Exhibit
      10.33


**DEFERRAL
      AGREEMENT**


**William
      R. McCollum, Jr.**








The
      TVA
      Board of Directors has approved your participation in TVA’s Long-Term Deferred
      Compensation Plan (Plan) under the following terms:





Vesting
                Date(s)
            Vesting
                AmountDuration
                of deferral agreement:
            4
                years and 5 monthsFirst
                compensation credit:
            $350,000
                (05/01/2007)
            
            05/01/2007
            $350,000Second
                compensation credit:
            $200,000
                (10/01/2007)
            
            09/30/2011
            Balance
                of accountThird
                compensation credit:
            $200,000
                (10/01/2008)
            
            09/30/2011
            Balance
                of accountFourth
                compensation credit:
            $200,000
                (10/01/2009)
            
            09/30/2011
            Balance
                of accountFifth
                and final compensation credit:
            $200,000
                (10/01/2010)
            
            09/30/2011
            Balance
                of accountTotal
                credits over deferral period:
            $1,150,000Expiration
                date:
            09/30/2011





Please
      read the following provisions carefully and indicate your approval by signing
      at
      the designated place below.


________________________________________________________________________________





As
      a
      participant in the Plan, I hereby agree to be bound by the following terms
      and
      conditions:





Annual
      deferred compensation credits as stated above will be made to an account in
      my
      name to cover a service period of 4 years and 5 months, beginning on May 1,
      2007, and ending on September 30, 2011, provided that I remain employed by
      TVA
      through September 30, 2011.  I shall be entitled to compensation
      credits including interest and returns on the vesting dates as stated in the
      above schedule provided that I remain employed by TVA through the vesting
      periods.  The first credit shall be made directly to an account in
      TVA’s Merit Incentive Supplemental Retirement Income Plan (MISRIP) and will be
      paid out to me, upon termination of my employment with TVA, in five annual
      installments or in accordance with otherwise applicable IRS
      rules.  Upon expiration of this agreement, the balance of the account,
      including interest and return as provided below, will be transferred to my
      TVA
      deferred compensation account and all credits from this agreement will be paid
      out to me, upon termination of my employment with TVA, in five annual
      installments or in accordance with otherwise applicable IRS rules.





I
      understand that I must be an employee of TVA at the time of the vesting dates
      stated above or no payments or transfers under the Plan will be made by TVA
      and
      any credits to my account will be extinguished.  However, in the event
      that TVA terminates my employment during the term of this agreement through
      no
      act or delinquency of my own, this agreement is terminated as of the date of
      my
      termination and no further credits will be made under it and any credits in
      my
      account from this agreement, including interest or return as provided below,
      at
      the time of termination will become vested.  The balance of my account
      will be transferred to my TVA MISRIP account and all credits from this agreement
      will be paid out to me in five annual installments or in accordance with
      otherwise applicable IRS rules.  If TVA terminates my employment for
      cause prior to the expiration of this agreement, no further credits will be
      made
      and my unvested account balance will be forfeited.  In the event of my
      death during the term of this agreement, my account balance will be paid to
      the
      person identified on my beneficiary designation form or, in the absence of
      such
      designation, to my estate, in a manner permitted by applicable IRS
      rules.





Interest
      will be credited to the balance reflected in my deferral account on the same
      basis as interest is calculated and credited under MISRIP.  In the
      alternative, I may choose to have my balance adjusted based on the return of
      the
      funds I select under the same conditions as are contained in
      MISRIP.  I understand that I am solely responsible for the risk
      associated with any return elections that I make.





I
      understand that nothing contained in this agreement shall be construed as
      conferring the right to continue in the employment of TVA as an executive or
      in
      any other capacity and that the payment election I have made is final (not
      revocable).











/s/  William
      R. McCollum,
      Jr.                                                      4/30/07


William
      R. McCollum,
      Jr.                                                             Date








/s/   John
      E. Long, Jr.                                                    
 5/3/07


Chief
      Officer                                                                                      
 Date