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TENNESSEE VALLEY AUTHORITY EXECUTIVE LONG-TERM INCENTIVE PLAN
 Note About This Exhibit
10.17




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TENNESSEE VALLEY AUTHORITY
EXECUTIVE LONG-TERM INCENTIVE PLAN
 PURPOSE
  EFFECTIVE DATE
  PARTICIPATION
  PERFORMANCE CYCLE
    Performance Cycle
    

FY 1999
    

FY 2000
    

FY 2001
    
    FY 2002
    
    FY 20031 - FY99
    
    
    
    
    
    
    
    
    
    
    
    
    
    $2-FY00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $3 - FY01
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
 PERFORMANCE GOALS AND MEASURES




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AWARD OPPORTUNITY
  plus
   Long-Term Award Opportunity Target Guideline
 Award Opportunity Target MaximumPosition
    
    (Percentage of Base Compensation)President & COO / Chief Officers /
General Counsel
    
    
    15%  30
    %Executive VP
    
    
    10%  25
    %Senior VP / Vice President
    
    
    5%  15
    %Other Participants
    
    
    5%  10
    %
  LTIP PHASE-IN
  Length of
    
    MaximumPerformance Cycle
    
    Performance Cycle
    
    Target Opportunity
    
    Award PaymentFY 1999 Phase-in
    
    one year
    
    
    10
    %
    
    1st quarter FY 2000FY 2000 Phase-in
    
    one year
    
    
    15
    %
    
    1st quarter FY 2001
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AWARD DETERMINATION
  AWARD ELIGIBILITY
     AWARD PAYMENTS
   DEFERRED OPTION
  
    
    Deferral election must be made prior to the beginning of the performance cycle.
    
    The election must be made in 25% increments of the actual
award and is irrevocable.
 PLAN ADMINISTRATIONThe Board of Directors have final approval of all Plan participants, performance goals and
measures, award opportunity targets, and award payments.The Executive Compensation Review Committee will review and recommend participants and
award opportunity targets.The Plan will be administered by the Senior Vice President, Human Resources.The Senior Vice President, Human Resources will be responsible for:
 
    
    Establishing the process for goal setting, performance measurement, reporting
progress toward goals, performance achievement, and award determination.
    
    Developing and implementing a transition plan.
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
    
    Developing additional procedures as necessary to implement the Executive
Long-Term Incentive Plan.
  TERMINATION OR AMENDMENT OF THE PLAN
  DEFINITION OF TERMS
 Award Opportunity Target
    
    Award opportunity expressed as a percent of the
participants base compensation at the beginning of a
performance cycle.Base Compensation
    
    Salary plusDeferred Compensation (i.e. annual
MISRIP excluding any contributions received as part of a
deferred option and /or Long-term Deferred, if
applicable).Deferred Compensation
    
    Compensation that is deferred and paid at a future date.Especially Critical
    
    A position designated by the Board of Directors as one
which has the ability to significantly impact the financial,
and/or operational objectives critical to TVAs overall
success.Executives
    
    Officers or other high level Managers and
Specialists responsible for establishing business vision,
strategic direction and policy, or whose decisions have major
impact on TVA or operations of business units. Incumbents
report to the Board of Directors, head of an organization (CAO,
COO, CFO, GC) or head of a major organizational unit (CNO,
TPS, CS&M, etc). Positions of like size in the relevant
labor market are generally titled President, Chief Officer,
Vice President, Senior Executive (or similar titles), or
receive total compensation at a level that makes participation
in the Executive Compensation Plan appropriate, Employees in
the Officer / Executive pay band are executives. Designation
of Executives is approved by the Board of Directors.Executive Compensation
Review Committee
    
    A Committee established by the
Board of Directors of TVA to provide additional oversight of executive compensation.Normal Retirement
    
    Retirement at age 62 or older.Participant
    
    Employee designated by the Board of Directors to be
eligible to receive an award under the Executive
Long-Term Incentive Plan.Performance Cycle
    
    In accordance with the ELTIP, a three-year period of
time during which performance is measured for the purpose
of awarding incentives.Performance Goal(s)
    
    The long-term strategic goal(s) against which
performance will be measured.
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Performance Measures
    
    The specific business indicator where
performance will be measured against
the performance goal(s).Prorated Award
    
    Method used to determine the award amount for
an employee not eligible to receive a
full award. For purposes of the ELTIP,
pro-ration is based on the number of months an executive has participated in a
given performance cycle divided by 36.
Any partial month is considered a full month.Total Annual Compensation
    
    Term used by TVA that includes Base
Compensation plusAnnual incentive.Total Direct Compensation
    
    Term used by TVA that includes Base
Compensation plusAnnual Incentive plus
Long-Term Incentive.Variable Annual Compensation
    
    Compensation that varies from year to year
(or performance cycle to performance
cycle) based on level of
achievement (performance).
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