmark long-term incentives  |
|                                                                    |   |   |   |   |
| Long-Term      Deferred Compensation                                    |   | Awarded      in the form of annual credits that vest after a specified period of time,      typically three to five years |   | Awarded      to provide a benefit similar to restricted stock and to provide retention      incentives to executives Executives      generally must remain at TVA for the entire length of the agreement in      order to receive compensation credits Target      annual credit amounts such that long-term deferred compensation targeted      to comprise 20 percent of total long-term compensation (in conjunction      with long-term incentive compensation described above)  |
|                                                                    |   |   |   |   |
| Pension      Plans                                                      |   | Both      qualified and supplemental, which provide compensation beginning with      retirement or termination of employment |   | Broad-based      plans available to full-time employees of TVA that are qualified under IRS      rules and that are similar to the qualified plans provided by other      companies in TVA’s peer group Certain      executives in critical positions also participate in a non-qualified      pension plan that provides supplemental pension benefits tied to      compensation levels that exceed limits imposed by IRS regulations      applicable to TVA’s qualified plans, which is comparable to similar plans      provided by other companies in TVA’s peergroup |

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|   | • | Specifies      all compensation (including salary or any other pay, bonuses, benefits,      incentives, and any other form of remuneration) for the CEO and TVA      employees; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Is      based on an annual survey of the prevailing compensation for similar      positions in private industry, including engineering and electric utility      companies, publicly owned electric utilities, and federal, state, and      local governments; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Provides      that education, experience, level of responsibility, geographic      differences, and retention and recruitment needs will be taken into      account in determining compensation of  employees. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      TVA Board will annually approve all compensation (including salary or any      other pay, bonuses, benefits, incentives, and any other form of      remuneration) of all managers and technical personnel who report directly      to the CEO (including any adjustment to  compensation); |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | On      the recommendation of the CEO, the TVA Board will approve the salaries of      employees whose salaries would be in excess of Level IV of the Executive      Schedule ($153,200 in 2009); and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      CEO will determine the salary and benefits of employees whose annual      salary is not greater than Level IV of the Executive Schedule ($153,200 in      2009). |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Published      and customized compensation surveys reflecting the relevant labor markets      identified for designated positions,and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Publicly      disclosed information from the proxy statements and annual reports on Form      10-K of energy services companies with revenues of $3.0 billion      and greater. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | Test      target compensation level and incentive opportunity      competitiveness, |
|--------|---------|-------------------------------------------------------------------------------------|

|   | • | Serve      as a point of reference for establishing pay packages for recruiting      executives, and |
|--------|---------|------------------------------------------------------------------------------------------------------|

|   | • | Determine      appropriate adjustments to target compensation levels and incentive      opportunities to maintain the desired degree of market      competitiveness. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Allegheny      Energy, Inc.             | Energy      Future Holdings Corp.  | Pepco      Holdings, Inc.*                  |
|-----------------------------------------|------------------------------------|---------------------------------------------|
| Alliant      Energy Corp.               | Entergy      Corp.*                | Pinnacle      West Capital Corp.            |
| Ameren      Corp.*                      | Exelon      Corp.*                 | PPL      Corp.*                             |
| American      Electric Power Co., Inc.* | FirstEnergy      Corp.*            | Progress      Energy, Inc.*                 |
| Calpine      Corp.                      | FPL      Group, Inc.*              | Public      Service Enterprise Group, Inc.* |
| CenterPoint      Energy, Inc.           | Integrys      Energy Group, Inc. * | Puget      Energy, Inc.                     |
| CMS      Energy Corp.*                  | MDU      Resources Group, Inc.     | Reliant      Energy, Inc.*                  |
| Consolidated      Edison, Inc.*         | National      Grid USA             | SCANA      Corp.                            |
| Constellation      Energy Group, Inc.*  | Northeast      Utilities System *  | Sempra      Energy *                        |
| Dominion      Resources, Inc.*          | NRG      Energy, Inc.              | The      Southern Company *                 |
| Duke      Energy Corp.*                 | NSTAR      Electric Co.            | SUEZ      Energy North America              |
| Dynegy,      Inc.                       | OGE      Energy Corp.              | Wisconsin      Energy Corp.                 |
| Edison      International*              | Pacific      Gas and Electric Co.* | Xcel      Energy, Inc.*                     |
| El      Paso Corp.                      | PacifiCorp                         |                                        |

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| EAIPPayout | = | Salary | X | Annual      IncentiveOpportunity | X | Percent      of OpportunityAchieved |
|------------|---|--------|---|----------------------------------|---|-------------------------------------|

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| 2009      TVA Scorecard                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   | Goals1 |
| Performance Metric                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Weight |   | ResultsAchieved |   | Threshold(75%) |   | Target(100%) |   | Maximum(125%) |
| Customers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |
| Connection      Point Interruptions (Interruptions / Connection Point)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 20% |   | 0.75 |   | — |   | 1.12 |   | 0.78 |
| Financial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |
| Net      Cash Flow from Operations Less Investing ($ Millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 35% |   | (975) |   | (292) |   | (163) |   | (113) |
| Assets/Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Demand      Reduction ($ / kW Reduced)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 10% |   | 217 |   | 643 |   | 611 |   | 582 |
| Equivalent      Availability Factor (%)      2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 35% |   | 85.6 |   | 85.8 |   | 87.1 |   | 88.0 |
| Notes(1)  Performance      levels between threshold and target achievement levels, and between target      and maximum achievement levels, were calculated using      straight-line interpolation.(2)  The      equivalent availability factor for 2009 includes only nuclear, coal, and      combined cycle combustion turbine generation assets.  The      availability for simple cycle combustion cycle      combustion turbines and hydroelectric generation has been excluded      beginning in 2009.  This adjustment will focus TVA’s performance      on the equivalent availability      of base load facilities which are needed nearly all times of the      year.  Simple cycle combustion turbine and hydroelectric      generation performance will be measured      during critical periods of the year, and separate metrics will be utilized      to monitor this performance.  |

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|   | • | Using      performance criteria that are directly aligned with TVA’s Strategic      Plan; |
|--------|---------|-------------------------------------------------------------------------------------------------|

|   | • | Using      a “cumulative” performance approach to measure performance achieved for      three-year performance cycles; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Targeting      award opportunities at levels that approximate median levels of      competitiveness with TVA’s peer group and incorporating the FSRA      Committee’s policy of targeting that (i) approximately 80 percent of each      executive’s total long-term incentive opportunity be performance based      (under the ELTIP) and (ii) approximately 20 percent of each executive’s      total long-term incentive opportunity be retention and security-oriented      (under the Long-Term Deferred Compensation Plan (“LTDCP”) as described      below under the heading “Long-Term Deferred Compensation”);      and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Utilizing      a broad award opportunity range of 50 percent to 150 percent of salary to      enable payment of awards that are commensurate with performance      achievements. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      target goal (which will also serve as the threshold goal that must be met      before there is any incentive payment under this measure) is established      based on the 75th      percentile of the performance of the surveyed transmission providers (the      “ELTIP CPI Comparison Group”), and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      maximum goal is established at the 90th      percentile of the ELTIP CPI Comparison Group’s  performance. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

|   | • | The      threshold goal is based on improvement over the last performance      cycle, |
|--------|---------|---------------------------------------------------------------------------------------|

|   | • | The      target goal is TVA ranking at or above the 75th      percentile of the performance of a comparison group of regional utilities      composed of 22 utilities, which are subsidiaries of holding companies with      annual revenues greater than $3.0 billion,      in the regional proximity of the TVA service territory (the “ELTIP Retail      Rates Comparison Group”), and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The      maximum goal is TVA ranking at or above the 90th      percentile of the ELTIP Retail Rates Comparison Group’s      performance. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ELTIPPayout | = | Salary | X | ELTIP      IncentiveOpportunity | X | Percent      of OpportunityAchieved |
|-------------|---|--------|---|---------------------------------|---|-------------------------------------|

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| ELTIP Performance Goals, Weighting,      and Percent of Opportunity  |
|--------------------------------------------------------------------------------|
|                                                                           | Goals |   | Performance      Achievement |
| Performance      Measure                                                       | Threshold(50%) | Target(100%) | Maximum(150%) | Performance      Results | Actual(%) | X | Weight(%) | = | Result(%) |
| Retail      Rate                                                               | Improvement      Over Last Performance Cycle | Top      25% of ComparisonCompanies | Top      10% of Comparison Companies | Below      Threshold | 0.00% |   | 50% |   | 0.00% |
| Connection      Point Interrruption                                            |   |  Top      25% of Comparison Companies |  Top      10% of Comparison Companies |  Maximum |  150% |   |  50% |   |  75% |
|                                                                           |   |   |   | Overall      Percent of Opportunity Achieved | 75% |

| 2009      ELTIP Payouts        |
|-------------------------------------|
| NEO                                 | Salary | ELTIP      Incentive Opportunity | Target      ELTIP Payout | Percent      of Opportunity Achieved | ELTIP      Payout |
|  Tom      D. Kilgore           |  $850,000 |  150% |  $1,275,000 |  NA |  $0 |
|  Kimberly      S. Greene       |  $525,000 |  100% |  $525,000 |  75.00% |  $393,750 |
|  William      R. McCollum, Jr. |  $745,514 |  100% |  $745,514 |  75.00% |  $559,136 |
|  Preston      D. Swafford      |  $525,000 |  100% |  $525,000 |  75.00% |  $393,750 |
|  Ashok      S. Bhatnagar       |  $456,246 |  50% |  $228,123 |  75.00% |  $171,092 |

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| CEO      Peer Group Compensation Comparison                                                                                                                                                                                               |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                           | Watson      Wyatt Chief Executive Officer Median Market      Data Range (TVA Peer Group) | TVA      Board Approved Target Compensation      for 2009 |
|                                                                                                                                                                                                                                           |   |   |
| Base      Salary                                                                                                                                                                                                                               | $1,046,000      - $1,150,000 | $850,000 |
| Annual      Incentive %                                                                                                                                                                                                                        | 100% | 100% |
| Total      Cash Compensation                                                                                                                                                                                                                   | $2,091,000      - $2,303,000 | $1,700,000 |
| Long-Term      Incentive %                                                                                                                                                                                                                     | 335%      - 385% | 150% |
| Total      Direct Compensation                                                                                                                                                                                                                 | $5,594,000      - $6,732,000 | $3,275,000* |
| Note*  Includes an annual credit of      $300,000 provided under a LTDCP agreement.  See information      regarding the details of the LTDCP agreement under “Long-Term      Deferred Compensation Plan.” |

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|   | – | Cash      Balance Benefit Structure (“CBBS”) for employees first hired on or after      January 1, 1996, with a pension based on an account that receives pay      credits equal to six percent of compensation plus  interest |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | – | For      CBBS members, TVA provides matching contributions of 75 cents on every      dollar up to 4.5 percent of annualsalary. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------|

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Executive Compensation Tables and NarrativeDisclosures

| Summary      Compensation Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Name      and Principal Position(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Year(b) | Salary($)(c) | Bonus($)(d) | StockAwards($)(e) | OptionAwards($)(f) | Non-Equity      Incentive Plan Compensation($)(g) | Change      in Pension Value andNonqualified      Deferred Compensation  Earnings($)(h) | All      Other Compensation($)(i) | Total($)(j) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Tom      D. KilgorePresident      and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 200920082007 | $853,270$655,000$308,693 | ——$341,293      5 | ——— | ——— | $0$1,099,426      3$890,507      6 | $0      1$406,152      4$138,274      7 | $310,350      2$310,125$309,900 | $1,163,620$2,470,703$1,988,667 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Kimberly      S. GreeneChief      Financial Officer and Executive Vice President, Financial      Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 200920082007 | $527,020$503,847$38,462 | ——— | ——— | ——— | $393,750      8$493,838      11$36,159      13 | $135,091      9$223,707      12$242,752      14 | $172,082      10$78,797$370,900 | $1,227,943$1,300,189$688,273 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| William      R. McCollum, Jr.Chief      Operating Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 200920082007 | $748,381$726,547$293,461 | ——— | ——— | ——— | $559,136      15$751,751      18$1,042,132      20 | $265,870      16$126,440      19$2,026,417      21 | $222,082      17$223,237$468,727 | $1,795,469$1,827,975$3,830,737 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Preston      D. SwaffordChief      Nuclear Officer andExecutive      Vice President, TVA Nuclear                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 200920082007 | $499,877—— | $100,000      22—— | ——— | ——— | $558,390      23        —        — | $201,516      24        —        — | $147,08225        —        — | $1,506,865        —        — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |
| Ashok      S. BhatnagarSenior      Vice President, Nuclear Generation Development and      Construction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 200920082007 | $458,001$437,863$236,608 | ——$189,384      5 | ——— | ——— | $375,609      26$403,661      29$470,668      31 | $245,892      27$29,226      30$154,937      32 | $165,437      28$165,612$165,405 | $1,244,939$1,036,362$1,217,002 |
| Notes(1)        Reflects an increase of $16,929 under the CBBS and a decrease of $133,752      under the SERP. (2)        Represents a credit in the amount of $300,000 that vested on September 30,      2009, which was provided under a LTDCP agreement with Mr. Kilgore, and      $10,350 in 401(k) employer matching contributions.  See      information regarding the details of the LTDCP agreement under “Long-Term      Deferred Compensation Plan.” (3)        Represents $374,806 awarded under the EAIP and $724,620 awarded under the      ELTIP. (4)        Represents increases of $12,232 under the CBBS and $393,920 under the      SERP. (5)        Represents additional annual compensation paid in quarterly installments      through May 31, 2007.  Prior to March 31, 2006, the TVA Act      provided that salaries for TVA employees, including the Named Executive      Officers, could match but not exceed the salary of a TVA Board      member.  Although the TVA Act, as amended by the Consolidated      Appropriations Act, removed this limitation, salaries were limited to      $145,400 for a portion of 2007.  Accordingly, additional annual      compensation, which was paid in quarterly installments, was used in      conjunction with salaries to provide a competitive level of base      compensation. (6)        Represents $427,382 awarded under the EAIP and $463,125 awarded under the      ELTIP. (7)        Represents increases of $11,088 under the CBBS and $127,186 under the      SERP. (8)        Represents $393,750 awarded under the ELTIP. (9)       Represents increases of $20,754 under the CBBS and $114,337 under the      SERP. (10)      Represents unvested annual credits totaling $150,000 provided under two      separate LTDCP agreements with Ms. Greene, $11,732 in vehicle allowance      payments, and $10,350 in 401(k) employer matching      contributions.  See information regarding the details of the      LTDCP agreements under “Long-Term Deferred CompensationPlan.” (11)      Represents $252,298 awarded under the EAIP and $241,540 awarded under the      ELTIP. (12)      Represents increases of $9,529 under the CBBS and $214,178 under the      SERP. (13)      Represents $25,439 awarded under the EAIP and $10,720 awarded under the      ELTIP. (14)      Represents increases of $5,598 under the CBBS and $237,154 under the      SERP. (15)      Represents $559,136 awarded under the ELTIP. (16)      Represents increases of $15,789 under the CBBS and $250,081 under the      SERP. (17)      Represents an unvested annual credit in the amount of $200,000 provided      under a LTDCP agreement with Mr. McCollum, $11,732 in vehicle allowance      payments, and $10,350 in 401(k) employer matching      contributions.  See information regarding the details of the      LTDCP agreement under “Long-Term Deferred Compensation Plan.”  |

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| (18)      Represents $376,658 awarded under the EAIP and $375,093 awarded under the      ELTIP. (19)      Represents increases of $10,821 under the CBBS and $115,619 under the      SERP. (20)      Represents $460,257 awarded under the EAIP and $581,875 awarded under the      ELTIP. (21)      Represents increases of $5,385 under the CBBS and $2,021,032 under the      SERP. (22)      Represents a lump sum performance payment awarded for an improved nuclear      power industry peer evaluation of Watts Bar Nuclear Plant in      2009. (23)      Represents $164,640 awarded under the EAIP and $393,750 awarded under the      ELTIP. (24)      Represents increases of $27,674 under the CBBS and $173,842 under the      SERP. (25)      Represents an unvested annual credit in the amount of $125,000 provided      under a LTDCP agreement with Mr. Swafford, $11,732 in vehicle allowance      payments, and $10,350 in 401(k) employer matching      contributions.  See information regarding the details of the      LTDCP agreement under “Long-Term Deferred Compensation Plan.” (26)      Represents $204,517 awarded      under the EAIP and $171,092 awarded under the ELTIP. (27)      Represents increases of $36,696 under the CBBS and $209,196 under the      SERP. (28)      Represents a credit in the amount of $150,000 that vested on September 30,      2009, which was provided under a LTDCP agreement with Mr. Bhatnagar,      $11,732 in vehicle allowance payments, and $3,705 in 401(k) employer      matching contributions.   See information regarding the      details of the LTDCP agreement under “Long-Term Deferred Compensation      Plan.” (29)      Represents $258,340 awarded under the EAIP and $145,321 awarded under the      ELTIP. (30)      Represents increases of $14,284 under the CBBS and $14,942 under the      SERP. (31)      Represents $199,572 awarded under the EAIP, $227,644 awarded under the      ELTIP, and a credit in the amount of $43,452 made to Mr. Bhatnagar’s      deferred compensation account provided under a LTDCP agreement with Mr.      Bhatnagar for achievement of major milestones in 2007 associated with the      Browns Ferry Unit 1 Recovery Project. (32)      Represents increases of $16,030 under the CBBS and $138,907 under the      SERP.  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Grants      of Plan-Based Awards Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Estimated      Possible Payouts UnderNon-Equity      Incentive Plan Awards 1 |
|   Name(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   Plan(b) |  Threshold      2($)(c) |  Target      2($)(d) |  Maximum      2($)(e) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Tom      D. Kilgore                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | EAIP      3ELTIP      4 | $637,500      / $0$637,500      / $0 | $850,000      / $0$1,275,000      / $0 | $1,062,500      / $0$1,912,500      / $0 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Kimberly      S. Greene                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | EAIP      3ELTIP      4 | $275,625      / $0$262,500      / $262,500 | $367,500      / $0$525,000      / $525,000 | $459,375      / $0$787,500      / $787,500 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| William      R. McCollum, Jr.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | EAIP      3ELTIP      4 | $391,395      / $0$372,757      / $372,757 | $521,860      / $0$745,514      / $745,514 | $652,325      / $0$1,118,271      / $1,118,271 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Preston      D. Swafford                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | EAIP      3ELTIP      4 | $315,000      / $220,500$262,500      / $262,500 | $420,000      / $294,000$525,000      / $525,000 | $525,000      / $367,500$787,500      / $787,500 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Ashok      S. Bhatnagar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | EAIP      3ELTIP      4 | $205,311      / $143,718$114,062      / $114,062  | $273,748      / $191,624$228,123      / $228,123  | $342,185      / $239,530$342,185      / $342,185  |
| Notes(1)  TVA      does not have any equity securities and therefore has no equity-based      awards. (2)  Threshold,      Target, and Maximum represent amounts that could be earned by an NEO      before/after the February 12, 2009 action of the TVA      Board.  Actual EAIP awards earned for performance in 2009 are      reported for each of the Named Executive Officers who receive them under      “Non-Equity Incentive Plan Compensation” in the Summary Compensation      Table. (3)  Target      incentive opportunities as a percentage of salaries were as      follows:  Mr. Kilgore, 100%; Ms. Greene, 70%; Mr. McCollum, 70%;      Mr. Swafford, 80%; Mr. Bhatnagar, 60%.  Actual EAIP awards      earned for performance in 2009 are reported for each of the Named      Executive Officers who receive them under “Non-Equity Incentive Plan      Compensation” in the Summary Compensation Table. (4)  Target      incentive opportunities for the two-year performance cycle ended September      30, 2009 as a percentage of salaries were as follows: Mr. Kilgore, 150%;      Ms. Greene, 100%; Mr. McCollum, 100%; Mr. Swafford, 100%; Mr. Bhatnagar,      50%.  Actual ELTIP awards earned for the performance cycle ended      on September 30, 2009, are reported for each of the Named Executive      Officers who receive them under “Non-Equity Incentive Plan Compensation”      in the Summary Compensation Table. |

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| Pension      Benefits Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|    Name(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |    Plan      Name(b) | Number      ofYears      of Credited Service 1(#)(c) |   | Present      Value of Accumulated Benefit($)(d) |   |  Payments      During Last Year($)(e) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |
| Tom      D. Kilgore                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (1)      Qualified Plan – CBBS(2)      Non-Qualified – SERP Tier 1 |   4.58     8.00      2 |   |     $53,738$1,845,052 |   | $0$0 |
| Kimberly      S. Greene                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (1)      Qualified Plan – CBBS(2)      Non-Qualified – SERP Tier 1 |   2.08     17.08      3 |   |      $35,881   $565,669 |   | $0$0 |
| William      R. McCollum, Jr.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (1)      Qualified Plan – CBBS(2)      Non-Qualified – SERP Tier 1 | 2.42  12.42      4 |   |     $31,995$2,386,732 |   | $0$0 |
| Preston      D. Swafford                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (1)      Qualified Plan – CBBS(2)      Non-Qualified – SERP Tier 1 | 3.42   8.42      5 |   |   $56,889$542,851 |   | $0$0 |
| Ashok      S. Bhatnagar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (1)      Qualified Plan – CBBS(2)      Non-Qualified – SERP Tier 1 | 10.0810.08 |   |    $149,257   $779,125 |   | $0$0 |
|  Notes(1)       Limited to 24 years when determining supplemental benefits available under      SERP Tier 1, described below. (2)       Mr. Kilgore has been granted three additional years of credited service      for pre-TVA employment following five years of actual TVA      service.  In the event his employment is      terminated during the first five years (other than for cause), the      five-year vesting requirement will be waived and he will receive credit      for eight years of service.  In      addition, the offset for prior employer pension benefits will be waived,      and the offset for benefits provided under TVA’s defined benefit plan will      be calculated  based      on the actual pension benefit he will receive as a participant in the      CBBS.  Without waiving the vesting requirement and the      additional years of credited service, the      present value of Mr. Kilgore’s accumulated benefit would be      $0. (3)       Ms. Greene has been granted 15 additional years of credited service for      pre-TVA employment and the offset for prior employer pension benefits has      been waived.  The offset      for benefits provided under TVA’s defined benefit plan will be calculated      based on the benefit she will be eligible to receive as a participant in      the CBBS taking into      account the additional years of credited service being used for SERP      benefit calculation purposes.  In the event that Ms. Greene      voluntarily terminates her employment with TVA      or is terminated for cause prior to satisfying the minimum five-year      vesting requirement, no benefits will be provided under the      SERP.  In the event of termination      for any other reason, prior to five years of employment, the five-year      vesting requirement will be waived and the benefit Ms. Greene will be      eligible to receive      will be payable no earlier than age 55.  As of September 30,      2009, the present value of this benefit is $565,669.  Without      the additional years of credited service,      the present      value of Ms. Greene’s accumulated benefit would be  $0. |

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|  (4)       Mr. McCollum has been granted 10 additional years of credited service for      pre-TVA employment and the offset for prior employer pension benefits has      been waived.  The      additional years of credited service will be used for SERP benefit      calculation purposes only and will not count toward the minimum five-year      vesting requirement.  In      the event Mr. McCollum voluntarily terminates his employment with TVA or      is terminated for cause prior to satisfying the minimum five-year vesting      requirement,      no benefits will be provided under the SERP.  In the event of      termination for any other reason, prior to five years of employment, the      five-year vesting requirement will      be waived as long as the termination is considered acceptable to TVA, and      Mr. McCollum would be eligible to receive benefits payable in five annual      installments      following termination.  The present value of this benefit as of      September 30, 2009, is $2,386,732.  Without waiving the vesting      requirement and the additional years      of credited service, the present value of Mr. McCollum’s accumulated      benefit would be $0. (5)       Mr. Swafford has been granted five additional years of credited service      for pre-TVA employment and the offset for prior employer pension benefits      has been waived.  The additional      years of credited service will be used for SERP benefit calculation      purposes only and will not count toward the minimum five-year vesting      requirement.  In addition,      the offset for benefits provided under TVA’s defined benefit plan will be      calculated based on the benefit he would be eligible to receive as a      participant      in the CBBS taking into account the additional years of credited service      being used for SERP benefit calculation purposes.  In the event      Mr. Swafford voluntarily      terminates his employment with TVA or is terminated for cause prior to      satisfying the minimum five-year vesting requirement, no benefits will be      provided under      the SERP.  The present value of this benefit as of September 30,      2009, is $542,851.  Without the additional years of credited      service, the present value of Mr. Swafford’s      accumulated benefit would be $0.  |
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| Nonqualified      Deferred Compensation Table                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|    Name(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | ExecutiveContributions      inLast      FY($)(b) | RegistrantContributions      inLast      FY($)(c) | AggregateEarnings      inLast      FY 1($)(d) | AggregateWithdrawals/Distributions($)(e) | AggregateBalance      atLast      FYE 2($)(f) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |
| Tom      D. Kilgore                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $0 | $300,000      3 | $109,883 |          $0 | $3,441,513      4 |
| Kimberly      S. Greene                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $0 | $150,000      5 | $16,353 |         $0 | $461,422      6 |
| William      R. McCollum, Jr.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $559,136      7 | $200,000      8 | $106,764 |         $0 | $2,251,606      9 |
| Preston      D. Swafford                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $98,438      10 | $125,000      11 | $29,586 |         $0 | $837,884      12 |
| Ashok      S. Bhatnagar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $0 | $150,000      13 | $2,845 |         $0 | $2,298,372      14 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |
| Notes(1)  Includes      vested and unvested earnings.  Because none of the amounts is      above market earnings under SEC rules, none of these amounts is included      in the Summary Compensation Table. (2)  Includes      vested and unvested contributions and earnings. (3)  Represents      an unvested annual credit in the amount of $300,000 provided under a LTDCP      agreement with Mr. Kilgore (reported in the “All       Other Compensation”      column in the Summary Compensation Table). (4)  A      total of $2,311,522 was reported as compensation to Mr. Kilgore in the      Summary Compensation Tables in previous years. (5)  Represents      an unvested annual credit in the amount of $150,000 provided under two      separate LTDCP agreements with Ms. Greene (reported in the      “All Other Compensation” column in the Summary Compensation      Table). (6)  Includes      a total of $155,290 of contributions and earnings that were not vested as      of September 30, 2009.  A total of $280,000 was reported as      compensation      to Ms. Greene in the Summary Compensation Tables in previous      years. (7)  Mr.      McCollum elected to defer 100 percent of the $559,136 to be awarded under      the ELTIP for the performance cycle that ended on      September 30,      2009 (reported in the “Non-Equity Incentive Plan Compensation” column in      the Summary Compensation Table). (8)  Represents      an unvested annual credit in the amount of $200,000 provided under a LTDCP      agreement with Mr. McCollum (reported in the "All      Other Compensation” column in the Summary CompensationTable). (9)  Includes      a total of $398,147 of contributions and earnings that were not vested as      of September 30, 2009.  The amount reported in “Executive      Contributions      in Last FY” column will be credited to his account in the first quarter of      2010 and is not included in the balance.  A total of       $2,083,350      was reported as compensation to Mr. McCollum in the Summary Compensation      Tables in previous years. (10) Mr.      Swafford elected to defer 25 percent of the $393,750 to be awarded under      the ELTIP for the performance cycle that ended on September 30,      2009 (reported in the “Non-Equity Incentive Plan Compensation” column in      the Summary Compensation Table). (11) Represents      an unvested annual credit in the amount of $125,000 provided under a LTDCP      agreement with Mr. Swafford (reported in the “All Other      Compensation” column in the Summary Compensation Table). (12) Includes      a total of $553,815 of contributions and earnings that were not vested as      of September 30, 2009.  The amount reported in      "Executive      Contributions in Last FY” column will be credited to his account in the      first quarter of 2010 and is not included in the balance. (13)      Represents an unvested annual credit in the amount of $150,000 provided      under a LTDCP agreement with Mr. Bhatnagar (reported in      the "All       Other Compensation” column in the Summary CompensationTable). (14)      A total of $533,452 was reported as compensation to Mr. Bhatnagar in the      Summary Compensation Tables in previousyears. |

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Termination Compensation and OtherArrangements

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Other Agreements

Director Compensation

| TVA      Board Annual Stipends |
|--------------------------------|
|                           |   |   |
|  Name                     |   | Annual      Stipend($) |
|                           |   |   |
| Dennis      C. Bottorff        |   | $49,300 |
| Robert      M. Duncan          |   | $53,700 |
| Thomas      C. Gilliland       |   | $49,300 |
| Bishop      William H. Graves  |   | $49,300 |
| William      B. Sansom         |   | $48,200 |
| Howard      A. Thrailkill      |   | $49,300 |

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| Director      Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        Name(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      Fees      Earned or Paid in Cash($)(b) |      StockAwards($)(c) |      OptionAwards($)(d) |     Non-EquityIncentive      PlanCompensation($)(e) |  Change      inPension      ValueandNonqualifiedDeferredCompensationEarnings 1($)(f) |      All      Other Compensation($)(g) |       Total($)(h) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Dennis      C. Bottorff                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $49,093 |  |  |  |  | $495 | $49,588 |
| Donald      R. DePriest 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $25,827 |  |  |  |  | $258 | $26,085 |
| Robert      M. Duncan 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $49,629 |  |  |  |  | $501 | $50,130 |
| Thomas      C. Gilliland                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $49,093 |  |  |  |  | $495 | $49,588 |
| Bishop      William H. Graves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $48,348 |  |  |  |  | $488 | $48,836 |
| William      B. Sansom                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $51,406 |  |  |  |  | $519 | $51,925 |
| Howard      A. Thrailkill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $49,093 |  |  |  |  | $2,476 | $51,569 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Notes(1)  TVA      directors do not participate in the TVA Retirement System, TVA’s SERP, or      any non-qualified deferred compensation plan available to TVA      employees.  However, as appointed officers      of the United States government, the directors are members of the Federal      Employees Retirement System (“FERS”).  FERS is administered by      the federal Office of Personnel Management,      and information regarding the value of FERS pension benefits is not      available to TVA. (2)  Mr.      DePriest resigned as director on April 8, 2009. (3)  Mr.      Duncan became Chairman on May 19, 2009. (4)  Mr. Sansom’s      term as Chairman expired on May 19, 2009, but he has continued to serve as      director since that time, as he is entitled to remain in office until the      end of the current session of      Congress.  |

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Compensation Committee Interlocks and InsiderParticipation

Compensation Committee Report

ITEM 12.  SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

ITEM 13.  CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence

Related Party Transactions

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| 1.   | For      purposes of this policy, “financial interest” means an interest of a      person, or of a person’s spouse or minor child, arising by virtue of      investment or credit relationship, ownership, employment, consultancy, or      fiduciary relationship such as director, trustee, or      partner.  However, financial interest does not include an      interest in TVA or any interest: |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | comprised      solely of a right to payment of retirement benefits resulting from former      employment or fiduciaryrelationship, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------|

| •   | arising      solely by virtue of cooperative membership or similar interest as a      consumer in a distributor of TVA power,or |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------|

| •   | arising      by virtue of ownership of publicly traded securities in any single entity      with a value of $25,000 or less, or within a diversified mutual fund      investment in any amount. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Directors      and the Chief Executive Officer shall not hold a financial interest in any      distributor of TVA power. |
|----------------|--------------------------------------------------------------------------------------------------------------------------|

| 3.   | Directors      and the Chief Executive Officer shall not hold a financial interest in any      entity engaged in the wholesale or retail generation, transmission, or      sale of electricity. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Directors      and the Chief Executive Officer shall not hold a financial interest in any      entity that may reasonably be perceived as likely to be adversely affected      by the success of TVA as a producer or transmitter of electric      power. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Any      action taken or interest held that creates, or may reasonably be perceived      as creating, a conflict of interest restricted by this additional policy      applicable to TVA Directors and the Chief Executive Officer should      immediately be disclosed to the Chairman of Board of Directors and the      Chairman of the Audit, Governance,      and Ethics Committee.  The Audit, Governance, and Ethics      Committee shall be responsible for initially reviewing all such      disclosures and making recommendations to the entire Board on what action,      if any, should be taken.  The entire Board, without the vote of      any Director(s) involved, shall determine the appropriate action to be      taken. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 6.   | Any      waiver of this additional policy applicable to TVA Directors and the Chief      Executive Officer may be made only by the Board, and will be disclosed      promptly to the public, subject to the limitations on disclosure imposed      by law. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 14.  PRINCIPAL ACCOUNTANT FEESAND SERVICES

| Principal      Accountant Fees and Services(in      actual dollars)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
| Year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Principal      Accountant |   | Audit      Fees1 |   |   | Audit-Related      Fees2 |   |   | All      Other Fees |   |   | Total |   |
| 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Ernst      and Young LLP  |   | $ | 2,125,603 |   |   | $ | — |   |   |   | — |   |   | $ | 2,125,603 |   |
| 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Ernst      and Young LLP  |   |   | 1,603,016 |   |   |   | 517,090 |   |   |   | — |   |   |   | 2,120,106 |   |
| Notes(1) Audit      fees consist of fees for professional services rendered for the audit of      internal control over financial reporting (2009), and of TVA's      annual       financial statements, fees for review of the interim financial statements      included in TVA's quarterly reports, and fees for Bond offering      comfort      letters.(2) Audit-related      fees include professional      services rendered in connection with Sarbanes-Oxley Act of 2002 Section      404 readiness assistance. |                      |

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| •   | The      aggregate amount of all such non-audit services provided to TVA does not      exceed 5 percent of the total amount TVA pays the external auditor during      the fiscal year in which the non-audit services are    provided; |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Such      services were not recognized by TVA at the time of the engagement to be      non-audit services or non-audit related services;  and |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Such      services are promptly brought to the attention of the Audit, Governance,      and Ethics Committee and approved at the next scheduled Audit, Governance,      and Ethics Committee meeting or by one or more members of the Audit,      Governance, and Ethics Committee to whom the authority to grant such      approvals has been delegated. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Bookkeeping      or other services related to the accounting records or financial      statements of TVA; |
|---------------------|-----------------------------------------------------------------------------------------------------------|

| •   | Financial      information system design andimplementation; |
|---------------------|-------------------------------------------------------------|

| •   | Appraisal      or valuation services, fairness opinions, and contribution-in-kind      reports; |
|---------------------|-------------------------------------------------------------------------------------------------|

| •   | Actuarial      services; |
|---------------------|--------------------------|

| •   | Internal      audit outsourcing services; |
|---------------------|-------------------------------------------|

| •   | Management      functions or human resources; |
|---------------------|-----------------------------------------------|

| •   | Broker      or dealer, investment adviser, or investment banking    services; |
|---------------------|-------------------------------------------------------------------------------|

| •   | Legal      services and expert services unrelated to the audit;  and |
|---------------------|----------------------------------------------------------------------|

| •   | Any      other services that the Public Company Accounting Oversight Board      determines, by regulation, isimpermissible. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------|

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PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENTSCHEDULES

|   | Schedules      not included are omitted because they are not required or because the      required information is provided in the financial statements, including      the notes thereto. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Schedule      II — Valuation and Qualifying Accounts(in      millions) |   |
|------------------------------------------------------------------------------|--------|
|   Description                                                      |   |  Balance      at beginning of year |   |   | Additions      charged to expense |   |   |   Deductions |   |   | Balance      at end  of      year |   |
| For      the year ended September 30, 2009                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|     Receivables                                          |   | $ | 2 |   |   | $ | — |   |   | $ | — |   |   | $ | 2 |   |
|     Loans                                                |   |   | 13 |   |   |   | 1 |   |   |   | (1 | ) |   |   | 13 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      allowances deducted from assets                                   |   | $ | 15 |   |   | $ | 1 |   |   | $ | (1 | ) |   | $ | 15 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| For      the year ended September 30, 2008                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Receivables                                          |   | $ | 2 |   |   | $ | 1 |   |   | $ | (1 | ) |   | $ | 2 |   |
|     Loans                                                |   |   | 15 |   |   |   | 4 |   |   |   | (6 | ) |   |   | 13 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      allowances deducted from assets                                   |   | $ | 17 |   |   | $ | 5 |   |   | $ | (7 | ) |   | $ | 15 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| For      the year ended September 30, 2007                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Receivables                                          |   | $ | 10 |   |   | $ | — |   |   | $ | (8 | ) |   | $ | 2 |   |
|     Loans                                                |   |   | 15 |   |   |   | — |   |   |   | — |   |   |   | 15 |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      allowances deducted from assets                                   |   | $ | 25 |   |   | $ | — |   |   | $ | (8 | ) |   | $ | 17 |   |

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Table of Contents

| Exhibit  No.  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                          | Tennessee      Valley Authority Act of 1933, as amended, 16 U.S.C.      §§ 831-831ee (Incorporated by reference to Exhibit 3.1 to TVA’s      Quarterly Report on Form 10-Q for the quarter ended December 31, 2007,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2                          | Bylaws      of Tennessee Valley Authority Adopted by the TVA Board of Directors on May      18, 2006, as Amended on April 3, 2008, and May 19, 2008 (Incorporated by      reference to Exhibit 3.1 to TVA’s Quarterly Report on Form 10-Q for the      quarter ended June 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1                          | Basic      Tennessee Valley Authority Power Bond Resolution Adopted by the TVA Board      of Directors on October 6, 1960, as Amended on September 28, 1976, October      17, 1989, and March 25, 1992 (Incorporated by reference to Exhibit 4.1 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1*                        | Fall      Maturity Credit Agreement Dated as of March 26, 2009, Among TVA, Bank of      America, N.A., as Administrative Agent, Bank of America, N.A., as a      Lender, and the Other Lenders Party Thereto (Incorporated by reference to      Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2*                        | Spring      Maturity Credit Agreement Dated as of March 26, 2009, Among TVA, Bank of      America, N.A., as Administrative Agent, Bank of America, N.A., as a      Lender, and the Other Lenders Party Thereto (Incorporated by reference to      Exhibit 10.2 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3*                        | Amendment      Dated as of May 13, 2009, to Spring Maturity Credit Agreement Dated as of      March 26, 2009, Among TVA, Bank of America, N.A., as Administrative Agent,      Bank of America, N.A., as a Lender, and the Other Lenders Party Thereto      (Incorporated by reference to Exhibit 99.1 to TVA’s Current Report on Form      8-K filed on May 15, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4*                        | Amendment      Dated as of November 9, 2009, to Fall Maturity Credit Agreement Dated as      of March 26, 2009, Among TVA, Bank of America, N.A., as Administrative      Agent, Bank of America, N.A., as a Lender, and the Other Lenders Party      Thereto (Incorporated by reference to Exhibit 99.1 to TVA’s Current Report      on Form 8-K filed on November 13, 2009, File No.  000-52313)                                                                                                                                                                                                                                                                                                                               |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5                         | TVA      Discount Notes Selling Group Agreement (Incorporated by reference to      Exhibit 10.2 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      June 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6                         | Electronotes®      Selling Agent Agreement Dated as of June 1, 2006, Among TVA, LaSalle      Financial Services, Inc., A.G. Edwards & Sons, Inc., Citigroup Global      Markets Inc., Edward D. Jones & Co., L.P., First Tennessee Bank      National Association, J.J.B. Hilliard, W.L. Lyons, Inc., Merrill Lynch,      Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.      Incorporated, and Wachovia Securities, LLC (Incorporated by reference to      Exhibit 10.4 to TVA’s Annual Report on Form 10-K for the year ended      September 30, 2006, File No. 000-52313)                                                                                                                    |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.7                         | Assumption      Agreement Between TVA and Incapital LLC Dated as of February 29, 2008,      Relating to the electronotes®      Selling Agent Agreement Dated as of June 1, 2006, Among TVA, LaSalle      Financial Services, Inc., A.G. Edwards & Sons, Inc., Citigroup Global      Markets Inc., Edward D. Jones & Co., L.P., First Tennessee Bank      National Association, J.J.B. Hilliard, W.L. Lyons, Inc., Merrill Lynch,      Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.      Incorporated, and Wachovia Securities, LLC (Incorporated by reference to      Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2008, File No. 000-52313) |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.8                         | Commitment      Agreement Among Memphis Light, Gas and Water Division, the City of      Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by      reference to Exhibit 10.5 to TVA’s Annual Report on Form 10-K for the year      ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.9                         | Power      Contract Supplement No. 95 Among Memphis Light, Gas and Water Division,      the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003      (Incorporated by reference to Exhibit 10.6 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2006, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.10                        | Void      Walk Away Agreement Among Memphis Light, Gas and Water Division, the City      of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated      by reference to Exhibit 10.7 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.11                        | Power      Contract Supplement No. 96 Among Memphis Light, Gas and Water Division,      the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003      (Incorporated by reference to Exhibit 10.8 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2006, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12*                       | Joint      Ownership Agreement Dated as of April 30, 2008, Between Seven States Power      Corporation and TVA (Incorporated by reference to Exhibit 10.3 to TVA’s      Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File      No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.13                        | Supplement      No. 1 Dated as of September 2, 2008, to the Joint Ownership Agreement      Dated as of April 30, 2008, Between Seven States Power Corporation and TVA      (Incorporated by reference to Exhibit 10.16 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                 |

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Table of Contents

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.14        | Supplement      No. 2 Dated as of September 30, 2008, to the Joint Ownership Agreement      Dated as of April 30, 2008, Between Seven States Power Corporation and TVA      (Incorporated by reference to Exhibit 10.17 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.15        | Supplement      No. 3 Dated as of April 17, 2009, to the Joint Ownership Agreement Dated      as of April 30, 2008, Between Seven States Power Corporation and      TVA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.16        | Lease      Agreement Dated as of September 30, 2008, Between TVA and Seven States      Southaven, LLC (Incorporated by reference to Exhibit 10.18 to TVA’s Annual      Report on Form 10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.17        | First      Amendment Dated as of April 17, 2009, to Lease Agreement Dated September      30, 2008, Between TVA and Seven States Southaven, LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.18*       | Buy-Back      Arrangements Dated as of September 30, 2008, Among TVA, JPMorgan Chase      Bank, National Association, as Administrative Agent, Lead Arranger, and a      Lender, and the Other Lenders Referred to Therein (Incorporated by      reference to Exhibit 10.19 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.19        | Overview      of TVA’s September 26, 2003, Lease and Leaseback of Control, Monitoring,      and Data Analysis Network with Respect to TVA’s Transmission System in      Tennessee, Kentucky, Georgia, and Mississippi (Incorporated by reference      to Exhibit 10.9 to TVA’s Annual Report on Form 10-K for the year ended      September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.20*       | Participation      Agreement Dated as of September 22, 2003, Among (1) TVA, (2) NVG Network I      Statutory Trust, (3) Wells Fargo Delaware Trust Company, Not in Its      Individual Capacity, Except to the Extent Expressly Provided in the      Participation Agreement, But as Owner Trustee, (4) Wachovia Mortgage      Corporation, (5) Wilmington Trust Company, Not in Its Individual Capacity,      Except to the Extent Expressly Provided in the Participation Agreement,      But as Lease Indenture Trustee, and (6) Wilmington Trust Company, Not in      Its Individual Capacity, Except to the Extent Expressly Provided in the      Participation Agreement, But as Pass Through Trustee (Incorporated by      reference to Exhibit 10.10 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313) |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.21*       | Network      Lease Agreement Dated as of September 26, 2003, Between NVG Network I      Statutory Trust, as Owner Lessor, and TVA, as Lessee (Incorporated by      reference to Exhibit 10.11 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.22*       | Head      Lease Agreement Dated as of September 26, 2003, Between TVA, as Head      Lessor, and NVG Network I Statutory Trust, as Head Lessee (Incorporated by      reference to Exhibit 10.12 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.23*       | Leasehold      Security Agreement Dated as of September 26, 2003, Made by NVG Network I      Statutory Trust to TVA (Incorporated by reference to Exhibit 10.13 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.24† | TVA      Compensation Plan Approved by the TVA Board on May 31, 2007 (Incorporated      by reference to Exhibit 99.3 to TVA’s Current Report on Form 8-K filed on      December 11, 2007, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.25† | TVA      Vehicle Allowance Guidelines, Effective April 1, 2006 (Incorporated by      reference to Exhibit 10.18 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2007, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.26† | Supplemental      Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.27† | Executive      Annual Incentive Plan (Incorporated by reference to Exhibit 10.3 to TVA’s      Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.28† | Executive      Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.4 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.29† | Long-Term      Deferred Compensation Plan (Incorporated by reference to Exhibit 10.5 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.30† | Deferred      Compensation Plan (Incorporated by reference to Exhibit 10.2 to TVA’s      Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.31† | Overview      of Financial Counseling Services Program                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.32† | Offer      Letter to Tom D. Kilgore Accepted as of January 19, 2005 (Incorporated by      reference to Exhibit 10.19 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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Table of Contents

| 10.33†                                                                                                                                                                                                                                                                                                                                                       | Offer      Letter to William R. McCollum, Jr., Accepted as of March 9, 2007      (Incorporated by reference to Exhibit 10.26 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2007, File No.      000-52313)                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.34†                                                                                                                                                                                                                                                                                                                                                       | Offer      Letter to Kimberly S. Greene Accepted as of August 3, 2007 (Incorporated      by reference to Exhibit 10.27 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2007, File No. 000-52313)                               |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.35†                                                                                                                                                                                                                                                                                                                                                       | Compensation      Arrangements for Preston D. Swafford Effective as of February 5,      2009                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.36†                                                                                                                                                                                                                                                                                                                                                       | Overview      of Compensation Arrangements for Preston D. Swafford Effective as of July      1, 2009                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.37†                                                                                                                                                                                                                                                                                                                                                       | Overview      of Compensation Arrangements for Preston D. Swafford Effective as of      October 27, 2009                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.38†                                                                                                                                                                                                                                                                                                                                                       | First      Deferral Agreement Between TVA and Tom D. Kilgore Dated as of March 29,      2005 (Incorporated by reference to Exhibit 10.24 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2006, File No.      000-52313)        |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.39†                                                                                                                                                                                                                                                                                                                                                       | Second      Deferral Agreement Between TVA and Tom Kilgore Dated as of November 24,      2009                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.40†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and Ashok S. Bhatnagar Dated as of September 28,      2004 (Incorporated by reference to Exhibit 10.21 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2006, File No.      000-52313)      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.41†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and William R. McCollum, Jr., Dated as of May 3,      2007 (Incorporated by reference to Exhibit 10.33 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2007, File No.      000-52313)      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.42†                                                                                                                                                                                                                                                                                                                                                       | First      Deferral Agreement Between TVA and Kimberly S. Greene Dated as of      September 4, 2007 (Incorporated by reference to Exhibit 10.34 to TVA’s      Annual Report on Form 10-K for the year ended September 30, 2007, File No.      000-52313) |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.43†                                                                                                                                                                                                                                                                                                                                                       | Second      Deferral Agreement Between TVA and Kimberly S. Greene Dated as of December      20, 2008                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.44†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and Preston D. Swafford Dated as of May 10,      2006                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 14                                                                                                                                                                                                                                                                                                                                                                 | Disclosure      and Financial Ethics Code (Incorporated by reference to Exhibit 14 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                              |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 31.1                                                                                                                                                                                                                                                                                                                                                               | Rule      13a-14(a)/15d-14(a) Certification Executed by the Chief Executive      Officer                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 31.2                                                                                                                                                                                                                                                                                                                                                               | Rule      13a-14(a)/15d-14(a) Certification Executed by the Chief Financial      Officer                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 32.1                                                                                                                                                                                                                                                                                                                                                               | Section      1350 Certification Executed by the Chief Executive  Officer                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 32.2                                                                                                                                                                                                                                                                                                                                                               | Section      1350 Certification Executed by the Chief Financial  Officer                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 99.1                                                                                                                                                                                                                                                                                                                                                               | Materials      Used in Mr. Kilgore’s November 19, 2009 Presentation to the  TVA      Board                                                                                                                                                     |
|  †      Management contract or compensatory arrangement. *      Certain schedule(s) and/or exhibit(s) have been omitted.  The      Tennessee Valley Authority hereby undertakes to furnish supplementally      copies of any of the omitted schedules and/or exhibits upon request by the      Securities and Exchange Commission.  |

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Table of Contents

SIGNATURES

| Date:  November      25, 2009 |   | TENNESSEE      VALLEY AUTHORITY            |
|-----------------------------------------|--------|--------------------------------------------|
|                                    |   | (Registrant)                               |
|                                    |   |                                       |
|                                    |   |                                       |
|                                    | By:    |  /s/      Tom D. Kilgore              |
|                                    |   | Tom      D. Kilgore                        |
|                                    |   | President      and Chief Executive Officer |

| Signature                               | Title                                           | Date                   |
|-----------------------------------------|-------------------------------------------------|------------------------|
|                                    |                                            |                   |
|                                    |                                            |                   |
|  /s/      Tom D. Kilgore      | President      and Chief Executive Officer      | November      25, 2009 |
| Tom      D. Kilgore                     | (Principal      Executive Officer)              |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
|  /s/      Kimberly S. Greene  | Chief      Financial Officer and Executive Vice | November      25, 2009 |
| Kimberly      S. Greene                 | President,      Financial Services              |                   |
|                                    | (Principal      Financial Officer)              |                   |
|                                    |                                            |                   |
|  /s/      Steve Byone         | Vice      President and Controller              | November      25, 2009 |
| Steve      Byone                        | (Principal      Accounting Officer)             |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      Robert M. Duncan               | Chairman      and Director                      | November      25, 2009 |
| Robert      M. Duncan                   |                                            |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      Dennis C. Bottorff             | Director                                        | November      25, 2009 |
| Dennis      C. Bottorff                 |                                            |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      Thomas C. Gilliland            | Director                                        | November      25, 2009 |
| Thomas      C. Gilliland                |                                            |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      Bishop William H. Graves       | Director                                        | November      25, 2009 |
| Bishop      William H. Graves           |                                            |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      Howard A. Thrailkill           | Director                                        | November      25, 2009 |
| Howard      A. Thrailkill               |                                            |                   |
|                                    |                                            |                   |
|                                    |                                            |                   |
| /s/      William B. Sansom              | Director                                        | November      25, 2009 |
| William      B. Sansom                  |                                            |                   |
|                                    |                                            |                   |

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Table of Contents

EXHIBIT INDEX

| Exhibit  No.  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  3.1                    | Tennessee      Valley Authority Act of 1933, as amended, 16 U.S.C.      §§ 831-831ee (Incorporated by reference to Exhibit 3.1 to TVA’s      Quarterly Report on Form 10-Q for the quarter ended December 31, 2007,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2                          | Bylaws      of Tennessee Valley Authority Adopted by the TVA Board of Directors on May      18, 2006, as Amended on April 3, 2008, and May 19, 2008 (Incorporated by      reference to Exhibit 3.1 to TVA’s Quarterly Report on Form 10-Q for the      quarter ended June 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1                          | Basic      Tennessee Valley Authority Power Bond Resolution Adopted by the TVA Board      of Directors on October 6, 1960, as Amended on September 28, 1976, October      17, 1989, and March 25, 1992 (Incorporated by reference to Exhibit 4.1 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1*                        | Fall      Maturity Credit Agreement Dated as of March 26, 2009, Among TVA, Bank of      America, N.A., as Administrative Agent, Bank of America, N.A., as a      Lender, and the Other Lenders Party Thereto (Incorporated by reference to      Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2*                        | Spring      Maturity Credit Agreement Dated as of March 26, 2009, Among TVA, Bank of      America, N.A., as Administrative Agent, Bank of America, N.A., as a      Lender, and the Other Lenders Party Thereto (Incorporated by reference to      Exhibit 10.2 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3*                        | Amendment      Dated as of May 13, 2009, to Spring Maturity Credit Agreement Dated as of      March 26, 2009, Among TVA, Bank of America, N.A., as Administrative Agent,      Bank of America, N.A., as a Lender, and the Other Lenders Party Thereto      (Incorporated by reference to Exhibit 99.1 to TVA’s Current Report on Form      8-K filed on May 15, 2009, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4*                        | Amendment      Dated as of November 9, 2009, to Fall Maturity Credit Agreement Dated as      of March 26, 2009, Among TVA, Bank of America, N.A., as Administrative      Agent, Bank of America, N.A., as a Lender, and the Other Lenders Party      Thereto (Incorporated by reference to Exhibit 99.1 to TVA’s Current Report      on Form 8-K filed on November 13, 2009, File No.  000-52313)                                                                                                                                                                                                                                                                                                                               |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5                         | TVA      Discount Notes Selling Group Agreement (Incorporated by reference to      Exhibit 10.2 to TVA’s Quarterly Report on Form 10-Q for the quarter ended      June 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6                         | Electronotes®      Selling Agent Agreement Dated as of June 1, 2006, Among TVA, LaSalle      Financial Services, Inc., A.G. Edwards & Sons, Inc., Citigroup Global      Markets Inc., Edward D. Jones & Co., L.P., First Tennessee Bank      National Association, J.J.B. Hilliard, W.L. Lyons, Inc., Merrill Lynch,      Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.      Incorporated, and Wachovia Securities, LLC (Incorporated by reference to      Exhibit 10.4 to TVA’s Annual Report on Form 10-K for the year ended      September 30, 2006, File No. 000-52313)                                                                                                                    |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.7                         | Assumption      Agreement Between TVA and Incapital LLC Dated as of February 29, 2008,      Relating to the electronotes® Selling Agent Agreement Dated as of      June 1, 2006, Among TVA, LaSalle Financial Services, Inc., A.G.      Edwards & Sons, Inc., Citigroup Global Markets Inc., Edward D. Jones      & Co., L.P., First Tennessee Bank National Association, J.J.B.      Hilliard, W.L. Lyons, Inc., Merrill Lynch, Pierce, Fenner & Smith      Incorporated, Morgan Stanley & Co. Incorporated, and Wachovia      Securities, LLC (Incorporated by reference to Exhibit 10.1 to TVA’s      Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File      No. 000-52313) |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.8                         | Commitment      Agreement Among Memphis Light, Gas and Water Division, the City of      Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by      reference to Exhibit 10.5 to TVA’s Annual Report on Form 10-K for the year      ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.9                         | Power      Contract Supplement No. 95 Among Memphis Light, Gas and Water Division,      the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003      (Incorporated by reference to Exhibit 10.6 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2006, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.10                        | Void      Walk Away Agreement Among Memphis Light, Gas and Water Division, the City      of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated      by reference to Exhibit 10.7 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.11                        | Power      Contract Supplement No. 96 Among Memphis Light, Gas and Water Division,      the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003      (Incorporated by reference to Exhibit 10.8 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2006, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.12*                       | Joint      Ownership Agreement Dated as of April 30, 2008, Between Seven States Power      Corporation and TVA (Incorporated by reference to Exhibit 10.3 to TVA’s      Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File      No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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Table of Contents

| 10.13        | Supplement      No. 1 Dated as of September 2, 2008, to the Joint Ownership Agreement      Dated as of April 30, 2008, Between Seven States Power Corporation and TVA      (Incorporated by reference to Exhibit 10.16 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.14        | Supplement      No. 2 Dated as of September 30, 2008, to the Joint Ownership Agreement      Dated as of April 30, 2008, Between Seven States Power Corporation and TVA      (Incorporated by reference to Exhibit 10.17 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.15        | Supplement      No. 3 Dated as of April 17, 2009, to the Joint Ownership Agreement Dated      as of April 30, 2008, Between Seven States Power Corporation and      TVA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.16        | Lease      Agreement Dated as of September 30, 2008, Between TVA and Seven States      Southaven, LLC (Incorporated by reference to Exhibit 10.18 to TVA’s Annual      Report on Form 10-K for the year ended September 30, 2008, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.17        | First      Amendment Dated as of April 17, 2009, to Lease Agreement Dated September      30, 2008, Between TVA and Seven States Southaven, LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.18*       | Buy-Back      Arrangements Dated as of September 30, 2008, Among TVA, JPMorgan Chase      Bank, National Association, as Administrative Agent, Lead Arranger, and a      Lender, and the Other Lenders Referred to Therein (Incorporated by      reference to Exhibit 10.19 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2008, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.19        | Overview      of TVA’s September 26, 2003, Lease and Leaseback of Control, Monitoring,      and Data Analysis Network with Respect to TVA’s Transmission System in      Tennessee, Kentucky, Georgia, and Mississippi (Incorporated by reference      to Exhibit 10.9 to TVA’s Annual Report on Form 10-K for the year ended      September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.20*       | Participation      Agreement Dated as of September 22, 2003, Among (1) TVA, (2) NVG Network I      Statutory Trust, (3) Wells Fargo Delaware Trust Company, Not in Its      Individual Capacity, Except to the Extent Expressly Provided in the      Participation Agreement, But as Owner Trustee, (4) Wachovia Mortgage      Corporation, (5) Wilmington Trust Company, Not in Its Individual Capacity,      Except to the Extent Expressly Provided in the Participation Agreement,      But as Lease Indenture Trustee, and (6) Wilmington Trust Company, Not in      Its Individual Capacity, Except to the Extent Expressly Provided in the      Participation Agreement, But as Pass Through Trustee (Incorporated by      reference to Exhibit 10.10 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313) |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.21*       | Network      Lease Agreement Dated as of September 26, 2003, Between NVG Network I      Statutory Trust, as Owner Lessor, and TVA, as Lessee (Incorporated by      reference to Exhibit 10.11 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.22*       | Head      Lease Agreement Dated as of September 26, 2003, Between TVA, as Head      Lessor, and NVG Network I Statutory Trust, as Head Lessee (Incorporated by      reference to Exhibit 10.12 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.23*       | Leasehold      Security Agreement Dated as of September 26, 2003, Made by NVG Network I      Statutory Trust to TVA (Incorporated by reference to Exhibit 10.13 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.24† | TVA      Compensation Plan Approved by the TVA Board on May 31, 2007 (Incorporated      by reference to Exhibit 99.3 to TVA’s Current Report on Form 8-K filed on      December 11, 2007, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.25† | TVA      Vehicle Allowance Guidelines, Effective April 1, 2006 (Incorporated by      reference to Exhibit 10.18 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2007, File No. 000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.26† | Supplemental      Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.27† | Executive      Annual Incentive Plan (Incorporated by reference to Exhibit 10.3 to TVA’s      Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.28† | Executive      Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.4 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.29† | Long-Term      Deferred Compensation Plan (Incorporated by reference to Exhibit 10.5 to      TVA’s Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.30† | Deferred      Compensation Plan (Incorporated by reference to Exhibit 10.2 to TVA’s      Current Report on Form 8-K filed on January 6, 2009, File No.      000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.31† | Overview      of Financial Counseling Services Program                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.32† | Offer      Letter to Tom D. Kilgore Accepted as of January 19, 2005 (Incorporated by      reference to Exhibit 10.19 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2006, File No.  000-52313)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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Table of Contents

|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.33†                                                                                                                                                                                                                                                                                                                                                       | Offer      Letter to William R. McCollum, Jr., Accepted as of March 9, 2007      (Incorporated by reference to Exhibit 10.26 to TVA’s Annual Report on Form      10-K for the year ended September 30, 2007, File No.      000-52313)                    |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.34†                                                                                                                                                                                                                                                                                                                                                       | Offer      Letter to Kimberly S. Greene Accepted as of August 3, 2007 (Incorporated      by reference to Exhibit 10.27 to TVA’s Annual Report on Form 10-K for the      year ended September 30, 2007, File No. 000-52313)                               |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.35†                                                                                                                                                                                                                                                                                                                                                       | Compensation      Arrangements for Preston D. Swafford Effective as of February 5,      2009                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.36†                                                                                                                                                                                                                                                                                                                                                       | Overview      of Compensation Arrangements for Preston D. Swafford Effective as of July      1, 2009                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.37†                                                                                                                                                                                                                                                                                                                                                       | Overview      of Compensation Arrangements for Preston D. Swafford Effective as of      October 27, 2009                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.38†                                                                                                                                                                                                                                                                                                                                                       | First      Deferral Agreement Between TVA and Tom D. Kilgore Dated as of March 29,      2005 (Incorporated by reference to Exhibit 10.24 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2006, File No.      000-52313)        |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.39†                                                                                                                                                                                                                                                                                                                                                       | Second      Deferral Agreement  Between TVA and Tom Kilgore Dated as of      November 24, 2009                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.40†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and Ashok S. Bhatnagar Dated as of September 28,      2004 (Incorporated by reference to Exhibit 10.21 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2006, File No.      000-52313)      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.41†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and William R. McCollum, Jr., Dated as of May 3,      2007 (Incorporated by reference to Exhibit 10.33 to TVA’s Annual Report on      Form 10-K for the year ended September 30, 2007, File No.      000-52313)      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.42†                                                                                                                                                                                                                                                                                                                                                       | First      Deferral Agreement Between TVA and Kimberly S. Greene Dated as of      September 4, 2007 (Incorporated by reference to Exhibit 10.34 to TVA’s      Annual Report on Form 10-K for the year ended September 30, 2007, File No.      000-52313) |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.43†                                                                                                                                                                                                                                                                                                                                                       | Second      Deferral Agreement Between TVA and Kimberly S. Greene Dated as of December      20, 2008                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 10.44†                                                                                                                                                                                                                                                                                                                                                       | Deferral      Agreement Between TVA and Preston D. Swafford Dated as of May 10,      2006                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 14                                                                                                                                                                                                                                                                                                                                                                 | Disclosure      and Financial Ethics Code (Incorporated by reference to Exhibit 14 to      TVA’s Annual Report on Form 10-K for the year ended September 30, 2006,      File No. 000-52313)                                                              |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 31.1                                                                                                                                                                                                                                                                                                                                                               | Rule      13a-14(a)/15d-14(a) Certification Executed by the Chief Executive      Officer                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 31.2                                                                                                                                                                                                                                                                                                                                                               | Rule      13a-14(a)/15d-14(a) Certification Executed by the Chief Financial      Officer                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 32.1                                                                                                                                                                                                                                                                                                                                                               | Section      1350 Certification Executed by the Chief Executive  Officer                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 32.2                                                                                                                                                                                                                                                                                                                                                               | Section      1350 Certification Executed by the Chief Financial  Officer                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                           |
| 99.1                                                                                                                                                                                                                                                                                                                                                               | Materials      Used in Mr. Kilgore’s November 19, 2009 Presentation to the TVA      Board                                                                                                                                                                |
|  †      Management contract or compensatory arrangement. *      Certain schedule(s) and/or exhibit(s) have been omitted.  The      Tennessee Valley Authority hereby undertakes to furnish supplementally      copies of any of the omitted schedules and/or exhibits upon request by the      Securities and Exchange Commission.  |

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