Exhibit 10.14**Description of Compensation of TVA’s Directors and Named Executive Officers****Compensation of Directors**In accordance with the Consolidated Appropriations Act, 2005, each director receives a stipend of$45,000 per year, or in the case of the chairman of any TVA Board committee, $46,000 per year, or,in the case of the chairman of the TVA Board, $50,000 per year. Directors are also reimbursed fortravel, lodging, and related expenses they incur in attending meetings, in the same manner aspersons employed intermittently in federal government service under Section 5703 of Title 5 of theUnited States Code.**Compensation of Named Executive Officers*****Base Compensation***Set forth below is the current 2007 salary and additional annual compensation for the ChiefExecutive Officer (“CEO”) and the other executive officers of TVA appearing in the SummaryCompensation Table of the Annual Report on Form 10-K (“Annual Report”) to which this exhibitrelates:               **Additional**      **Annual**  **Salary****1** **Compensation****1****Name** **($)** **($)**Tom D. Kilgore $140,00  $510,000 Karl W. Singer $140,00  $340,000 Ashok S. Bhatnagar $140,00  $275,000 Joseph R. Bynum $140,00  $274,000  1 Represents approved salary and additional annualcompensation as of December 15, 2006.***The Executive Annual Incentive Plan***The Executive Annual Incentive Plan (“EAIP”) is designed to encourage and reward participants fortheir contribution to the successful achievement of short-term financial and operational goals.The EAIP provides a variable performance-based element of total annual compensation forparticipants.EAIP incentive opportunities (represented as a percentage of each participant’s base compensation)are established for each position based on opportunities provided for comparable positions in theenergy services industry. Base compensation consists of salary plus additional annualcompensation. Actual incentive awards are tied to the achievement of a combination of predefinedTVA and business unit performance goals established each fiscal year as identified in TVA’s WinningPerformance Balanced Scorecards (“Scorecards”).
 

 
The TVA-level Scorecard performance measures established and approved by the TVA Board for 2007consist of the following: 1. Delivered Cost of Power Excluding Fuel Cost Adjustment (“FCA”) Costs  2. FCA Costs  3. Productivity  4. Connection Point Interruptions  5. Customer Satisfaction Survey  6. Economic Development  7. Equivalent Availability Factor  8. Environment Impact  9. Safe WorkplaceScorecard performance measures have not yet been established for 2007 for each of the appropriatebusiness units.The TVA-level Scorecard will represent 30 percent of the potential payout for the CEO and the otherexecutive officers appearing in the Summary Compensation Table of the Annual Report. The remaining70 percent will be tied to the performance of their appropriate business units.EAIP incentive opportunities in 2007 for the CEO and the other executive officers of TVA appearingin the Summary Compensation Table of the Annual Report are as follows:       **Incentive****Name** **Opportunity****1**Tom D. Kilgore  0 - 70%Karl W. Singer  0 - 70%Ashok S. Bhatnagar  0 - 60%Joseph R. Bynum  0 - 55% 1 Represents a percentage of eachparticipant’s base compensation.***The Executive Long-Term Incentive Plan***The Executive Long-Term Incentive Plan (“ELTIP”) is designed to provide participants an equitableand competitive level of incentive compensation based on successfully achieving establishedfinancial and operational goals measured over a multi-year period. Designated executives aretypically those in critical positions who make decisions that impact TVA’s long-term strategicobjectives.Performance measures and goals established under the ELTIP focus on the achievement of TVA’slong-term financial and operational goals. Performance measures and goals for the performancecycle ending in 2007 have not yet been established.Incentive opportunities (represented as a percentage of each participant’s base compensation) areestablished for each position based on opportunities provided for comparable positions in theenergy services industry. Actual incentive awards are tied to the achievement of predefinedcorporate performance goal(s). At the end of the performance cycle, performance will be measuredagainst the target(s) resulting in a percentage ranging from 0 percent to 125 percent.
 

 
A minimum level of “threshold” performance (75 percent of target) must be achieved in order for anypayout to occur. Awards may not exceed 125 percent of an executive’s incentive opportunity.Actual awards will be determined by multiplying the executive’s incentive opportunity, expressed asa percentage of the executive’s base compensation, by the actual level of performance achieved.ELTIP incentive awards are paid in cash with a deferral option.Incentive opportunities and estimated payouts in 2007 for the CEO and the other executive officersof TVA appearing in the Summary Compensation Table of the Annual Report are as follows:                       **Estimated Future Payouts in 2007**  **Incentive** **Threshold** **Target** **Maximum****Name** **Opportunity****1** **($)** **($)** **($)**Tom D. Kilgore  0 - 60% $292,500  $390,000  $487,500 Karl W. Singer  0 - 60% $216,000  $288,000  $360,000 Ashok S. Bhatnagar  0 - 45% $140,063  $186,750  $233,438 Joseph R. Bynum  0 - 40% $124,200  $165,600  $207,000  1 Represents a percentage of each participant’s base compensation.***TVA’s Vehicle Allowance Program***TVA’s Vehicle Allowance Program is designed to provide an adequate and cost effective way toreimburse officers and key managers whose job responsibilities require extensive business relatedtravel. TVA provides a flat-dollar bi-weekly allowance to be used toward the purchase or lease ofa vehicle and operating fees, maintenance, repairs, accidents, and insurance. This bi-weeklyallowance is a taxable benefit and is subject to withholding and any other applicable taxes.Participation is limited to officers and key managers who meet one or more of the followingeligibility requirements: **•** Engage in extensive business-related travel during the year (13,000 miles or more)  **•** Serve in a position that is subject to frequent call-out (24 hours a day, 7 days a week)  **•** As otherwise approved by the CEO.Vehicle allowances are granted on a “business need” basis and must be approved by the CEO (foremployees other than the CEO and employees who report directly to the CEO).