# EDGAR Filing Document

**Accession Number:** 0001376986
**File Stem:** 0001376986-26-000029
**Filing Date:** 2026-5
**Character Count:** 323854
**Document Hash:** b6b22b6351e24768e2e8fe2b9f5e9ee1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001376986-26-000029.hdr.sgml**: 20260505

**ACCESSION NUMBER**: 0001376986-26-000029

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 111

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260505

**DATE AS OF CHANGE**: 20260504

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Tennessee Valley Authority
- **CENTRAL INDEX KEY:** 0001376986
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC SERVICES [4911]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 620474417
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-52313
- **FILM NUMBER:** 26939387

**BUSINESS ADDRESS:**
- **STREET 1:** 400 WEST SUMMIT HILL DRIVE
- **CITY:** KNOXVILLE
- **STATE:** TN
- **ZIP:** 37902
- **BUSINESS PHONE:** 865-632-2101

**MAIL ADDRESS:**
- **STREET 1:** 400 WEST SUMMIT HILL DRIVE
- **CITY:** KNOXVILLE
- **STATE:** TN
- **ZIP:** 37902

?xml version='1.0' encoding='ASCII'? tve-20260331

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(MARK ONE)

⌧ QUARTERLY REPORT PURSUANT TO SECTION 13, 15(d), OR 37 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

OR

□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 000-52313

![TVA_Logo_RGB_Blue.jpg](tve-20260331_g1.jpg)

**TENNESSEE VALLEY AUTHORITY**

*(Exact name of registrant as specified in its charter)*

---

| | |
|:---|:---|

| 400 W. Summit Hill Drive<br>Knoxville, Tennessee<br> *(Address of principal executive offices)* | 37902<br> *(Zip Code)* |

---

(865) 632-2101

*(Registrant's telephone number, including area code)*

None

*(Former name, former address and former fiscal year, if changed since last report)*

Securities registered pursuant to Section 12(b) of the Act

Title of each class Trading Symbol(s) Name of each exchange on which registered <br> <u>N/A</u> <u>N/A</u> <u>N/A</u>

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13, 15(d), or 37 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer □&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accelerated filer □

Non-accelerated filer&nbsp;&nbsp;&nbsp;&nbsp;⌧ Smaller reporting company □&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Emerging growth company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes □ No ⌧

Number of shares of common stock outstanding at May 4, 2026: N/A

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | |
|:---|:---|
| **Table of Contents** | **Table of Contents** |
| | <u>Page</u> |
| &nbsp;&nbsp;[GLOSSARY OF COMMON ACRONYMS](#i2c5964761a95480aaf5fa85443ba05b6_13)...................................................................................................................................... | [3](#i2c5964761a95480aaf5fa85443ba05b6_13) |
| &nbsp;&nbsp;[FORWARD-LOOKING INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_16)......................................................................................................................................... | [4](#i2c5964761a95480aaf5fa85443ba05b6_16) |
| &nbsp;&nbsp;[GENERAL INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_19)............................................................................................................................................................ | [6](#i2c5964761a95480aaf5fa85443ba05b6_19) |
| [PART I - FINANCIAL INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_22)  | [PART I - FINANCIAL INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_22)  |
| &nbsp;&nbsp;[ITEM 1. FINANCIAL STATEMENTS](#i2c5964761a95480aaf5fa85443ba05b6_25)............................................................................................................................................. | [7](#i2c5964761a95480aaf5fa85443ba05b6_25) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets (Unaudited)...........................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_34) | [7](#i2c5964761a95480aaf5fa85443ba05b6_34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations (Unaudited)............................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_28) | [9](#i2c5964761a95480aaf5fa85443ba05b6_28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Consolidated Statements of Comprehensive Income (Loss) (Unaudited)............................................................................](#i2c5964761a95480aaf5fa85443ba05b6_31) | [9](#i2c5964761a95480aaf5fa85443ba05b6_31) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows (Unaudited)..........................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_37) | [10](#i2c5964761a95480aaf5fa85443ba05b6_37) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Proprietary Capital (Unaudited)............................................................................](#i2c5964761a95480aaf5fa85443ba05b6_40) | [11](#i2c5964761a95480aaf5fa85443ba05b6_40) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements (Unaudited)....................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_46) | [12](#i2c5964761a95480aaf5fa85443ba05b6_46) |
| &nbsp;&nbsp;[ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...](#i2c5964761a95480aaf5fa85443ba05b6_133) | [45](#i2c5964761a95480aaf5fa85443ba05b6_133) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Executive Overview](#i2c5964761a95480aaf5fa85443ba05b6_136)............................................................................................................................................................... | [45](#i2c5964761a95480aaf5fa85443ba05b6_136) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Results of Operations](#i2c5964761a95480aaf5fa85443ba05b6_139)............................................................................................................................................................ | [46](#i2c5964761a95480aaf5fa85443ba05b6_139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Liquidity and Capital Resources](#i2c5964761a95480aaf5fa85443ba05b6_142)............................................................................................................................................ | [53](#i2c5964761a95480aaf5fa85443ba05b6_142) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Key Initiatives and Challenges..............................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_145) | [56](#i2c5964761a95480aaf5fa85443ba05b6_145) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Environmental Matters..........................................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_148) | [58](#i2c5964761a95480aaf5fa85443ba05b6_148) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Legal Proceedings................................................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_151) | [58](#i2c5964761a95480aaf5fa85443ba05b6_151) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Critical Accounting Estimates](#i2c5964761a95480aaf5fa85443ba05b6_157)................................................................................................................................................ | [59](#i2c5964761a95480aaf5fa85443ba05b6_157) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[New Accounting Standards and Interpretations](#i2c5964761a95480aaf5fa85443ba05b6_166).................................................................................................................... | [59](#i2c5964761a95480aaf5fa85443ba05b6_166) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Legislative and Regulatory Matters.......................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_160) | [59](#i2c5964761a95480aaf5fa85443ba05b6_160) |
| &nbsp;&nbsp;[ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i2c5964761a95480aaf5fa85443ba05b6_163).............................................................. | [59](#i2c5964761a95480aaf5fa85443ba05b6_163) |
| &nbsp;&nbsp;[ITEM 4. CONTROLS AND PROCEDURES](#i2c5964761a95480aaf5fa85443ba05b6_169).................................................................................................................................. | [59](#i2c5964761a95480aaf5fa85443ba05b6_169) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Disclosure Controls and Procedures.....................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_172) | [59](#i2c5964761a95480aaf5fa85443ba05b6_172) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Changes in Internal Control over Financial Reporting.](#i2c5964761a95480aaf5fa85443ba05b6_175)......................................................................................................... | [60](#i2c5964761a95480aaf5fa85443ba05b6_175) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PART II - OTHER INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_178)  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [PART II - OTHER INFORMATION](#i2c5964761a95480aaf5fa85443ba05b6_178)  |
| &nbsp;&nbsp;[ITEM 1. LEGAL PROCEEDINGS](#i2c5964761a95480aaf5fa85443ba05b6_181).................................................................................................................................................. | [60](#i2c5964761a95480aaf5fa85443ba05b6_181) |
| &nbsp;&nbsp;[ITEM 1A. R](#i2c5964761a95480aaf5fa85443ba05b6_184)ISK FACTORS............................................................................................................................................................ | [60](#i2c5964761a95480aaf5fa85443ba05b6_184) |
| &nbsp;&nbsp;[ITEM 5. OTHER INFORMATION..................................................................................................................................................](#i2c5964761a95480aaf5fa85443ba05b6_187) | [60](#i2c5964761a95480aaf5fa85443ba05b6_187) |
| &nbsp;&nbsp;[ITEM 6. EXHIBITS](#i2c5964761a95480aaf5fa85443ba05b6_190)........................................................................................................................................................................ | [61](#i2c5964761a95480aaf5fa85443ba05b6_190) |
| &nbsp;&nbsp;[SIGNATURES](#i2c5964761a95480aaf5fa85443ba05b6_193)............................................................................................................................................................................... | [62](#i2c5964761a95480aaf5fa85443ba05b6_193) |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | |
|:---|:---|
| **GLOSSARY OF COMMON ACRONYMS** | **GLOSSARY OF COMMON ACRONYMS** |
| Following are definitions of some of the terms or acronyms that may be used in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "Quarterly Report"): | Following are definitions of some of the terms or acronyms that may be used in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "Quarterly Report"): |
| Term or Acronym | Definition |
| 2015 CCR Rule | 2015 Coal Combustion Residuals Rule |
| AOCI | Accumulated other comprehensive income (loss) |
| ARO | Asset retirement obligation |
| ART | Asset Retirement Trust |
| Bonds | Bonds, notes, or other evidences of indebtedness |
| CARA | Corrective Action/Risk Assessment |
| CCR | Coal combustion residuals |
| CEO | Chief Executive Officer |
| CT | Combustion turbine |
| CVA | Credit valuation adjustment |
| CY | Calendar year |
| DCP | Deferred Compensation Plan |
| ELG | Effluent limitation guidelines |
| EPA | Environmental Protection Agency |
| ETP | Enterprise Transformation Program |
| Exchange Act | Securities Exchange Act of 1934 |
| FHP | Financial Hedging Program |
| GAAP | Accounting principles generally accepted in the United States of America |
| GAC | Grid access charge |
| GVH | GE Vernova Hitachi Nuclear Energy |
| Holdco | John Sevier Holdco LLC |
| IRA | Inflation Reduction Act of 2022 |
| JACTG | Johnsonville Aeroderivative Combustion Turbine Generation LLC |
| JHLLC | Johnsonville Holdco LLC |
| Johnsonville Facility | Johnsonville Aeroderivative Combustion Turbine Facility |
| JSCCG | John Sevier Combined Cycle Generation LLC |
| kWh | Kilowatt hours |
| Legacy CCR Rule | Legacy Coal Combustion Residuals Rule |
| LPCs | Local power company customers |
| MLGW | Memphis Light, Gas and Water Division |
| mmBtu | Million British thermal unit(s) |
| Moody's | Moody's Investors Service, Inc. |
| MtM | Mark-to-market |
| NAV | Net asset value |
| NDT | Nuclear Decommissioning Trust |
| NEIL | Nuclear Electric Insurance Limited |
| NES | Nashville Electric Service |
| NRC | Nuclear Regulatory Commission |
| PPA(s) | Power Purchase Agreement(s) |
| RP | Restoration Plan |
| SCCG | Southaven Combined Cycle Generation LLC |
| SEC | Securities and Exchange Commission |
| SERP | Supplemental Executive Retirement Plan |
| SHLLC | Southaven Holdco LLC |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | |
|:---|:---|
| SLR | Subsequent license renewal |
| TDEC | Tennessee Department of Environment and Conservation |
| TVA | Tennessee Valley Authority |
| TVA Act | Tennessee Valley Authority Act of 1933, as amended |
| TVA Board | TVA Board of Directors |
| U.S. | United States |
| U.S. Treasury | United States Department of the Treasury |
| VIE | Variable interest entity |
| XBRL | eXtensible Business Reporting Language |

---

**FORWARD-LOOKING INFORMATION**

This Quarterly Report contains forward-looking statements relating to future events and future performance. All statements other than those that are purely historical may be forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "anticipate," "believe," "intend," "project," "plan," "predict," "assume," "forecast," "estimate," "objective," "possible," "probably," "likely," "potential," "speculate," "aim," "aspiration," "goal," "seek," "strategy," "target," the negative of such words, or other similar expressions.

Although the Tennessee Valley Authority ("TVA") believes that the assumptions underlying any forward-looking statements are reasonable, TVA does not guarantee the accuracy of these statements. Numerous factors could cause actual results to differ materially from those in any forward-looking statements. These factors include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Significant additional costs, regulatory uncertainty, and operational risks associated with TVA's management of coal combustion residuals ("CCR") and compliance with evolving and unpredictable environmental and energy regulations, which could require closure or remediation of facilities; new or changed requirements related to air, water, or transmission; substantive and procedural costs associated with TVA's governmental status; and changes in the retirement dates of assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The impact of existing, anticipated, or new federal or state legislation, regulatory actions, executive orders, or litigation, including legislative actions targeting TVA's business model, potential limits or reductions to TVA's statutory authorities such as exclusive rate-setting, disbursement authority, authority to establish compensation, or control over assets, changes to TVA's debt ceiling, or federal action or inaction in areas such as the national debt ceiling or federal funding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks from failure to attract or retain key personnel, changes in TVA's compensation policies or practices that may result from, among other things, presidential memoranda regarding compensation practices at TVA, changes in senior management or TVA Board of Directors ("TVA Board") membership, or the absence of a TVA Board quorum, which could limit TVA's ability to conduct business or adapt strategy and could increase legal and regulatory risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Legal, administrative, and regulatory proceedings, including those involving CCR facilities, gas plants, and permitting challenges, and other litigation, which could lead to unanticipated costs, operational changes, or modifications to TVA's business or compliance obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks from the loss of TVA's protected service territory if federal action limits existing territorial protections or increases competition, potentially resulting in the loss of customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Significant costs or operational complications from compliance with new or amended reliability standards imposed by industry or federal regulators, including the North American Electric Reliability Corporation ("NERC");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks to TVA's ability to implement its business strategy or achieve cost reduction, efficiency, or innovation goals, including due to technological change, customer or industry transition, macroeconomic uncertainty, or inability of local power company customers ("LPCs") or directly served customers to pay their power bills;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Delays, cost overruns, or inability to complete or gain approval for major projects, including new generation, transmission, or infrastructure, due to regulatory, legal, supply chain, stakeholder, environmental, or other challenges, including opposition from regulators or litigation related to environmental or other permitting requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operational risks from TVA's aging, technologically complex, or interdependent infrastructure, and failures of generation, transmission, flood control, navigation, or related assets, including those resulting from extreme weather, deferred maintenance, or technical malfunctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Specific risks associated with nuclear generation, including but not limited to nuclear incidents, changes in regulatory or insurance regimes, increased decommissioning or operational costs, delays or restrictions in licensing, long-term waste management uncertainties, and dependency on specialized supply chain and technological partners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Physical attacks, threats, terrorism, wars, and geopolitical events targeting critical infrastructure or suppliers, which may disrupt operations or require increased security expenditures, and which could arise from TVA's governmental status or broader geopolitical instability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Events at TVA facilities, which, among other things, could result in loss of life, damage to the environment, damage to or loss of the facility, or damage to the property of others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Events that negatively impact TVA's reliability, including problems at other utilities or at TVA facilities or the increase in intermittent sources of power;

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disruption, delay, or increased cost of fuel, purchased power, critical services, or supplies due to supply chain difficulties, labor shortages, transportation constraints, economic conditions, inflation, tariffs or other trade restrictions, force majeure events, pandemics or health emergencies, third-party cyber incidents, intentional defaults, or contractual performance failures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Global conflicts, terrorist activities, or military actions by the United States ("U.S.") government, its allies, or others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cyber-attacks on TVA's assets or those of third parties, including critical vendors and cloud service providers, which may become more frequent and sophisticated as a result of advances in artificial intelligence ("AI");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• AI and machine learning risks including erroneous or biased AI decision-making, regulatory complexity, compromised data integrity, intellectual property issues, and adoption-pace disadvantages relative to other utilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Volatility in customer demand for electricity, including both unexpected increases (driven by factors such as AI data centers, cryptocurrency mining, electric vehicles, population growth, and new large customer loads) and unexpectedly low demand (driven by economic downturn, efficiency gains, distributed energy resources ("DER") adoption, or the loss of customers), both of which could result in stranded costs, rate actions, curtailments, or a need for unplanned capital or operational adjustments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financial, capital, and liquidity constraints, including limitations imposed by TVA's debt ceiling, increasing costs or reduced availability of capital, the unavailability of funding sources, volatility or downgrades in credit ratings (including as a result of U.S. downgrades), and market liquidity or trading risks affecting TVA's bonds, notes, or other evidences of indebtedness (collectively, "Bonds");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pension, health care, and other employee benefit liabilities and funding risks that may arise due to market conditions, actuarial or demographic changes, regulatory amendments, or shifts in plan assumptions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks due to changes in technology and TVA's ability (or inability) to keep pace with private utilities or customer needs, including potential disadvantages from TVA's governmental status, delays or limits on technology adoption, and necessity for continuous innovation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adverse changes in market prices for electricity, commodities (such as fuel, emissions allowances, and construction materials), liability insurance, and investments, as well as inflationary pressures and changes in interest rates and currency exchange rates, which may, among other things, impact the affordability of electricity and impede TVA's ability to recover costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A limitation on the market for TVA securities, which may be influenced by the fact that the payment of principal and interest on TVA securities is not guaranteed by the U.S. government;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Climate, weather, and catastrophic events (including wildfires, flooding, drought, storms, heat waves, pandemics, and other natural or health crises) that could impair operations, damage facilities, or otherwise require material changes to TVA's generation or business strategies, the frequency and severity of which may increase as a result of climate change and require significant adaptation and investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with the supply or quality of water from the Tennessee or Cumberland River systems, or elsewhere, including droughts, increased usage, or contamination, which may interfere with power generation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Potential failure of internal financial controls, disclosure controls, or information technology systems to prevent or detect fraud, errors, cyberattacks, or data losses, and inability to use regulatory accounting for certain costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inability of TVA to achieve or maintain its cost reduction goals, including pursuant to its Enterprise Transformation Program ("ETP"), which may require TVA to increase rates and/or issue more debt than planned;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Negative impacts to TVA's reputation, which may result from operational failures, litigation, cybersecurity incidents, inability to meet strategic goals, customer relations or contractor actions, or high-profile negative publicity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other unforeseeable events or conditions which could materially impact TVA's business, operations, financial condition, or results of operations.

See also Part I, Item 1A, Risk Factors, and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in TVA's Annual Report on Form 10-K for the year ended September 30, 2025 (the "Annual Report"), and Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A, Risk Factors in this Quarterly Report for a discussion of factors that could cause actual results to differ materially from those in any forward-looking statement. New factors emerge from time to time, and it is not possible for TVA to predict all such factors or to assess the extent to which any factor or combination of factors may impact TVA's business or cause results to differ materially from those contained in any forward-looking statement. TVA undertakes no obligation to update any forward-looking statement to reflect developments that occur after the statement is made, except as required by law.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**GENERAL INFORMATION**

*Fiscal Year*

References to years (2026, 2025, etc.) in this Quarterly Report are to TVA's fiscal years ending September 30. Years that are preceded by "CY" are references to calendar years.

*Notes*

References to "Notes" are to the Notes to Consolidated Financial Statements contained in Part I, Item 1, Financial Statements in this Quarterly Report.

*Available Information*

TVA files annual, quarterly, and current reports with the Securities and Exchange Commission ("SEC") under Section 37 of the Securities Exchange Act of 1934 (the "Exchange Act"). TVA's SEC filings are available to the public at www.tva.com, free of charge, as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. Information contained on or accessible through TVA's website shall not be deemed to be incorporated into, or to be a part of, this Quarterly Report or any other report or document that TVA files with the SEC. All TVA SEC reports are available to the public without charge from the website maintained by the SEC at www.sec.gov.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**PART I - FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED BALANCE SHEETS (Unaudited)**

(in millions)

---

| | | |
|:---|:---|:---|
| **ASSETS** | **ASSETS** | **ASSETS** |
| | **March 31, 2026** | **September 30, 2025** |
| **Current assets** | | |
| Cash and cash equivalents | $501 | $1576 |
| Accounts receivable, net | 1969 | 2119 |
| Inventories, net | 1211 | 1193 |
| Regulatory assets | 455 | 127 |
| Other current assets | 243 | 162 |
| Total current assets | 4379 | 5177 |
| **Property, plant, and equipment** |  |  |
| Completed plant | 71078 | 71574 |
| Less accumulated depreciation | (39152) | (38716) |
| Net completed plant | 31926 | 32858 |
| Construction in progress | 7731 | 6760 |
| Nuclear fuel | 1214 | 1185 |
| Finance leases | 632 | 663 |
| Total property, plant, and equipment, net | 41503 | 41466 |
| **Investment funds** | 5665 | 5573 |
| **Regulatory and other long-term assets** |  |  |
| Regulatory assets | 7850 | 8047 |
| Operating lease assets, net of amortization | 87 | 113 |
| Other long-term assets | 455 | 506 |
| Total regulatory and other long-term assets | 8392 | 8666 |
| **Total assets** | $59939 | $60882 |
| The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED BALANCE SHEETS (Unaudited)**

(in millions)

---

| | | |
|:---|:---|:---|
| **LIABILITIES AND PROPRIETARY CAPITAL** | **LIABILITIES AND PROPRIETARY CAPITAL** | **LIABILITIES AND PROPRIETARY CAPITAL** |
| | **March 31, 2026** | **September 30, 2025** |
| **Current liabilities** | | |
| Accounts payable and accrued liabilities | $2887 | $3299 |
| Accrued interest | 326 | 348 |
| Asset retirement obligations | 343 | 313 |
| Regulatory liabilities | 212 | 228 |
| Short-term debt, net | 1348 |  |
| Current maturities of power bonds | 1020 | 1370 |
| Current maturities of long-term debt of variable interest entities | 50 | 49 |
| Total current liabilities | 6186 | 5607 |
| **Other liabilities** |  |  |
| Post-retirement and post-employment benefit obligations | 2041 | 2183 |
| Asset retirement obligations | 9168 | 10101 |
| Finance lease liabilities | 617 | 640 |
| Other long-term liabilities | 1569 | 1606 |
| Regulatory liabilities | 124 | 141 |
| Total other liabilities | 13519 | 14671 |
| **Long-term debt, net** |  |  |
| Long-term power bonds, net | 19459 | 20461 |
| Long-term debt of variable interest entities, net | 1607 | 1632 |
| Total long-term debt, net | 21066 | 22093 |
| **Total liabilities** | 40771 | 42371 |
| **Commitments and contingencies (Note 21)** |  |  |
| **Proprietary capital** |  |  |
| Power program appropriation investment | 258 | 258 |
| Power program retained earnings | 18455 | 17797 |
| Total power program proprietary capital | 18713 | 18055 |
| Nonpower programs appropriation investment, net | 506 | 510 |
| Accumulated other comprehensive loss | (51) | (54) |
| Total proprietary capital | 19168 | 18511 |
| **Total liabilities and proprietary capital** | $59939 | $60882 |
| The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)**

(in millions)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| | **2026** | **2025** | **2026** | **2025** |
| **Operating revenues** |  |  |  |  |
| Revenue from sales of electricity | $3487 | $3476 | $6488 | $6352 |
| Other revenue | 59 | 56 | 107 | 100 |
| Total operating revenues | 3546 | 3532 | 6595 | 6452 |
| **Operating expenses** |  |  |  |  |
| Fuel | 683 | 580 | 1197 | 1085 |
| Purchased power | 588 | 572 | 998 | 966 |
| Operating and maintenance | 882 | 944 | 1731 | 1849 |
| Depreciation and amortization | 511 | 562 | 1082 | 1119 |
| Tax equivalents | 168 | 158 | 321 | 304 |
| Total operating expenses | 2832 | 2816 | 5329 | 5323 |
| **Operating income** | 714 | 716 | 1266 | 1129 |
| Other income, net | 11 | 12 | 55 | 29 |
| Other net periodic benefit cost | 25 | 27 | 46 | 52 |
| Interest expense | 308 | 293 | 617 | 573 |
| **Net income** | $392 | $408 | $658 | $533 |
| The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. |

---

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)**

(in millions)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| | **2026** | **2025** | **2026** | **2025** |
| Net income | $392 | $408 | $658 | $533 |
| Other comprehensive income (loss) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized (loss) on cash flow hedges | (22) | (4) | (9) | (23) |
| &nbsp;&nbsp;&nbsp;Net unrealized (gain) loss reclassified to earnings from cash flow hedges | 11 | (14) | 12 | 23 |
| Total other comprehensive income (loss) | (11) | (18) | 3 |  |
| **Total comprehensive income** | $381 | $390 | $661 | $533 |
| The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

 **TENNESSEE VALLEY AUTHORITY**

 **CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**

**For the Six Months Ended March 31** 

(in millions)

---

| | | |
|:---|:---|:---|
| | **2026** | **2025** |
| **Cash flows from operating activities** |  |  |
| Net income | $658 | $533 |
| Adjustments to reconcile net income to net cash provided by operating activities |  |  |
| &nbsp;&nbsp;Depreciation and amortization<sup>(1)</sup> | 1094 | 1130 |
| &nbsp;&nbsp;&nbsp;Amortization of nuclear fuel cost | 181 | 139 |
| &nbsp;&nbsp;&nbsp;Non-cash retirement benefit expense | 62 | 74 |
| &nbsp;&nbsp;&nbsp;Other regulatory amortization and deferrals | (321) | (150) |
| Changes in current assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 162 | 91 |
| &nbsp;&nbsp;&nbsp;Inventories and other current assets, net | (57) | (58) |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (253) | 10 |
| &nbsp;&nbsp;&nbsp;Accrued interest | (18) | 53 |
| Pension contributions | (160) | (154) |
| Settlements of asset retirement obligations | (130) | (133) |
| Other, net | (112) | (74) |
| Net cash provided by operating activities | 1106 | 1461 |
| **Cash flows from investing activities** |  |  |
| Construction expenditures | (1996) | (2396) |
| Nuclear fuel expenditures | (223) | (172) |
| Purchases of investments | (4) | (4) |
| Loans and other receivables |  |  |
| &nbsp;&nbsp;&nbsp;Advances | (10) |  |
| &nbsp;&nbsp;&nbsp;Repayments | 2 | 6 |
| Other, net | 112 | (16) |
| Net cash used in investing activities | (2119) | (2582) |
| **Cash flows from financing activities** |  |  |
| Long-term debt |  |  |
| &nbsp;&nbsp;&nbsp;Issues of power bonds |  | 1231 |
| &nbsp;&nbsp;&nbsp;Proceeds from variable interest entities |  | 800 |
| &nbsp;&nbsp;&nbsp;Redemptions and repurchases of power bonds | (1350) | (1) |
| &nbsp;&nbsp;&nbsp;Redemptions of debt of variable interest entities | (24) | (18) |
| Short-term debt issuance (redemptions), net | 1347 | (815) |
| Payments on leases and leasebacks | (37) | (35) |
| Financing costs, net |  | (19) |
| Other, net | 2 | 2 |
| Net cash provided by (used in) financing activities | (62) | 1145 |
| Net change in cash, cash equivalents, and restricted cash | (1075) | 24 |
| Cash, cash equivalents, and restricted cash at beginning of period | 1597 | 523 |
| **Cash, cash equivalents, and restricted cash at end of period** | $522 | $547 |
| <u>Note</u><br>(1) Includes amortization of debt issuance costs and premiums/discounts. | <u>Note</u><br>(1) Includes amortization of debt issuance costs and premiums/discounts. | <u>Note</u><br>(1) Includes amortization of debt issuance costs and premiums/discounts. |
| The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. | The accompanying notes are an integral part of these consolidated financial statements. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (Unaudited)**

**For the Three Months Ended March 31, 2026 and 2025**

(in millions)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Power Program Appropriation Investment** | **<br>Power Program Retained Earnings** | **Nonpower Programs Appropriation Investment, Net** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **<br>Total** |
| **Balance at December 31, 2024** | $258 | $16562 | $516 | $(34) | $17302 |
| Net income (loss) |  | 410 | (2) |  | 408 |
| Total other comprehensive loss |  |  |  | (18) | (18) |
| Return on power program appropriation investment |  | (2) |  |  | (2) |
| **Balance at March 31, 2025** | $258 | $16970 | $514 | $(52) | $17690 |
| **Balance at December 31, 2025** | $258 | $18063 | $508 | $(40) | $18789 |
| Net income (loss) |  | 394 | (2) |  | 392 |
| Total other comprehensive loss |  |  |  | (11) | (11) |
| Return on power program appropriation investment |  | (2) |  |  | (2) |
| **Balance at March 31, 2026** | $258 | $18455 | $506 | $(51) | $19168 |
| <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. |

---

**TENNESSEE VALLEY AUTHORITY**

**CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (Unaudited)**

**For the Six Months Ended March 31, 2026 and 2025**

(in millions)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Power Program Appropriation Investment** | **<br>Power Program Retained Earnings** | **Nonpower Programs Appropriation Investment, Net** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **<br>Total** |
| **Balance at September 30, 2024** | $258 | $16437 | $518 | $(52) | $17161 |
| Net income (loss) |  | 537 | (4) |  | 533 |
| Total other comprehensive income |  |  |  |  |  |
| Return on power program appropriation investment |  | (4) |  |  | (4) |
| **Balance at March 31, 2025** | $258 | $16970 | $514 | $(52) | $17690 |
| **Balance at September 30, 2025** | $258 | $17797 | $510 | $(54) | $18511 |
| Net income (loss) |  | 662 | (4) |  | 658 |
| Total other comprehensive income |  |  |  | 3 | 3 |
| Return on power program appropriation investment |  | (4) |  |  | (4) |
| **Balance at March 31, 2026** | $258 | $18455 | $506 | $(51) | $19168 |
| <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. | <br>The accompanying notes are an integral part of these consolidated financial statements. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)**

*(Dollars in millions except where noted)*

---

| | | |
|:---|:---|:---|
| **<u>Note</u>** | **<u>Note</u>** | **<u>Page</u>** |
| 1 | Summary of Significant Accounting Policies | [12](#i2c5964761a95480aaf5fa85443ba05b6_49) |
| 2 | Impact of New Accounting Standards and Interpretations | [14](#i2c5964761a95480aaf5fa85443ba05b6_52) |
| 3 | Restructuring | [16](#i2c5964761a95480aaf5fa85443ba05b6_1549) |
| 4 | Accounts Receivable, Net | [16](#i2c5964761a95480aaf5fa85443ba05b6_58) |
| 5 | Inventories, Net | [16](#i2c5964761a95480aaf5fa85443ba05b6_61) |
| 6 | Other Current Assets | [17](#i2c5964761a95480aaf5fa85443ba05b6_64) |
| 7 | Plant Closures | [17](#i2c5964761a95480aaf5fa85443ba05b6_67) |
| 8 | Other Long-Term Assets | [18](#i2c5964761a95480aaf5fa85443ba05b6_73) |
| 9 | Regulatory Assets and Liabilities | [19](#i2c5964761a95480aaf5fa85443ba05b6_76) |
| 10 | Variable Interest Entities | [19](#i2c5964761a95480aaf5fa85443ba05b6_79) |
| 11 | Other Long-Term Liabilities | [22](#i2c5964761a95480aaf5fa85443ba05b6_82) |
| 12 | Asset Retirement Obligations | [23](#i2c5964761a95480aaf5fa85443ba05b6_85) |
| 13 | Debt and Other Obligations | [24](#i2c5964761a95480aaf5fa85443ba05b6_88) |
| 14 | Risk Management Activities and Derivative Transactions | [25](#i2c5964761a95480aaf5fa85443ba05b6_100) |
| 15 | Fair Value Measurements | [31](#i2c5964761a95480aaf5fa85443ba05b6_103) |
| 16 | Revenue | [37](#i2c5964761a95480aaf5fa85443ba05b6_109) |
| 17 | Other Income, Net | [40](#i2c5964761a95480aaf5fa85443ba05b6_112) |
| 18 | Supplemental Cash Flow Information | [40](#i2c5964761a95480aaf5fa85443ba05b6_115) |
| 19 | Benefit Plans | [40](#i2c5964761a95480aaf5fa85443ba05b6_118) |
| 20 | Collaborative Arrangement | [41](#i2c5964761a95480aaf5fa85443ba05b6_121) |
| 21 | Commitments and Contingencies | [41](#i2c5964761a95480aaf5fa85443ba05b6_124) |
| 22 | Segment Reporting | [44](#i2c5964761a95480aaf5fa85443ba05b6_6047313954293) |

---

**1. Summary of Significant Accounting Policies** 

*General*

The Tennessee Valley Authority ("TVA") prepares its consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2025, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2025 (the "Annual Report"). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included on the consolidated interim financial statements.

*Fiscal Year*

TVA's fiscal year ends September 30. Years (2026, 2025, etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years.

*Basis of Presentation*

The accompanying consolidated interim financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA and variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 10 — *Variable Interest Entities*. Intercompany balances and transactions have been eliminated in consolidation.

*Use of Estimates*

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses, reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows.

*Cash, Cash Equivalents, and Restricted Cash* 

Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets on the Consolidated Balance Sheets. Restricted cash and cash equivalents include cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows:

---

| | | |
|:---|:---|:---|
| **Cash, Cash Equivalents, and Restricted Cash**<br>(in millions) | **Cash, Cash Equivalents, and Restricted Cash**<br>(in millions) | **Cash, Cash Equivalents, and Restricted Cash**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| Cash and cash equivalents | $501 | $1576 |
| Restricted cash and cash equivalents included in Other long-term assets | 21 | 21 |
| Total cash, cash equivalents, and restricted cash | $522 | $1597 |

---

*Allowance for Uncollectible Accounts* 

TVA recognizes an allowance that reflects the current estimate for credit losses expected to be incurred over the life of the financial assets based on historical experience, current conditions, and/or reasonable and supportable forecasts that affect the collectability of the reported amounts. The appropriateness of the allowance is evaluated at the end of each reporting period.

To determine the allowance for trade receivables as part of estimating expected credit losses, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date. TVA's corporate credit department also performs an assessment of the financial condition of customers and the credit quality of the receivables. In addition, TVA assumes that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the trade receivables.

To determine the allowance for loans receivables, TVA aggregates loans into the appropriate pools based on the existence of similar risk characteristics such as collateral types and internal assessed credit risks. In situations where a loan exhibits unique risk characteristics and is no longer expected to experience similar risks to the rest of its pool, the loan will be evaluated separately. TVA derives an annual loss rate based on historical loss and then adjusts the rate to reflect TVA's consideration of available information on current conditions and reasonable and supportable future forecasts. This information may include economic and business conditions, default trends, and other internal and external factors. For periods beyond the reasonable and supportable forecast period, TVA uses the current calculated long-term average historical loss rate for the remaining life of the loan portfolio.

The allowance for uncollectible accounts was $19 million and $14 million at March 31, 2026, and September 30, 2025, respectively, for trade accounts receivable. At March 31, 2026, the allowance for uncollectible accounts included $19 million related to one local power company customer ("LPC"). Additionally, loans receivable of $106 million and $86 million at March 31, 2026, and September 30, 2025, respectively, are included in Accounts receivable, net and Other long-term assets for the current and long-term portions, respectively. Loans receivables are reported net of allowances for uncollectible accounts of $2 million at both March 31, 2026, and September 30, 2025.

*Pre-Commercial Plant Operations*

As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the demands of the electric system. TVA estimates revenues earned during pre-commercial operations at the fair value of the energy delivered based on TVA's hourly incremental dispatch cost. Pre-commercial plant operations began on the Johnsonville Aeroderivative Combustion Turbine ("CT") Facility ("Johnsonville Facility") during 2025. Estimated revenue of $2 million related to this project was capitalized to offset project costs for both the three and six months ended March 31, 2025. TVA also capitalized related fuel costs for this project of $4 million and $5 million for the three and six months ended March 31, 2025, respectively.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Property, Plant, and Equipment, and Depreciation*&nbsp;&nbsp;&nbsp;&nbsp;

*Depreciation.* TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies that are updated approximately every five years, with the latest study implemented during the first quarter of 2022. Depreciation expense was $424 million and $475 million for the three months ended March 31, 2026 and 2025, respectively. Depreciation expense was $907 million and $945 million for the six months ended March 31, 2026 and 2025, respectively. See Note 7 — *Plant Closures* for a discussion of the impact of plant closures.

TVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates. In December 2025, the Nuclear Regulatory Commission ("NRC") approved a subsequent license renewal ("SLR") application for the three units at Browns Ferry Nuclear Plant ("Browns Ferry"), which extended the useful life of the three units for an additional 20 years. The SLR is estimated to result in approximately a $45 million reduction in depreciation expense quarterly, which does not include any potential impact from additions or retirements to net completed plant. For the three and six months ended March 31, 2026, there was an estimated reduction in depreciation expense of $45 million and $60 million, respectively, due to the December 2025 Browns Ferry SLR.

*Government Grants*

TVA accounts for government grants based on what the grant is intended to reimburse. Government grants related to an asset are recognized as an adjustment to the cost basis in determining the carrying amount of the asset (the cost accumulation approach), and government grants related to income are recognized as a deduction from the related expense. TVA records the grant when it is probable that both of the following criteria are met: (1) the grant will be received, and (2) TVA complies with all conditions attached to the eligibility of the grant.

The Inflation Reduction Act of 2022 ("IRA") makes credits available to certain tax-exempt entities, including TVA. In 2025, TVA began applying for these credits including Section 48 Investment Tax Credits for qualifying hydroelectric improvements and Section 45U Production Tax Credits for electricity generated by TVA's existing nuclear units. At March 31, 2026, and September 30, 2025, the carrying amount of the Accounts receivable, net, which is related to IRA tax credits was $112 million and $72 million, respectively. TVA received $26 million during the six months ended March 31, 2026, related to these credits.

There were no asset-related government grants recorded during the six months ended March 31, 2026. During the six months ended March 31, 2026 and 2025, TVA recognized $66 million and $4 million of income-related government grants, respectively, which were recorded as reductions of Operating and maintenance expense. There were no income-related government grants recorded during the three months ended March 31, 2026 and 2025.

 **2. Impact of New Accounting Standards and Interpretations** &nbsp;&nbsp;&nbsp;&nbsp;

The following is an accounting standard update issued by the Financial Accounting Standards Board that TVA adopted during 2026:

---

| | |
|:---|:---|
| **Accounting for Government Grants** | **Accounting for Government Grants** |
| **Description** | This guidance establishes accounting recognition, measurement, and presentation of government grants received by business entities, including guidance for (1) a grant related to an asset and (2) a grant related to income. The amendments in this update require that a government grant received by a business entity not be recognized until it is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received. The amendments require that a grant related to an asset be recognized utilizing either a deferred income approach or an adjustment to the cost basis and that a grant related to income be recognized either as other income or as a deduction from the related expense. In addition, the amendments require, consistent with current disclosure requirements, that a business entity provide disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. |
| **Effective Date for TVA** | The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2029. Early adoption is permitted, and TVA early adopted the standard as of October 1, 2025, applying the guidance on a modified prospective basis to grants that were not complete as of the adoption date. |
| **Effect on the Financial Statements or Other Significant Matters** | The adoption of this standard did not have a material impact on TVA's financial condition, results of operations, cash flows, or disclosures, and no cumulative-effect adjustment to retained earnings was recorded upon adoption. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

The following accounting standards or rules have been issued but as of March 31, 2026, were not effective and have not been adopted by TVA:

---

| | |
|:---|:---|
| **Enhancement and Standardization of Climate-Related Disclosures for Investors** | **Enhancement and Standardization of Climate-Related Disclosures for Investors** |
| **Description** | In March 2024, the Securities and Exchange Commission ("SEC") adopted its climate-related final rule (SEC Release No. 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors). In April 2024, the SEC voluntarily stayed the new rule as a result of pending legal challenges; in March 2025, the SEC withdrew its legal defense of the rule; and in April 2025, the United States Court of Appeals for the Eighth Circuit suspended the litigation over the validity of the rule. The new rule, if implemented as adopted, will require registrants to provide certain climate-related information in their annual reports and registration statements and will also require the dollar impact of severe weather events and other natural conditions, as well as amounts related to carbon offsets and renewable energy credits or certificates, to be disclosed in the audited financial statements in certain circumstances. If the new rule is implemented as adopted, the disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2027, for non-accelerated filers. |
| **Effective Date for TVA** | Fiscal year beginning October 1, 2027. |
| **Effect on the Financial Statements or Other Significant Matters** | TVA is currently evaluating the impact of the rule on its disclosures. |

---

---

| | |
|:---|:---|
| **Disaggregation of Income Statement Expenses** | **Disaggregation of Income Statement Expenses** |
| **Description** | This guidance improves the disclosures about a public entity's expenses in the notes to the financial statements and requires disclosure of specified information about certain costs and expenses. The amendments require a public entity to disclose, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. Specified expenses, gains, or losses that are already disclosed under existing U.S. GAAP are required to be included in the disaggregated income statement expense line item disclosures, and any relevant remaining amounts need to be described qualitatively. Separate disclosures of total selling expenses and an entity's definition of those expenses are also required. The amendments are effective for public entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Upon adoption, a public entity can apply the amendments prospectively or apply them retrospectively to all prior periods presented in the financial statements. |
| **Effective Date for TVA** | Fiscal year beginning October 1, 2027, and interim periods beginning October 1, 2028. |
| **Effect on the Financial Statements or Other Significant Matters** | The adoption of this standard will result in TVA including the additional required disclosures, and TVA does not expect an impact on its financial condition, results of operations, or cash flows. |

---

---

| | |
|:---|:---|
| **Accounting and Disclosure of Costs Related to Internally Developed Software** | **Accounting and Disclosure of Costs Related to Internally Developed Software** |
| **Description** | This guidance amends the accounting for and disclosure of costs related to internally developed software, eliminating project stages, clarifying significant development uncertainty by requiring costs to be recognized only when uncertainty is resolved, and aligning capitalization rules with those for externally sold software. Key changes include the elimination of distinct project stages for development, a redefined meaning of probable as likely, and requirements to assess significant development uncertainty for all software projects to determine when to capitalize costs. In addition, the guidance specifies that the property, plant, and equipment disclosure requirements shall be applied to all capitalized software costs. The amendments are effective for all public entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Upon adoption, a public entity may apply the guidance using a prospective, retrospective, or modified transition approach. |
| **Effective Date for TVA** | The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2028. |
| **Effect on the Financial Statements or Other Significant Matters** | The adoption of this standard is not expected to have a material impact on TVA's financial condition, results of operations, cash flows, or disclosures. |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**3. Restructuring**

TVA's demand continues to grow, driving the need for significant future capital investment. TVA must continue to drive efficiencies and cost savings across the enterprise to provide affordable, reliable electricity, while funding the capital investment needed to meet growing demand. This effort has evolved into an Enterprise Transformation Program ("ETP") focused on improving financial health, enhancing asset performance, automating processes, optimizing third-party spend through supply chain, and making the workforce more efficient. As part of these efforts, certain employees are eligible for severance payments. These amounts are recognized in Operating and maintenance expense on TVA's Consolidated Statements of Operations in the period incurred. Severance costs that have been incurred but not paid are included in Accounts payable and accrued liabilities on TVA's Consolidated Balance Sheets. The organizational design efforts associated with the ETP were complete as of September 30, 2025; however, the ETP is ongoing as TVA executes the focus areas described above. The table below summarizes the activity related to severance costs associated with the ETP:

---

| | |
|:---|:---|
| **Severance Cost Liability Activity**<br>(in millions) | **Severance Cost Liability Activity**<br>(in millions) |
| Severance cost liability at September 30, 2024 | $— |
| &nbsp;&nbsp;&nbsp;Liabilities incurred during the period | 40 |
| &nbsp;&nbsp;&nbsp;Actual costs paid during the period | (2) |
| Severance cost liability at March 31, 2025 | $38 |
| Severance cost liability at September 30, 2025 | $11 |
| &nbsp;&nbsp;&nbsp;Liabilities incurred during the period |  |
| &nbsp;&nbsp;&nbsp;Actual costs paid during the period | (10) |
| Severance cost liability at March 31, 2026 | $1 |

---

**4. Accounts Receivable, Net** 

Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable:

---

| | | |
|:---|:---|:---|
| **Accounts Receivable, Net**<br>(in millions) | **Accounts Receivable, Net**<br>(in millions) | **Accounts Receivable, Net**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025**<sup>(2)</sup> |
| Customer receivables | $1827 | $1992 |
| Other receivables | 161 | 141 |
| Allowance for uncollectible accounts<sup>(1)</sup> | (19) | (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | $1969 | $2119 |

---

<u>Notes</u>

(1) To determine the allowance for trade receivables, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date, among other considerations. See Note 1 — *Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts*. At March 31, 2026 and September 30, 2025, the allowance for uncollectible accounts included $19 million and $14 million, respectively, related to one LPC customer.

(2) At September 30, 2025, $84 million previously classified as Other receivables has been reclassified to Customer receivables to conform with current year presentation.

**5. Inventories, Net** 

The table below summarizes the types and amounts of TVA's inventories:

---

| | | |
|:---|:---|:---|
| **Inventories, Net**<br>(in millions) | **Inventories, Net**<br>(in millions) | **Inventories, Net**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| Materials and supplies inventory | $985 | $986 |
| Fuel inventory | 300 | 278 |
| Renewable energy certificates/emissions allowance inventory, net | 9 | 12 |
| Allowance for inventory obsolescence | (83) | (83) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | $1211 | $1193 |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**6. Other Current Assets**

Other current assets consisted of the following:

---

| | | |
|:---|:---|:---|
| **Other Current Assets** <br>(in millions) | **Other Current Assets** <br>(in millions) | **Other Current Assets** <br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| Inventory work-in-progress | $81 | $69 |
| Cloud assets | 51 | 3 |
| Prepaid software maintenance | 40 | 25 |
| Current portion of prepaid long-term service agreements | 27 | 16 |
| Commodity contract derivative assets | 15 | 14 |
| Prepaid insurance | 12 | 16 |
| Prepaid fees and dues | 8 | 7 |
| Other | 9 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | $243 | $162 |

---

*Commodity Contract Derivative Assets.* See Note 14 *— Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Contract Derivatives* and *— Commodity Derivatives under the FHP* for a discussion of TVA's commodity contract derivatives.

**7. Plant Closures** 

TVA must continuously evaluate all generating assets to ensure an optimal energy portfolio that provides safe and reliable power while maintaining flexibility and fiscal responsibility to the people of the Tennessee Valley. In January 2023, TVA issued its Record of Decision to retire two coal-fired units at Cumberland Fossil Plant ("Cumberland") by the end of CY 2026 and CY 2028. In April 2024, TVA issued its Record of Decision to retire the nine coal-fired units at Kingston Fossil Plant ("Kingston") by the end of CY 2027.

In February 2026, TVA published final supplemental environmental impact statements with the preferred alternatives of continued operations of Kingston and Cumberland in conjunction with the other capacity projects being constructed at the Kingston and Cumberland sites. The TVA Board of Directors ("TVA Board") subsequently and separately authorized TVA, at the direction and discretion of the Chief Executive Officer ("CEO"), to operate the Kingston and Cumberland Fossil Plants in accordance with all applicable laws and regulatory requirements, including all requirements imposed by any applicable permits, and directed TVA staff to apply for any permits that may be applicable for TVA to continue to operate the coal units, along with the new gas units.

Depreciation rates are adjusted to reflect the most current planning assumptions, ensuring units will be fully depreciated by the applicable retirement dates. TVA's previous decision to retire Cumberland and Kingston resulted in approximately $197 million and $66 million, respectively, of additional depreciation recorded through January 2026. Current depreciable life assumptions for Kingston and Cumberland are estimated to result in approximately a $99 million reduction in quarterly depreciation expense, which does not include any potential impact from additions or retirements to net completed plant. For both the three and six months ended March 31, 2026, there was an estimated reduction in depreciation expense of $33 million.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**8. Other Long-Term Assets** 

The table below summarizes the types and amounts of TVA's other long-term assets:

---

| | | |
|:---|:---|:---|
| **Other Long-Term Assets**<br>(in millions) | **Other Long-Term Assets**<br>(in millions) | **Other Long-Term Assets**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| Loans and other long-term receivables, net | $103 | $83 |
| Prepaid long-term service agreements | 82 | 89 |
| Prepaid capital assets | 81 | 81 |
| Cloud assets | 72 | 114 |
| EnergyRight<sup>®</sup> receivables, net | 45 | 45 |
| Commodity contract derivative assets | 4 | 10 |
| Other | 68 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other long-term assets | $455 | $506 |

---

*Loans and Other Long-Term Receivables*. At both March 31, 2026, and September 30, 2025, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $3 million. Loans receivables are reported net of allowances for uncollectible accounts. See Note 1 — *Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts.*

The allowance components, which consist of a collective allowance and specific loans allowance, are based on the risk characteristics of TVA's loans. Loans that share similar risk characteristics are evaluated on a collective basis in measuring credit losses, while loans that do not share similar risk characteristics with other loans are evaluated on an individual basis.

---

| | | |
|:---|:---|:---|
| **Allowance Components**<br>(in millions) | **Allowance Components**<br>(in millions) | **Allowance Components**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| EnergyRight<sup>®</sup> loan reserve | $1 | $1 |
| Economic development loan specific loan reserve | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total allowance for loan losses | $2 | $2 |

---

*Prepaid Long-Term Service Agreements*. At March 31, 2026, and September 30, 2025, prepayments of $27 million and $16 million, respectively, were recorded in Other current assets.

*Prepaid Capital Assets.* TVA makes prepayments to acquire capital assets. TVA classifies these prepayments as prepaid capital if the funds are refundable and/or TVA can receive a credit.

*Cloud Assets.* At March 31, 2026, and September 30, 2025, the carrying amount of the cloud assets reported in Other current assets was $51 million and $3 million, respectively. For the three months ended March 31, 2026 and 2025, TVA amortized $13 million and $4 million, respectively, as Operating and maintenance expense. For the six months ended March 31, 2026 and 2025, TVA amortized $14 million and $9 million, respectively, as Operating and maintenance expense.

*EnergyRight*<sup>®</sup> *Receivables*. In association with the EnergyRight<sup>®</sup> program, TVA's LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At both March 31, 2026, and September 30, 2025, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $12 million. See Note 11 — *Other Long-Term Liabilities* for information regarding the associated financing obligation.

*Commodity Contract Derivative Assets.* See Note 14 *— Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Contract Derivatives* and *— Commodity Derivatives under the FHP* for a discussion of TVA's commodity contract derivatives.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

 **9. Regulatory Assets and Liabilities** 

TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in earnings or that would impact the Consolidated Statements of Operations are recorded as regulatory assets or regulatory liabilities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below.

---

| | | |
|:---|:---|:---|
| **Regulatory Assets and Liabilities**<br>(in millions) | **Regulatory Assets and Liabilities**<br>(in millions) | **Regulatory Assets and Liabilities**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| **Current regulatory assets** | | |
| &nbsp;&nbsp;Fuel cost adjustment receivable | $301 | $— |
| &nbsp;&nbsp;Unrealized losses on commodity contract derivatives | 88 | 59 |
| &nbsp;&nbsp;Unrealized losses on interest rate derivatives | 55 | 57 |
| &nbsp;&nbsp;Other current regulatory assets | 11 | 11 |
| &nbsp;&nbsp;&nbsp;Total current regulatory assets | 455 | 127 |
| **Non-current regulatory assets** |  |  |
| &nbsp;&nbsp;Non-nuclear decommissioning costs | 5390 | 5563 |
| &nbsp;&nbsp;Retirement benefit plans deferred costs | 1506 | 1531 |
| &nbsp;&nbsp;Environmental compliance and remediation costs | 332 | 308 |
| &nbsp;&nbsp;Unrealized losses on interest rate derivatives | 274 | 316 |
| &nbsp;&nbsp;Nuclear decommissioning costs | 151 | 149 |
| &nbsp;&nbsp;Unrealized losses on commodity contract derivatives | 28 | 12 |
| &nbsp;&nbsp;Other non-current regulatory assets | 169 | 168 |
| &nbsp;&nbsp;Total non-current regulatory assets | 7850 | 8047 |
| &nbsp;&nbsp;&nbsp;Total regulatory assets | $8305 | $8174 |
| **Current regulatory liabilities** |  |  |
| &nbsp;&nbsp;Fuel cost adjustment tax equivalents | $197 | $203 |
| &nbsp;&nbsp;Unrealized gains on commodity contract derivatives | 15 | 14 |
| &nbsp;&nbsp;Fuel cost adjustment payable |  | 11 |
| &nbsp;&nbsp;&nbsp;Total current regulatory liabilities | 212 | 228 |
| **Non-current regulatory liabilities** |  |  |
| &nbsp;&nbsp;Retirement benefit plans deferred credits | 120 | 131 |
| &nbsp;&nbsp;Unrealized gains on commodity contract derivatives | 4 | 10 |
| &nbsp;&nbsp;Total non-current regulatory liabilities | 124 | 141 |
| &nbsp;&nbsp;&nbsp;Total regulatory liabilities | $336 | $369 |

---

**10. Variable Interest Entities** 

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. When TVA determines that it has a variable interest in a VIE, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis.

*John Sevier VIEs*

In 2012, TVA entered into a $1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF"). JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $900 million secured note issuance (the "JSCCG notes") and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third-party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.

The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the "Holdco notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each January 15 and July 15, with a final payment due in January 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes closed in January 2012. The JSCCG notes are secured by TVA's lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA's lease payments to JSCCG are equal to and payable on the same dates as JSCCG's and Holdco's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions.

Due to its participation in the design, business activity, and credit and financial support of JSCCG and Holdco, TVA has determined that it has a variable interest in each of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco's membership interests in JSCCG are eliminated in consolidation.

*Southaven VIE*

In 2013, TVA entered into a $400 million lease financing arrangement with Southaven Combined Cycle Generation LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the "SCCG notes") and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests in SCCG. A non-controlling interest in SHLLC is held by a third-party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated.

The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the "SHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each February 15 and August 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes, and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is seven percent, which is reflected as interest expense in the Consolidated Statements of Operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively.

The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The SCCG notes are secured by TVA's lease payments, and the SHLLC notes are secured by SHLLC's investment in, and amounts receivable from, SCCG. TVA's lease payments to SCCG are payable on the same dates as SCCG's and SHLLC's semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG's semi-annual debt service payments, (ii) the amount of SHLLC's semi-annual debt service payments, and (iii) the amount of the Seven States Return. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions.

In the event that TVA were to choose to exercise an early buy out feature of the Southaven facility lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven facility lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

TVA participated in the design, business activity, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis.

*Johnsonville VIE*

In October 2024, TVA entered into an $800 million construction management agreement and lease financing arrangement with Johnsonville Aeroderivative Combustion Turbine Generation LLC ("JACTG") for the completion and lease by TVA of the Johnsonville Facility. JACTG is a special single-purpose limited liability company formed in September 2024 to finance the Johnsonville Facility through a $720 million secured note issuance (the "JACTG notes") and the issuance of $80 million of membership interests subject to mandatory redemption. The membership interests were purchased by Johnsonville Holdco LLC ("JHLLC"). JHLLC is a special single-purpose entity, also formed in September 2024, established to acquire and hold the membership interests in JACTG. A non-controlling interest in JHLLC is held by a third-party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated.

The membership interests held by JHLLC in JACTG were purchased with proceeds from the issuance of $80 million of secured notes (the "JHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each April 1 and October 1, with a final payment due in October 2054. The payment dates for the mandatorily redeemable membership interests are the same as those of the JHLLC notes. The sale of the JACTG notes, the membership interests in JACTG, and the JHLLC notes closed in October 2024. The JACTG notes are secured by TVA's lease payments, and the JHLLC notes are secured by JHLLC's investment in, and amounts receivable from, JACTG. TVA's lease payments to JACTG are equal to and payable on the same dates as JACTG's and JHLLC's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JACTG and JHLLC. Certain agreements related to this transaction contain default and acceleration provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to its participation in the design, business activity, and credit and financial support of JACTG and JHLLC, TVA has determined that it has a variable interest in both of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JACTG and JHLLC and, as such, is required to account for the VIEs on a consolidated basis. JHLLC's membership interests in JACTG are eliminated in consolidation.

*Impact on Consolidated Financial Statements*

The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, SCCG, JACTG, and JHLLC at March 31, 2026, and September 30, 2025, as reflected on the Consolidated Balance Sheets, are as follows:

---

| | | |
|:---|:---|:---|
| **Summary of Impact of VIEs on Consolidated Balance Sheets**<br>(in millions) | **Summary of Impact of VIEs on Consolidated Balance Sheets**<br>(in millions) | **Summary of Impact of VIEs on Consolidated Balance Sheets**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| **Current liabilities** | | |
| &nbsp;&nbsp;Accrued interest | $29 | $29 |
| &nbsp;&nbsp;Accounts payable and accrued liabilities | 1 | 1 |
| &nbsp;&nbsp;Current maturities of long-term debt of variable interest entities | 50 | 49 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 80 | 79 |
| **Other liabilities** |  |  |
| &nbsp;&nbsp;Other long-term liabilities | 14 | 14 |
| **Long-term debt, net** |  |  |
| &nbsp;&nbsp;Long-term debt of variable interest entities, net | 1607 | 1632 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $1701 | $1725 |

---

Interest expense of $21 million for both the three months ended March 31, 2026, and the three months ended March 31, 2025, and $42 million and $43 million for the six months ended March 31, 2026 and 2025, respectively, is included in the Consolidated Statements of Operations related to debt of VIEs and membership interests of VIEs subject to mandatory redemption.

Creditors of the VIEs do not have any recourse to the general credit of TVA. TVA does not have any obligations to provide financial support to the VIEs other than as prescribed in the terms of the agreements related to these transactions.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**11. Other Long-Term Liabilities**

Other long-term liabilities consist primarily of liabilities related to certain derivative agreements as well as liabilities related to environmental compliance and remediation and long-term project cost accruals. The table below summarizes the types and amounts of Other long-term liabilities:

---

| | | |
|:---|:---|:---|
| **Other Long-Term Liabilities**<br>(in millions) | **Other Long-Term Liabilities**<br>(in millions) | **Other Long-Term Liabilities**<br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| Interest rate swap liabilities | $590 | $643 |
| Environmental compliance and remediation costs | 328 | 274 |
| Long-term project cost accruals | 161 | 204 |
| Currency swap liabilities | 118 | 108 |
| Advances for construction | 84 | 61 |
| EnergyRight<sup>®</sup> financing obligation | 53 | 53 |
| Operating lease liabilities | 48 | 63 |
| Long-term deferred revenue | 40 | 39 |
| Long-term deferred compensation | 37 | 54 |
| Commodity contract derivative liabilities | 28 | 12 |
| Accrued long-term service agreements | 11 | 25 |
| Other | 71 | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other long-term liabilities | $1569 | $1606 |

---

*Interest Rate Swap Liabilities.* See Note 14 — *Risk Management Activities and Derivative Transactions* — *Overview of Accounting Treatment* — *Derivatives Not Receiving Hedge Accounting Treatment* and — *Interest Rate Derivatives* for information regarding the interest rate swap liabilities.

*Environmental Compliance and Remediation Costs*. At March 31, 2026, and September 30, 2025, the current amount of the environmental compliance and remediation costs reported in Accounts payable and accrued liabilities was $24 million and $52 million, respectively.

*Long-Term Project Cost Accruals*. At March 31, 2026, and September 30, 2025, the current amount of the long-term project cost accruals reported in Accounts payable and accrued liabilities was $312 million and $256 million, respectively.

*Currency Swap Liabilities*. See Note 14 — *Risk Management Activities and Derivative Transactions* — *Overview of Accounting Treatment* and — *Cash Flow Hedging Strategy for Currency Swaps* for more information regarding the currency swap liabilities.

*&nbsp;&nbsp;&nbsp;&nbsp;*

*Advances for Construction.* At March 31, 2026, and September 30, 2025, the current amount of advances for construction recorded in Accounts payable and accrued liabilities was $140 million and $155 million, respectively.

*EnergyRight*<sup>®</sup> *Financing Obligation*. At both March 31, 2026, and September 30, 2025, the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was $13 million. See Note 8 — *Other Long-Term Assets* for information regarding the associated loans receivable.

*Operating Lease Liabilities*. At March 31, 2026, and September 30, 2025, the current portion of TVA's operating leases reported in Accounts payable and accrued liabilities was $39 million and $46 million, respectively.

*Long-Term Deferred Revenue*. At March 31, 2026, and September 30, 2025, the current amount of deferred revenue recorded in Accounts payable and accrued liabilities was $41 million and $25 million, respectively.

*Long-Term Deferred Compensation*. At March 31, 2026, and September 30, 2025, the current amount of deferred compensation recorded in Accounts payable and accrued liabilities was $64 million and $70 million, respectively.

*Commodity Contract Derivative Liabilities*. See Note 14 — *Risk Management Activities and Derivative Transactions* — *Derivatives Not Receiving Hedge Accounting Treatment* — *Commodity Contract Derivatives* and — *Commodity Derivatives under the FHP* for a discussion of TVA's commodity contract derivatives.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Accrued Long-Term Service Agreements.* At March 31, 2026, and September 30, 2025, the current amount of accrued long-term service agreements recorded in Accounts payable and accrued liabilities was $30 million and $17 million, respectively.

**12. Asset Retirement Obligations**

During the six months ended March 31, 2026, TVA's total asset retirement obligations ("ARO") liability decreased $903 million as a result of revisions in estimates to nuclear and non-nuclear AROs and settlements related to retirement projects that were conducted during the period, partially offset by increases due to periodic accretion. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the six months ended March 31, 2026, $110 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 9 — *Regulatory Assets and Liabilities*. TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 *— Fair Value Measurements* — *Investment Funds* and Note 21 — *Commitments and Contingencies* — *Contingencies* — *Decommissioning Costs* for a discussion of the trusts' objectives and the current balances of the trusts.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Asset Retirement Obligation Activity**<br>(in millions) | **Asset Retirement Obligation Activity**<br>(in millions) | **Asset Retirement Obligation Activity**<br>(in millions) | **Asset Retirement Obligation Activity**<br>(in millions) | |
| | **Nuclear** | **Non-Nuclear** | **Total** | |
| Balance at September 30, 2025 | $3976 | $6438 | $10414 | (1) |
| &nbsp;&nbsp;&nbsp;Settlements | (6) | (112) | (118) |  |
| &nbsp;&nbsp;&nbsp;Revisions in estimate (non-cash) | (738) | (254) | (992) |  |
| &nbsp;&nbsp;&nbsp;Accretion (recorded as regulatory asset) | 83 | 124 | 207 |  |
| Balance at March 31, 2026 | $3315 | $6196 | $9511 | (1) |

---

<u>Note</u>

(1) Includes $343 million and $313 million at March 31, 2026, and September 30, 2025, respectively, in Current liabilities.

Revisions in nuclear estimates decreased the liability balance by $738 million for the six months ended March 31, 2026. The decrease resulted primarily from the approval of an SLR for Browns Ferry by the NRC in December 2025. The SLR authorizes each of Browns Ferry's three units to operate for an additional 20 years, resulting in a total operating life of 80 years.

Revisions in non-nuclear estimates reduced the liability balance by $254 million for the six months ended March 31, 2026. The decrease was attributable to revisions related to the Legacy Coal Combustion Residuals Rule ("Legacy CCR Rule") that impacted closure liabilities across TVA's fossil fleet and changes in projections for the timing of certain asset retirement activities at Kingston, Cumberland, and Gallatin Fossil Plant ("Gallatin").

On February 10, 2026, the Environmental Protection Agency ("EPA") published a final rule that extended key compliance deadlines within federal regulations for the disposal of coal combustion residuals ("CCR"). The final rule, entitled *Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals from Electric Utilities; CCR Management Unit Deadline Extension Rule*, provides additional time to meet facility evaluation requirements and associated groundwater monitoring provisions and compliance deadlines for existing and potential CCR units. TVA recorded a decrease of $146 million to the ARO liability as a result of the enactment of the final rule.

TVA performed an assessment of the assumptions used in the timing of cash flows related to AROs at the Kingston and Cumberland sites and recorded a decrease of $65 million based on the assessment. Additionally, TVA recorded a decrease of $44 million related to updates in the projected timing of closure activities at Gallatin.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**13. Debt and Other Obligations** 

*Debt Outstanding*

Total debt outstanding at March 31, 2026, and September 30, 2025, consisted of the following:

---

| | | |
|:---|:---|:---|
| **Debt Outstanding** <br>(in millions) | **Debt Outstanding** <br>(in millions) | **Debt Outstanding** <br>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| **Short-term debt** | | |
| &nbsp;&nbsp;Short-term debt, net of discounts | $1348 | $— |
| &nbsp;&nbsp;Current maturities of power bonds issued at par | 1020 | 1370 |
| &nbsp;&nbsp;Current maturities of long-term debt of VIEs issued at par | 50 | 49 |
| &nbsp;&nbsp;&nbsp;Total current debt outstanding, net | 2418 | 1419 |
| **Long-term debt** |  |  |
| &nbsp;&nbsp;Long-term power bonds<sup>(1)</sup> | 19619 | 20628 |
| &nbsp;&nbsp;Long-term debt of VIEs, net | 1607 | 1632 |
| &nbsp;&nbsp;Unamortized discounts, premiums, issue costs, and other | (160) | (167) |
| &nbsp;&nbsp;&nbsp;Total long-term debt, net | 21066 | 22093 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total debt outstanding | $23484 | $23512 |

---

<u>Note</u>

(1) Includes total net exchange gain from currency transactions of $68 million and $59 million at March 31, 2026, and September 30, 2025, respectively.

*Debt Securities Activity*

The table below summarizes the long-term debt securities activity for the period from October 1, 2025, to March 31, 2026:

---

| | | |
|:---|:---|:---|
| **Debt Securities Activity** | **Debt Securities Activity** | **Debt Securities Activity** |
| | **Date** | **Amount**<br>(in millions) |
| **Redemptions/Maturities**<sup>(1) (2)</sup> | | |
| 1995 E Global | November 2025 | $1350 |
| &nbsp;&nbsp;&nbsp;Total redemptions/maturities of power bonds |  | 1350 |
| &nbsp;&nbsp;Debt of variable interest entities |  | 24 |
| &nbsp;&nbsp;&nbsp;Total redemptions/maturities of debt |  | $1374 |

---

<u>Notes</u>

(1) All redemptions were at 100 percent of par.

(2) The 2009 Series B redemption amount was less than $1 million in December 2025.

*Credit Facility Agreements*

TVA has funding available under three revolving credit facilities totaling $2.5 billion. See the table below for additional information on the three revolving credit facilities. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.5 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. At March 31, 2026, and September 30, 2025, there were $506 million and $498 million, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. TVA's letters of credit are primarily posted as collateral under TVA's interest rate swaps. See Note 14 — *Risk Management Activities and Derivative Transactions* — *Other Derivative Instruments* — *Collateral.* TVA may also post collateral for TVA's currency swaps, for commodity derivatives under the Financial Hedging Program ("FHP"), or for certain transactions with third parties that require TVA to post letters of credit.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

The following table provides additional information regarding TVA's funding available under the three revolving credit facilities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Summary of Credit Facilities**<br>**At March 31, 2026**<br>(in millions) | **Summary of Credit Facilities**<br>**At March 31, 2026**<br>(in millions) | **Summary of Credit Facilities**<br>**At March 31, 2026**<br>(in millions) | **Summary of Credit Facilities**<br>**At March 31, 2026**<br>(in millions) | **Summary of Credit Facilities**<br>**At March 31, 2026**<br>(in millions) |
| **Maturity Date** | **Facility Limit** | **Letters of Credit Outstanding** | **Cash Borrowings** | **Availability** |
| &nbsp;&nbsp;March 2027 | $1000 | $122 | $— | $878 |
| &nbsp;&nbsp;February 2028 | 500 | 214 |  | 286 |
| &nbsp;&nbsp;September 2030 | 1000 | 170 |  | 830 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $2500 | $506 | $— | $1994 |

---

TVA and the United States ("U.S.") Department of the Treasury ("U.S. Treasury"), pursuant to the Tennessee Valley Authority Act of 1933, as amended ("TVA Act"), have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for 2026 with a maturity date of September 30, 2026. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue bonds, notes, or other evidences of indebtedness (collectively, "Bonds") in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of 12 months or less. There were no outstanding borrowings under the facility at March 31, 2026. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit.

**14. Risk Management Activities and Derivative Transactions** 

TVA is exposed to various risks related to commodity prices, investment prices, interest rates, currency exchange rates, and inflation as well as counterparty credit and performance risks. To help manage certain of these risks, TVA has historically entered into various derivative transactions, principally commodity option contracts, forward contracts, swaps, swaptions, futures, and options on futures.

*Overview of Accounting Treatment*

TVA recognizes certain of its derivative instruments as either assets or liabilities on its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of these instruments depends on (1) whether TVA uses regulatory accounting to defer the derivative gains and losses, (2) whether the derivative instrument has been designated and qualifies for hedge accounting treatment, and (3) if so, the type of hedge relationship (for example, cash flow hedge).

The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)**<br> (in millions) |
| | | | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| **Derivatives in Cash Flow Hedging Relationship** | **Objective of Hedge Transaction** | **Accounting for Derivative<br>Hedging Instrument** | **2026** | **2025** | **2026** | **2025** |
| Currency swaps | To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk) | Unrealized gains and losses are recorded in Accumulated other comprehensive income (loss) ("AOCI") and reclassified to Interest expense to the extent they are offset by gains and losses on the hedged transaction | $(22) | $(4) | $(9) | $(23) |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)**<sup>(1)</sup>**Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)**<sup>(1)</sup>**Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)**<sup>(1)</sup>**Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)**<sup>(1)</sup>**Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense**<br> (in millions) | **Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)**<sup>(1)</sup>**Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense**<br> (in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| **Derivatives in Cash Flow Hedging Relationship** | **2026** | **2025** | **2026** | **2025** |
| Currency swaps | $(11) | $14 | $(12) | $(23) |

---

<u>Note</u>

(1) There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $23 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to the forecasted exchange loss on the debt.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) | **Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment**<br>**Amount of Gain (Loss) Recognized in Income on Derivatives**<sup>(1)</sup><br>(in millions) |
| | | | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| **Derivative Type** | **Objective of Derivative** | **Accounting for Derivative Instrument** | **2026** | **2025** | **2026** | **2025** |
| Interest rate swaps | To fix short-term debt variable rate to a fixed rate (interest rate risk) | Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively<br>Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow | $(14) | $(12) | $(27) | $(22) |
| Commodity derivatives<br>under the FHP | To protect against fluctuations in market prices of purchased commodities (price risk) | Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively<br>Realized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity<sup>(2)</sup> | 21 | (14) | 8 | (51) |

---

<u>Notes</u>

(1) 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 were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and six months ended March 31, 2026 and for the three and six months ended March 31, 2025.

(2) Of the amount recognized for the three months ended March 31, 2026, $17 million and $4 million were reported in Fuel expense and Purchased power expense, respectively, and of the amount recognized for the three months ended March 31, 2025, $(12) million and $(2) million were reported in Fuel expense and Purchased power expense, respectively. Of the amount recognized for the six months ended March 31, 2026, $7 million and $1 million were reported in Fuel expense and Purchased power expense, respectively, and of the amount recognized for the six months ended March 31, 2025, $(42) million and $(9) million were reported in Fuel expense and Purchased power expense, respectively.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair Values of TVA Derivatives**<br>(in millions) | **Fair Values of TVA Derivatives**<br>(in millions) | **Fair Values of TVA Derivatives**<br>(in millions) | **Fair Values of TVA Derivatives**<br>(in millions) | **Fair Values of TVA Derivatives**<br>(in millions) |
| | **At March 31, 2026** | **At March 31, 2026** | **At September 30, 2025** | **At September 30, 2025** |
| **Derivatives That Receive Hedge Accounting Treatment:** | **Derivatives That Receive Hedge Accounting Treatment:** | **Derivatives That Receive Hedge Accounting Treatment:** | **Derivatives That Receive Hedge Accounting Treatment:** | **Derivatives That Receive Hedge Accounting Treatment:** |
| | **Balance** | **Balance Sheet Presentation** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Balance** | **Balance Sheet Presentation** |
| Currency swaps |  |  |  |  |
| &nbsp;&nbsp;£250 million Sterling | $(55) | &nbsp;&nbsp;Accounts payable and accrued liabilities $(4); Other long-term liabilities $(51) | $(47) | &nbsp;&nbsp;Accounts payable and accrued liabilities $(4); Other long-term liabilities $(43) |
| &nbsp;&nbsp;£150 million Sterling | (70) | &nbsp;&nbsp;Accounts payable and accrued liabilities $(3); Other long-term liabilities $(67) | (68) | &nbsp;&nbsp;Accounts payable and<br>accrued liabilities $(3); Other long-term liabilities $(65) |
| **Derivatives That Do Not Receive Hedge Accounting Treatment:** | **Derivatives That Do Not Receive Hedge Accounting Treatment:** | **Derivatives That Do Not Receive Hedge Accounting Treatment:** | **Derivatives That Do Not Receive Hedge Accounting Treatment:** | **Derivatives That Do Not Receive Hedge Accounting Treatment:** |
|  | **Balance** | **Balance Sheet Presentation** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Balance** | **Balance Sheet Presentation** |
| Interest rate swaps |  |  |  |  |
| &nbsp;&nbsp;$1.0 billion notional | $(491) | &nbsp;&nbsp;Accounts payable and<br>accrued liabilities $(13); Accrued interest $(30); <br>Other long-term liabilities<br>$(448) | $(526) | &nbsp;&nbsp;Accounts payable and accrued liabilities $(13); Accrued interest $(28); <br>Other long-term liabilities $(485) |
| &nbsp;&nbsp;$476 million notional | (156) | &nbsp;&nbsp;Accounts payable and<br>accrued liabilities $(5); Accrued interest $(9); <br>Other long-term liabilities<br>$(142) | (172) | &nbsp;&nbsp;Accounts payable and accrued liabilities $(5); Accrued interest $(9);<br>Other long-term liabilities<br>$(158) |
| Commodity contract derivatives | 8 | &nbsp;&nbsp;Other current assets $15; Other long-term assets $3; Accounts payable and accrued liabilities $(4); Other long-term liabilities $(6) | 10 | &nbsp;&nbsp;Other current assets $14; Other long-term assets $2; Accounts payable and accrued liabilities $(2); Other long-term liabilities $(4) |
| Commodity derivatives under the FHP | (105) | &nbsp;&nbsp;Other long-term assets $1; Accounts payable and accrued liabilities $(84); Other long-term liabilities $(22) | (57) | &nbsp;&nbsp;Other long-term assets $8; Accounts payable and accrued liabilities $(57); Other long-term liabilities $(8) |

---

*Cash Flow Hedging Strategy for Currency Swaps*

To protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurred. TVA had two currency swaps outstanding at March 31, 2026, with total currency exposure of £400 million and expiration dates in 2032 and 2043.

When the dollar strengthens against the British pound sterling, the exchange gain on the Bond liability and related accrued interest is offset by an equal amount of loss on the swap contract that is reclassified out of AOCI. Conversely, the exchange loss on the Bond liability and related accrued interest is offset by an equal amount of gain on the swap contract that is reclassified out of AOCI. All such exchange gains or losses on the Bond liability and related accrued interest are included in Long-term debt, net and Accrued interest, respectively. The offsetting exchange losses or gains on the swap contracts are recognized in AOCI. If any gain (loss) were to be incurred as a result of the early termination of the foreign currency swap contract, the resulting income (expense) would be amortized over the remaining life of the associated Bond as a component of Interest expense. The values of the currency swap liabilities are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.

*Derivatives Not Receiving Hedge Accounting Treatment* 

*Interest Rate Derivatives*. Generally TVA uses interest rate swaps to fix variable short-term debt to a fixed rate, and TVA uses regulatory accounting treatment to defer the mark-to-market ("MtM") gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory liabilities or assets on TVA's Consolidated Balance Sheets and are included in the ratemaking formula when gains or losses are realized. The values of these derivatives are included in Accounts payable and accrued liabilities, Accrued interest, and Other long-term liabilities on the Consolidated Balance Sheets, and realized gains and losses, if any, are included on TVA's Consolidated Statements of Operations. For the three months ended March 31, 2026 and 2025, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $10 million and the increase in unrealized losses of $42 million, respectively. For the six months ended March 31, 2026 and 2025, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $52 million and $135 million, respectively. TVA may hold short-term debt balances lower than the notional amount of

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

the interest rate swaps from time to time due to changes in business conditions and other factors. While actual balances vary, TVA generally plans to maintain average balances of short-term debt equal to or in excess of the combined notional amount of the interest rate swaps.

*&nbsp;&nbsp;&nbsp;&nbsp;*

*Commodity Contract Derivatives*. TVA enters into certain commodity contract derivatives for natural gas that require physical delivery of the contracted quantity. TVA marks to market these contracts and defers the unrealized gains (losses) as regulatory liabilities (assets). At March 31, 2026, TVA's natural gas commodity contract derivatives had terms of up to 10 years.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  | **Commodity Contract Derivatives**  |
| | **At March 31, 2026** | **At March 31, 2026** | **At March 31, 2026** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** |
| | **Number of Contracts** | **Notional Amount** | **Fair Value (MtM)**<br>(in millions) | **Number of Contracts** | **Notional Amount** | **Fair Value (MtM)**<br>(in millions) |
| Natural gas contract derivatives | 23 | 649 million mmBtu | $8 | 53 | 562 million mmBtu | $10 |

---

*Commodity Derivatives under the FHP.* Currently, TVA is hedging exposure to the price of natural gas under the FHP. There is no Value at Risk aggregate transaction limit under the current FHP structure, but the TVA Board reviews and authorizes the use of tolerances and measures annually. TVA's FHP policy prohibits trading financial instruments under the FHP for speculative purposes. At March 31, 2026, TVA's natural gas swap contracts under the FHP had remaining terms of up to five years.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> | **Commodity Derivatives under Financial Hedging Program**<sup>(1)</sup> |
| | **At March 31, 2026** | **At March 31, 2026** | **At March 31, 2026** | **At September 30, 2025** | **At September 30, 2025** | **At September 30, 2025** |
| | **Number of Contracts** | **Notional Amount** | **Fair Value (MtM)**<br>(in millions) | **Number of Contracts** | **Notional Amount** | **Fair Value (MtM)**<br>(in millions) |
| Natural gas swap contracts | 220 | 299 million mmBtu | $(105) | 295 | 300 million mmBtu | $(57) |

---

<u>Note</u>

(1) Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts.

TVA defers all FHP unrealized gains (losses) as regulatory liabilities (assets) and records the realized gains or losses in Fuel expense and Purchased power expense to match the delivery period of the underlying commodity.

*Offsetting of Derivative Assets and Liabilities*

The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets are shown in the table below:

---

| | | |
|:---|:---|:---|
| **Derivative Assets and Liabilities**<sup>(1)</sup>(in millions) | **Derivative Assets and Liabilities**<sup>(1)</sup>(in millions) | **Derivative Assets and Liabilities**<sup>(1)</sup>(in millions) |
| | **At March 31, 2026** | **At September 30, 2025** |
| **Assets** | | |
| Commodity contract derivatives | $18 | $16 |
| Commodity derivatives under the FHP<sup>(2)</sup> | 1 | 8 |
| Total derivatives subject to master netting or similar arrangement | $19 | $24 |
| **Liabilities** |  |  |
| Currency swaps | $125 | $115 |
| Interest rate swaps<sup>(3)</sup> | 647 | 698 |
| Commodity contract derivatives | 10 | 6 |
| Commodity derivatives under the FHP<sup>(2)</sup> | 106 | 65 |
| Total derivatives subject to master netting or similar arrangement | $888 | $884 |

---

<u>Notes</u>

(1) Offsetting amounts include counterparty netting of derivative contracts. Except as discussed below, there were no other material offsetting amounts on TVA's Consolidated Balance Sheets at either March 31, 2026, or September 30, 2025.

(2) At March 31, 2026, the gross derivative asset and gross derivative liability were $31 million and $136 million, respectively, with offsetting amounts for each totaling $30 million. At September 30, 2025, the gross derivative asset and gross derivative liability were $28 million and $85 million, respectively, with offsetting amounts for each totaling $20 million.

(3) Letters of credit of $464 million and $442 million were posted as collateral at March 31, 2026, and September 30, 2025, respectively, to partially secure the liability

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

positions of one of the interest rate swaps in accordance with the collateral requirements for this derivative.

*Other Derivative Instruments* 

*Investment Fund Derivatives*. Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT"), the Asset Retirement Trust ("ART"), the Supplemental Executive Retirement Plan ("SERP"), the Deferred Compensation Plan ("DCP"), and the Restoration Plan ("RP"). See Note 15 — *Fair Value Measurements* — *Investment Funds* for a discussion of the trusts, plans, and types of investments. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At March 31, 2026, and September 30, 2025, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $15 million and $16 million at March 31, 2026, and September 30, 2025, respectively.

*Collateral*. TVA's interest rate swaps, currency swaps, and commodity derivatives under the FHP contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At March 31, 2026, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $888 million. TVA's collateral obligations at March 31, 2026, under these arrangements were $421 million, for which TVA had posted $464 million in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the interest rate swap contracts as a result of this posted collateral.

For all of its derivative instruments with credit-risk related contingent features:

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If TVA remains a majority-owned U.S. government entity but S&P Global Ratings ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA's credit rating to AA or Aa2, respectively, TVA's collateral obligations would likely increase by $22 million, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If TVA ceases to be majority-owned by the U.S. government, TVA's credit rating would likely be downgraded and TVA would be required to post additional collateral.

*Counterparty Risk* 

TVA may be exposed to certain risks when a counterparty has the potential to fail to meet its obligations in accordance with agreed terms. These risks may be related to credit, operational, or nonperformance matters. To mitigate certain counterparty risk, TVA analyzes the counterparty's financial condition prior to entering into an agreement, establishes credit limits, monitors the appropriateness of those limits, as well as any changes in the creditworthiness of the counterparty, on an ongoing basis, and when required, employs credit mitigation measures, such as collateral or prepayment arrangements and master purchase and sale agreements.

*Customers*. TVA is exposed to counterparty credit risk associated with trade accounts receivable from delivered power sales to LPCs, and from industries and federal agencies directly served, all located in the Tennessee Valley region. Of the $1.8 billion and $2.0 billion of customer receivables outstanding at March 31, 2026, and September 30, 2025, respectively, nearly all of the counterparties were rated investment grade. The majority of the obligations of these customers that are not investment grade are secured by collateral. TVA is also exposed to risk from exchange power arrangements with a small number of investor-owned regional utilities related to either delivered power or the replacement of open positions of longer-term purchased power or fuel agreements. TVA believes its policies and procedures for counterparty performance risk reviews have generally protected TVA against significant exposure related to market and economic conditions. See Note 1 — *Summary of Significant Accounting Policies* — *Allowance for Uncollectible Accounts,* Note 4 — *Accounts Receivable, Net,* and Note 8 — *Other Long-Term Assets*.

TVA had revenue from two LPCs that collectively accounted for 15 percent of total operating revenues for both the six months ended March 31, 2026 and the six months ended March 31, 2025.

*Suppliers*. TVA assesses potential supplier performance risks, including procurement of fuel, purchased power, parts, and services. If suppliers are unable or unwilling to perform under TVA's existing contracts and TVA is unable to obtain similar services or supplies from other vendors in a timely manner, or if there are significant changes to tariffs and/or transportation costs impacting suppliers, TVA could experience delays, disruptions, additional costs, or other operational outcomes that may impact generation, maintenance, and capital programs. If certain fuel or purchased power suppliers fail to perform under the terms of their contract with TVA, TVA might lose the money that it paid to the supplier under the contract and have to purchase replacement fuel or power on the spot market, perhaps at a significantly higher price than TVA was entitled to pay under the contract. In addition, TVA might not be able to acquire replacement fuel or power in a timely manner and thus might be unable to satisfy its own obligations to deliver power. TVA continues evaluating potential supplier performance risks and supplier impact but cannot determine or predict the duration of such risks/impacts or the extent to which such risks/impacts could affect TVA's business, operations, and financial results or cause potential business disruptions.

TVA continues to experience supply chain pressures resulting from inflation, tariffs and other trade restrictions, material

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

constraints, and labor availability. These factors have contributed to project delays, limited availability of critical materials, and increased costs for both materials and labor. Although these challenges have been managed with limited disruption to business operations thus far, continued or escalating pressures could result in more substantial operational impacts and increased pressure on power rates.

<u>Natural Gas and Fuel Oil</u>. TVA purchases a significant amount of its natural gas requirements through contracts with a variety of suppliers and purchases substantially all of its fuel oil requirements on the spot market. TVA delivers to its gas fleet under firm and non-firm transportation contracts on multiple interstate natural gas pipelines. TVA contracts for storage capacity that allows for operational flexibility and increased supply during peak gas demand scenarios or supply disruptions. TVA uses contracts of various lengths and terms to meet the projected natural gas needs of its natural gas fleet. TVA also maintains on-site, fuel oil backup to operate at the majority of the CT sites in the event of major supply disruptions. In the event a supplier experiences an incident that limits its ability to fulfill its firm contractual obligations to supply TVA with natural gas, TVA intends to leverage its storage and balancing services and/or replace the volume with a third party to ensure reliability of generation.

<u>Coal</u>. To help support a reliable coal supply, TVA maintained contracts with multiple suppliers as of March 31, 2026. These contracts source coal from several diverse geographic regions across the U.S., with deliveries made via both barge and rail. Coal suppliers have faced mounting financial pressures driven by emerging technologies, evolving regulatory frameworks, and shifting market dynamics. These challenges have strained the balance between coal demand and available supply. TVA is actively evaluating recent regulatory developments that may impact its coal procurement strategy and long-term generation planning.

<u>Nuclear Fuel</u>. Nuclear fuel is obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, and contracted fuel fabrication services. The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions. Supply market conditions may make procurement contracts subject to credit risk related to the potential nonperformance of counterparties. In the event of nonperformance by these or other suppliers, TVA believes that replacement uranium concentrate and nuclear fuel services can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements.

<u>Purchased Power</u>. TVA acquires power from a variety of power producers through long-term and shorter-term power purchase agreements ("PPAs") as well as through spot market purchases. Because of the reliability risk of purchased power, TVA generally requires that the PPAs contain certain counterparty performance assurance requirements to help insure counterparty performance during the term of the agreements.

<u>Other Suppliers</u>. Solar supply chain constraints, commodity price increases, legislative changes, trade policy issues, and investigations into and affecting solar panel imports have created challenges for the U.S. solar industry including TVA's solar portfolio.

*Derivative Counterparties*. TVA has entered into physical and financial contracts that are classified as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit plan ("pension plan") have entered into derivative contracts for investment purposes. If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur costs in connection with entering into a replacement transaction. If a counterparty to the derivative contracts into which the NDT, the ART, or the pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At March 31, 2026, all of TVA's commodity derivatives under the FHP, currency swaps, and interest rate swaps were with counterparties whose Moody's credit ratings were A2 or higher. TVA classifies forward natural gas contracts as derivatives. At March 31, 2026, the forward natural gas contracts were with counterparties whose ratings ranged from B1 to A1.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**15. Fair Value Measurements** 

Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs.

*Valuation Techniques*

The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows:

---

| | |
|:---|:---|
| 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. |

---

A financial instrument's level within the fair value hierarchy (where Level 1 is the highest and Level 3 is the lowest) is based on the lowest level of input significant to the fair value measurement.

The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP, DCP, and RP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements.

*Investment Funds* 

At March 31, 2026, Investment funds were comprised of $5.7 billion of equity securities and debt securities classified as trading measured at fair value. Equity and trading debt securities are held in the NDT, ART, SERP, DCP, and RP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The balances in the NDT and ART were $3.8 billion and $1.8 billion, respectively, at March 31, 2026.

TVA established a SERP to provide benefits to selected employees of TVA which are comparable to those provided by competing organizations. The DCP is designed to provide participants with the ability to defer compensation to future periods. The RP is a non-qualified excess 401(k) plan designed to allow certain eligible employees whose contributions to the 401(k) plan are limited by Internal Revenue Service ("IRS") rules to save additional amounts for retirement and receive non-elective and matching employer contributions. The NDT, ART, SERP, DCP, and RP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance.

The NDT, ART, SERP, DCP, and RP are composed of multiple types of investments and are managed by external institutional investment managers. Most U.S. and international equities, U.S. Treasury inflation-protected securities, and real estate investment trust securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs. Cash equivalents and other short-term investments are highly liquid securities with maturities of less than three months and 12 months, respectively. These consist primarily of discount securities such as repurchase agreements and U.S. Treasury bills. These securities may be priced at cost, which

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

approximates fair value due to the short-term nature of the instruments. These securities are classified as Level 2. Active market pricing may be utilized for U.S. Treasury bills, which are classified as Level 1.

Private equity limited partnerships, private real asset investments, and private credit investments may include holdings of investments in private real estate, venture capital, buyout, mezzanine or subordinated debt, restructuring or distressed debt, and special situations through funds managed by third-party investment managers. These investments generally involve a three-to-four-year period where the investor contributes capital, followed by a period of distribution, typically over several years. The investment period is generally, at a minimum, 10 years or longer. The NDT had unfunded commitments related to private equity limited partnerships of $436 million, private real assets of $136 million, and private credit of $142 million at March 31, 2026. The ART had unfunded commitments related to limited partnerships in private equity of $184 million, private real assets of $86 million, and private credit of $71 million at March 31, 2026. These investments have no redemption or limited redemption options and may also impose restrictions on the NDT's and ART's ability to liquidate their investments. There are no readily available quoted exchange prices for these investments. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. TVA's private equity limited partnerships, private real asset investments, and private credit investments are valued at net asset values ("NAV") as a practical expedient for fair value. TVA classifies its interest in these types of investments as investments measured at NAV in the fair value hierarchy.

Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held by the NDT, ART, SERP, DCP, and RP consist of either a single class of securities, such as equity, debt, or foreign currency securities, or multiple classes of securities. All underlying positions in these commingled funds are either exchange traded or measured using observable inputs for similar instruments. The fair value of commingled funds is based on NAV per fund share (the unit of account), derived from the prices of the underlying securities in the funds. These commingled funds can be redeemed at the measurement date NAV and are classified as Commingled funds measured at NAV in the fair value hierarchy.

Realized and unrealized gains and losses on equity and trading debt securities are recognized in current earnings and are based on average cost. The gains and losses of the NDT and ART are subsequently reclassified to a regulatory asset or liability account in accordance with TVA's regulatory accounting policy. See Note 1 — *Summary of Significant Accounting Policies* of the Notes to Consolidated Financial Statements in the Annual Report and Note 9 — *Regulatory Assets and Liabilities*. TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) | **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) | **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) | **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) | **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) | **Unrealized Investment Gains (Losses)**<sup>(1)</sup><br>(in millions) |
| | | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| **Fund** | **Financial Statement Presentation** | **2026** | **2025** | **2026** | **2025** |
| NDT | Regulatory assets<sup>(2)</sup> | $(46) | $8 | $8 | $(67) |
| ART | Regulatory assets<sup>(3)</sup> | (23) | (8) | 3 | (28) |
| SERP | Other income (expense), net | (2) |  | (3) | (6) |
| DCP | Other income (expense), net |  | (1) | (1) | (2) |

---

<u>Notes</u>

(1) The unrealized losses for the RP were less than $1 million for both the three and six months ended March 31, 2026 and the three and six months ended March 31, 2025, and therefore were not represented in the table above.

(2) Includes $22 million and $33 million of unrealized losses related to NDT equity securities (excluding commingled funds) for the three months ended March 31, 2026 and 2025, respectively. Includes $13 million and $61 million of unrealized losses related to NDT equity securities (excluding commingled funds) for the six months ended March 31, 2026 and 2025, respectively.

(3) Includes $3 million and $6 million of unrealized losses related to ART equity securities (excluding commingled funds) for the three months ended March 31, 2026 and 2025, respectively. Includes less than $1 million of unrealized gains and $14 million of unrealized losses related to ART equity securities (excluding commingled funds) for the six months ended March 31, 2026 and 2025, respectively.

*Currency and Interest Rate Swap Derivatives*

See Note 14 — *Risk Management Activities and Derivative Transactions* — *Cash Flow Hedging Strategy for Currency Swaps* and — *Derivatives Not Receiving Hedge Accounting Treatment* for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments.

*Commodity Contract Derivatives and Commodity Derivatives under the FHP*

*Commodity Contract Derivatives.* Most of these derivative contracts are valued based on market approaches, which utilize short-term and mid-term market-quoted prices from an external industry brokerage service. These contracts are classified as Level 2 valuations.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Commodity Derivatives under the FHP.* Swap contracts are valued using a pricing model based on New York Mercantile Exchange inputs and are subject to nonperformance risk outside of the exit price. These contracts are classified as Level 2 valuations.

See Note 14 — *Risk Management Activities and Derivative Transactions* — *Derivatives Not Receiving Hedge Accounting Treatment* — *Commodity Contract Derivatives* and — *Commodity Derivatives under the FHP*.

*Nonperformance Risk*

The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market.

Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs"). TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the counterparty. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2025) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. The application of CVAs resulted in a less than $1 million decrease in the fair value of assets and a $2 million decrease in the fair value of liabilities at March 31, 2026.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Fair Value Measurements*

The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2026, and September 30, 2025. Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TVA's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the determination of the fair value of the assets and liabilities and their classification in the fair value hierarchy levels.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair Value Measurements<br>At March 31, 2026**<br> (in millions) | **Fair Value Measurements<br>At March 31, 2026**<br> (in millions) | **Fair Value Measurements<br>At March 31, 2026**<br> (in millions) | **Fair Value Measurements<br>At March 31, 2026**<br> (in millions) | **Fair Value Measurements<br>At March 31, 2026**<br> (in millions) |
| | **Quoted Prices in Active<br> Markets for<br>Identical Assets<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** | **Total** |
| **Assets** | | | | |
| Investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Equity securities | $844 | $— | $— | $844 |
| &nbsp;&nbsp;&nbsp;Government debt securities<sup>(1)(2)</sup> | 456 | 62 |  | 518 |
| &nbsp;&nbsp;&nbsp;Corporate debt securities<sup>(3)</sup> |  | 431 |  | 431 |
| &nbsp;&nbsp;&nbsp;Mortgage and asset-backed securities |  | 48 |  | 48 |
| &nbsp;&nbsp;&nbsp;Institutional mutual funds | 356 |  |  | 356 |
| &nbsp;&nbsp;&nbsp;Forward debt securities contracts |  | 15 |  | 15 |
| &nbsp;&nbsp;&nbsp;Cash equivalents and other short-term investments<sup>(2)(4)</sup> | 92 | 162 |  | 254 |
| &nbsp;&nbsp;&nbsp;Private equity funds measured at net asset value<sup>(5)</sup> |  |  |  | 898 |
| &nbsp;&nbsp;&nbsp;Private real asset funds measured at net asset value<sup>(5)</sup> |  |  |  | 465 |
| &nbsp;&nbsp;&nbsp;Private credit funds measured at net asset value<sup>(5)</sup> |  |  |  | 292 |
| &nbsp;&nbsp;&nbsp;Commingled funds measured at net asset value<sup>(5)</sup> |  |  |  | 1544 |
| Total investments | 1748 | 718 |  | 5665 |
| Commodity contract derivatives |  | 18 |  | 18 |
| Commodity derivatives under the FHP |  | 1 |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1748 | $737 | $— | $5684 |
|  | **Quoted Prices in Active<br> Markets for<br>Identical Liabilities<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** | **Total** |
| **Liabilities** |  |  |  |  |
| Currency swaps<sup>(6)</sup> | $— | $125 | $— | $125 |
| Interest rate swaps |  | 647 |  | 647 |
| Commodity contract derivatives |  | 10 |  | 10 |
| Commodity derivatives under the FHP |  | 106 |  | 106 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $888 | $— | $888 |

---

<u>Notes</u>

(1) Includes obligations of government-sponsored entities.

(2) There are $456 million of U.S. Treasury securities in Level 1 Government debt securities and $92 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $548 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

(3) Includes both U.S. and foreign debt.

(4) Includes $20 million of net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $56 million of repurchase agreements in Level 2 Cash equivalents and other short-term investments.

(5) Certain investments that are measured at fair value using the NAV or its equivalent (alternative investments) have not been categorized in the fair value hierarchy. The inputs to these fair value measurements include underlying NAVs, discounted cash flow valuations, comparable market valuations, estimated benchmark yields, and adjustments for currency, credit, liquidity, and other risks. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(6) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 14 — *Risk Management Activities and Derivative Transactions* — *Offsetting of Derivative Assets and Liabilities*.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair Value Measurements<br>At September 30, 2025**<br> (in millions) | **Fair Value Measurements<br>At September 30, 2025**<br> (in millions) | **Fair Value Measurements<br>At September 30, 2025**<br> (in millions) | **Fair Value Measurements<br>At September 30, 2025**<br> (in millions) | **Fair Value Measurements<br>At September 30, 2025**<br> (in millions) |
| | **Quoted Prices in Active<br> Markets for<br>Identical Assets<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** | **Total** |
| **Assets** | | | | |
| Investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Equity securities | $844 | $— | $— | $844 |
| &nbsp;&nbsp;&nbsp;Government debt securities<sup>(1)(2)</sup> | 423 | 50 |  | 473 |
| &nbsp;&nbsp;&nbsp;Corporate debt securities<sup>(3)</sup> |  | 411 |  | 411 |
| &nbsp;&nbsp;&nbsp;Mortgage and asset-backed securities |  | 40 |  | 40 |
| &nbsp;&nbsp;&nbsp;Institutional mutual funds | 367 |  |  | 367 |
| &nbsp;&nbsp;&nbsp;Forward debt securities contracts |  | 16 |  | 16 |
| &nbsp;&nbsp;&nbsp;Cash equivalents and other short-term investments<sup>(2)(4)</sup> | 111 | 163 |  | 274 |
| &nbsp;&nbsp;&nbsp;Private equity funds measured at net asset value<sup>(5)</sup> |  |  |  | 875 |
| &nbsp;&nbsp;&nbsp;Private real asset funds measured at net asset value<sup>(5)</sup> |  |  |  | 467 |
| &nbsp;&nbsp;&nbsp;Private credit funds measured at net asset value<sup>(5)</sup> |  |  |  | 278 |
| &nbsp;&nbsp;&nbsp;Commingled funds measured at net asset value<sup>(5)</sup> |  |  |  | 1528 |
| Total investments | 1745 | 680 |  | 5573 |
| Commodity contract derivatives |  | 16 |  | 16 |
| Commodity derivatives under the FHP |  | 8 |  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $1745 | $704 | $— | $5597 |
|  | **Quoted Prices in Active<br> Markets for<br>Identical Liabilities<br>(Level 1)** | **Significant Other<br>Observable Inputs<br>(Level 2)** | **Significant<br>Unobservable<br>Inputs<br>(Level 3)** | **Total** |
| **Liabilities** |  |  |  |  |
| Currency swaps<sup>(6)</sup> | $— | $115 | $— | $115 |
| Interest rate swaps |  | 698 |  | 698 |
| Commodity contract derivatives |  | 6 |  | 6 |
| Commodity derivatives under the FHP |  | 65 |  | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $884 | $— | $884 |

---

<u>Notes</u>

(1) Includes obligations of government-sponsored entities.

(2) There are $423 million of U.S. Treasury securities in Level 1 Government debt securities and $111 million of U.S. Treasury securities in Level 1 Cash equivalents and other short-term investments for a total of $534 million of U.S. Treasury securities within Level 1 of the fair value hierarchy.

(3) Includes both U.S. and foreign debt.

(4) Includes $60 million of net payables (interest receivable, dividends receivable, receivables for investments sold, and payables for investments purchased), and $124 million of repurchase agreements in Level 2 Cash equivalents and other short-term investments.

(5) Certain investments that are measured at fair value using the NAV or its equivalent (alternative investments) have not been categorized in the fair value hierarchy. The inputs to these fair value measurements include underlying NAVs, discounted cash flow valuations, comparable market valuations, estimated benchmark yields, and adjustments for currency, credit, liquidity, and other risks. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheets.

(6) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 14 — *Risk Management Activities and Derivative Transactions* — *Offsetting of Derivative Assets and Liabilities*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Other Financial Instruments Not Recorded at Fair Value*

<sup>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</sup>

TVA uses the methods and assumptions described below to estimate the fair value of each significant class of financial instruments. The fair value of the financial instruments held at March 31, 2026, and September 30, 2025, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated values of TVA's financial instruments not recorded at fair value at March 31, 2026, and September 30, 2025, were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) | **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) | **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) | **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) | **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) | **Estimated Values of Financial Instruments Not Recorded at Fair Value**<br> (in millions) |
| | | **At March 31, 2026** | **At March 31, 2026** | **At September 30, 2025** | **At September 30, 2025** |
| | **Valuation Classification** | **Carrying<br>Amount** | **Fair<br>Value** | **Carrying<br>Amount** | **Fair<br>Value** |
| EnergyRight<sup>®</sup> receivables, net (including current portion) | Level 2 | $57 | $58 | $57 | $57 |
| Loans and other long-term receivables, net (including current portion) | Level 2 | 106 | 99 | 86 | 80 |
| EnergyRight<sup>®</sup> financing obligations (including current portion) | Level 2 | 66 | 73 | 66 | 74 |
| Membership interests of VIEs subject to mandatory redemption (including current portion) | Level 2 | 15 | 17 | 16 | 18 |
| Long-term outstanding power bonds, net (including current maturities) | Level 2 | 20479 | 20399 | 21831 | 21967 |
| Long-term debt of VIEs, net (including current maturities) | Level 2 | 1657 | 1635 | 1681 | 1696 |

---

The carrying values of Cash and cash equivalents, Restricted cash and cash equivalents, Accounts receivable, net, and Short-term debt, net approximate their fair values.

The fair value for loans and other long-term receivables is estimated by determining the present value of future cash flows using a discount rate equal to lending rates for similar loans made to borrowers with similar credit ratings and for similar remaining maturities, where applicable. The fair value of long-term debt and membership interests of VIEs subject to mandatory redemption is estimated by determining the present value of future cash flows using current market rates for similar obligations, giving effect to credit ratings and remaining maturities.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**16. Revenue** 

*Revenue from Sales of Electricity* 

TVA's revenue from contracts with customers is primarily derived from the generation and sale of electricity to its customers and is included in Revenue from sales of electricity on the Consolidated Statements of Operations. Electricity is sold primarily to LPCs for distribution to their end-use customers. In addition, TVA sells electricity to directly served industrial companies, federal agencies, and others.

---

| | |
|:---|:---|
| **LPC sales** | Approximately 91 percent of TVA's Revenue from sales of electricity for both the three and six months ended March 31, 2026, and approximately 92 percent of TVA's Revenue from sales of electricity for both the three and six months ended March 31, 2025, was from LPCs, which then distribute the power to their customers using their own distribution systems. Power is delivered to each LPC at delivery points within the LPC's service territory. TVA recognizes revenue when the customer takes possession of the power at the delivery point. For power sales, the performance obligation to deliver power is satisfied in a series over time because the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. <br>The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Credits are designed to achieve objectives of the TVA Act and include items such as hydro preference credits for residential customers of LPCs, economic development credits to promote growth in the Tennessee Valley, wholesale bill credits to maintain long-term partnerships with LPCs, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. |
| **Directly served customers** | Directly served customers, including industrial customers, federal agencies, and other customers, take power for their own consumption. Similar to LPCs, power is delivered to a delivery point, at which time the customer takes possession and TVA recognizes revenue. For all power sales, the performance obligation to deliver power is satisfied in a series over time since the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered.<br>The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Examples of credits include items such as economic development credits to promote growth in the Tennessee Valley and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. |

---

*Other Revenue*

Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, Renewable Energy Certificate sales, and certain other ancillary goods or services.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Disaggregated Revenues*

During both the three months ended March 31, 2026 and 2025, revenues from sales of electricity were $3.5 billion and accounted for virtually all of TVA's revenues. During the six months ended March 31, 2026 and 2025, revenue from sales of electricity were $6.5 billion and $6.4 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and six months ended March 31, 2026 and 2025, are detailed in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Operating Revenues By State**<br>(in millions) | **Operating Revenues By State**<br>(in millions) | **Operating Revenues By State**<br>(in millions) | **Operating Revenues By State**<br>(in millions) | **Operating Revenues By State**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **2026** | **2025** |
| Alabama | $527 | $520 | $976 | $951 |
| Georgia | 94 | 94 | 169 | 168 |
| Kentucky | 220 | 214 | 413 | 396 |
| Mississippi | 290 | 307 | 556 | 576 |
| North Carolina | 29 | 28 | 52 | 49 |
| Tennessee | 2307 | 2298 | 4288 | 4184 |
| Virginia | 16 | 16 | 28 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subtotal | 3483 | 3477 | 6482 | 6352 |
| Off-system sales | 4 | 1 | 6 | 2 |
| Revenue capitalized during pre-commercial plant operations<sup>(1)</sup> |  | (2) |  | (2) |
| &nbsp;&nbsp;&nbsp;Revenue from sales of electricity | 3487 | 3476 | 6488 | 6352 |
| Other revenue | 59 | 56 | 107 | 100 |
| &nbsp;&nbsp;&nbsp;Total operating revenues | $3546 | $3532 | $6595 | $6452 |

---

<u>Note</u>

(1) Represents revenue capitalized during pre-commercial operations at the Johnsonville Facility for the three and six months ended March 31, 2025.

TVA's operating revenues by customer type for the three and six months ended March 31, 2026 and 2025, are detailed in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **2026** | **2025** |
| Revenue from sales of electricity |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Local power companies | $3181 | $3199 | $5917 | $5815 |
| &nbsp;&nbsp;&nbsp;Industries directly served | 267 | 245 | 503 | 475 |
| &nbsp;&nbsp;&nbsp;Federal agencies and other | 39 | 34 | 68 | 64 |
| &nbsp;&nbsp;Revenue capitalized during pre-commercial plant operations<sup>(1)</sup> |  | (2) |  | (2) |
| Revenue from sales of electricity | 3487 | 3476 | 6488 | 6352 |
| Other revenue | 59 | 56 | 107 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | $3546 | $3532 | $6595 | $6452 |

---

<u>Note</u>

(1) Represents revenue capitalized during pre-commercial operations at the Johnsonville Facility for the three and six months ended March 31, 2025.

TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. In 2019, the TVA Board approved a partnership agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts automatically renew each year and have a 20-year termination notice. The partnership arrangements can be terminated under certain circumstances, including TVA's failure to limit rate increases to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the agreements. Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. The total wholesale bill credits to LPCs participating in the Partnership Agreement were $59 million and $61 million for the three months ended March 31, 2026 and 2025, respectively. The total wholesale bill credits to LPCs participating in the Partnership Agreement were $113 million and $111 million for the six months ended March 31, 2026 and 2025, respectively. TVA provides

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

participating LPCs a flexibility option that allows them to generate or purchase up to approximately five percent of their average total hourly energy sales over a certain time period in order to meet their individual customers' needs. As of March 31, 2026, 148 LPCs had signed the Partnership Agreement with TVA, and 110 LPCs had signed a Power Supply Flexibility Agreement.

The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and six months ended March 31, 2026, and the percentage those revenues comprised of TVA's total operating revenues for the same period, are summarized in the tables below:

---

| | | | |
|:---|:---|:---|:---|
| **TVA Local Power Company Contracts**<br>**At or for the Three Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Three Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Three Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Three Months Ended March 31, 2026** |
| **Contract Arrangements**<sup>(1)</sup> | **Number of LPCs** | **Revenue from Sales of Electricity to LPCs**<br> (in millions) | **Percentage of Total Operating Revenues** |
| 20-year termination notice | 148 | $2782 | 78.5% |
| 5-year termination notice | 5 | 399 | 11.3% |
| &nbsp;&nbsp;&nbsp;Total | 153 | $3181 | 89.8% |

---

<u>Note</u>

(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with a five-year termination notice, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.

---

| | | | |
|:---|:---|:---|:---|
| **TVA Local Power Company Contracts**<br>**At or for the Six Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Six Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Six Months Ended March 31, 2026** | **TVA Local Power Company Contracts**<br>**At or for the Six Months Ended March 31, 2026** |
| **Contract Arrangements**<sup>(1)</sup> | **Number of LPCs** | **Revenue from Sales of Electricity to LPCs**<br> (in millions) | **Percentage of Total Operating Revenues** |
| 20-year termination notice | 148 | $5152 | 78.1% |
| 5-year termination notice | 5 | 765 | 11.6% |
| &nbsp;&nbsp;&nbsp;Total | 153 | $5917 | 89.7% |

---

<u>Note</u>

(1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with a five-year termination notice, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Certain LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election.

TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively. Sales to MLGW and NES accounted for seven percent and eight percent, respectively, of TVA's total operating revenues for both the six months ended March 31, 2026 and six months ended March 31, 2025.

*Contract Balances*

Contract assets represent an entity's right to consideration in exchange for goods and services that the entity has transferred to customers. TVA did not have any material contract assets at March 31, 2026.

Contract liabilities represent an entity's obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers. These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation. See *Economic Development Incentives* below and Note 11 — *Other Long-Term Liabilities* — *Long-Term Deferred Revenue*.

*Economic Development Incentives.* Under certain economic development programs, TVA offers incentives to existing and potential power customers in targeted business sectors that make multi-year commitments to invest in the Tennessee Valley. TVA records those incentives as reductions of revenue. Incentives recorded as a reduction to revenue were $76 million and $83 million for the three months ended March 31, 2026 and 2025, respectively. Incentives recorded as a reduction to revenue were $147 million and $168 million for the six months ended March 31, 2026 and 2025, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. At March 31, 2026, and September 30, 2025, the outstanding unpaid incentives were $188 million and $193 million, respectively. Incentives that have been paid out may be subject to claw back if the customer fails to meet certain program requirements.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**17. Other Income, Net** 

Income and expenses not related to TVA's operating activities are summarized in the following table:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Other Income, Net**<br>(in millions) | **Other Income, Net**<br>(in millions) | **Other Income, Net**<br>(in millions) | **Other Income, Net**<br>(in millions) | **Other Income, Net**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **2026** | **2025** |
| Interest income | $8 | $11 | $22 | $21 |
| External services | 5 | 5 | 10 | 14 |
| Gains (losses) on investments | (1) |  | 2 | (2) |
| Miscellaneous | (1) | (4) | 21 | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income, net | $11 | $12 | $55 | $29 |

---

Other income, net increased $26 million for the six months ended March 31, 2026, as compared to the same period of the prior year driven by a $25 million gain related to insurance proceeds received for the Sequoyah Nuclear Plant Unit 2 main generator failure.

**18. Supplemental Cash Flow Information** 

Construction in progress and nuclear fuel expenditures included in Accounts payable and accrued liabilities at March 31, 2026 and 2025, were $961 million and $953 million, respectively, and are excluded from the Consolidated Statements of Cash Flows for the six months ended March 31, 2026 and 2025, as non-cash investing activities. ARO project accruals included in Accounts payable and accrued liabilities at March 31, 2026 and 2025, were $45 million and $35 million, respectively, and are excluded from the Consolidated Statements of Cash Flows for the six months ended March 31, 2026 and 2025, as non-cash operating activities.

Cash flows from swap contracts that are accounted for as hedges are classified in the same category as the item being

hedged or on a basis consistent with the nature of the instrument.

**19. Benefit Plans** 

TVA sponsors a pension plan that covers most of its full-time employees hired before July 1, 2014, a qualified defined contribution plan ("401(k) plan") that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other post-employment benefits, such as workers' compensation, the SERP, and the RP. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS"), which is governed by its own board of directors.

The components of net periodic benefit cost for the three and six months ended March 31, 2026 and 2025, were as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) | **Components of Net Periodic Benefit Cost**<sup>(1)</sup><br>(in millions) |
| | **For the Three Months Ended March 31** | **For the Three Months Ended March 31** | **For the Three Months Ended March 31** | **For the Three Months Ended March 31** | **For the Six Months Ended March 31** | **For the Six Months Ended March 31** | **For the Six Months Ended March 31** | **For the Six Months Ended March 31** |
| | **Pension Benefits** | **Pension Benefits** | **Other Post-Retirement Benefits** | **Other Post-Retirement Benefits** | **Pension Benefits** | **Pension Benefits** | **Other Post-Retirement Benefits** | **Other Post-Retirement Benefits** |
|  | **2026** | **2025** | **2026** | **2025** | **2026** | **2025** | **2026** | **2025** |
| Service cost | $5 | $8 | $1 | $3 | $12 | $16 | $4 | $6 |
| Interest cost | 137 | 132 | 4 | 5 | 272 | 263 | 8 | 9 |
| Expected return on plan assets | (123) | (127) |  |  | (247) | (253) |  |  |
| Amortization of prior service credit | (23) | (23) | (5) | (5) | (45) | (45) | (9) | (9) |
| Recognized net actuarial loss (gain) | 35 | 45 |  |  | 69 | 87 | (2) |  |
| &nbsp;&nbsp;&nbsp;Total net periodic benefit cost | $31 | $35 | $— | $3 | $61 | $68 | $1 | $6 |

---

<u>Note</u> 

(1) The components of Total net periodic benefit cost other than Service cost are included in Other net periodic benefit cost on the Consolidated Statements of Operations.

TVA's minimum required pension plan contribution for 2026 is $300 million. TVA contributes $25 million per month to TVARS and as of March 31, 2026, had contributed $150 million. The remaining $150 million will be contributed by September 30, 2026. For the six months ended March 31, 2026, TVA also contributed $11 million (net of $3 million in rebates) to

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

the other post-retirement plans, and $10 million to the SERP. In addition, TVA recognized 401(k) contribution costs of $65 million for the six months ended March 31, 2026.

**20. Collaborative Arrangement**

In 2023, TVA, Ontario Power Generation, BWRX TCA sp. z.o.o., and GE Vernova Hitachi Nuclear Energy ("GVH") entered into a multi-party collaborative arrangement to advance the global deployment of the GVH BWRX-300 small modular reactor. GVH is responsible for standard design development. Under the agreement, TVA will contribute up to $93 million for design costs incurred by GVH through 2026. At the time feasibility is determined, TVA will have the right to use the design and may receive additional economic benefits.

Payments pursuant to the agreement are recorded as research and development expense, which is reflected as Operating and maintenance expense on TVA's Consolidated Statements of Operations in the period incurred. TVA recorded $1 million and $3 million of expenses related to this agreement for the three months ended March 31, 2026, and 2025, respectively. TVA recorded $2 million and $10 million of expenses related to this agreement for the six months ended March 31, 2026 and 2025, respectively. TVA also had a $6 million letter of credit posted under this arrangement at March 31, 2026.

 **21. Commitments and Contingencies** 

*Commitments*

*Lease Commitments.* During the six months ended March 31, 2026, TVA signed two battery energy storage system agreements which are expected to commence by the summer of 2029. The terms of the agreements are 20 years and capacity payments over the terms of the agreements are expected to total over $1.3 billion. Both agreements include a lease component.

*Contingencies* 

*Nuclear Insurance*. Section 170 of the Atomic Energy Act, commonly known as the Price-Anderson Act, provides a layered framework of financial protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear incident in the U.S. This financial protection consists of two layers of coverage. The primary level is private insurance underwritten by American Nuclear Insurers and provides public liability insurance coverage of $500 million for each nuclear power plant licensed to operate. If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies. Within the Secondary Financial Protection level, the licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor per incident. With TVA's seven reactors, the maximum total contingent obligation per incident is $1.2 billion. This retrospective premium is payable at a maximum rate currently set at approximately $25 million per year per nuclear incident per reactor. Currently, 95 reactors are participating in the Secondary Financial Protection program.

In the event that a nuclear incident results in public liability claims, the primary level provided by American Nuclear Insurers combined with the Secondary Financial Protection should provide up to $16.3 billion in coverage.

Federal law requires that each NRC power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing and decontaminating a reactor and its station site after an accident. TVA carries property, decommissioning liability, and decontamination liability insurance from Nuclear Electric Insurance Limited ("NEIL") and European Mutual Association for Nuclear Insurance. The limits available for a loss are up to $2.1 billion for two of TVA's nuclear sites and up to $2.8 billion for the remaining site. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $121 million.

TVA purchases accidental outage (business interruption) insurance for TVA's nuclear sites from NEIL. In the event that an accident covered by this policy takes a nuclear unit offline or keeps a nuclear unit offline, NEIL will pay TVA, after a waiting period, an indemnity (a set dollar amount per week) with a maximum indemnity of $490 million per unit. This insurance policy may require the payment of retrospective premiums up to a maximum of approximately $50 million, but only to the extent the retrospective premium is deemed necessary by the NEIL Board of Directors to pay losses unable to be covered by NEIL's surplus.

*Decommissioning Costs.* TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to nuclear generating plants, coal-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. See Note 12 — *Asset Retirement Obligations*.

<u>Nuclear Decommissioning</u>. Provision for decommissioning costs of nuclear generating units is based on options authorized by the NRC procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At March 31, 2026, $3.3 billion, representing the discounted value of future estimated nuclear decommissioning costs, was included in nuclear AROs. The actual decommissioning costs may vary from the derived estimates because of, among other things, changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements,

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

changes in technology, and changes in the cost of labor, materials, and equipment. Utilities that own and operate nuclear plants are required to use different procedures in calculating nuclear decommissioning costs under GAAP than those that are used in calculating nuclear decommissioning costs when reporting to the NRC. The two sets of procedures produce different estimates for the costs of decommissioning primarily because of differences in the underlying assumptions. TVA bases its nuclear decommissioning estimates on site-specific cost studies. The most recent study was approved and implemented in September 2022. Site-specific cost studies are updated for each of TVA's nuclear units at least every five years.

TVA maintains an NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 15 — *Fair Value Measurements* — *Investment Funds*. TVA monitors the value of its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments and additional contributions, if necessary, will be available to support decommissioning. TVA's operating nuclear power units are licensed through various dates between 2035 - 2056, depending on the unit. In December 2025, TVA extended the operating life of three units at Browns Ferry. It may also be possible to extend the operating life of other nuclear units with approval from the NRC. See Note 9 — *Regulatory Assets and Liabilities* and Note 12 — *Asset Retirement Obligations*.

<u>Non-nuclear Decommissioning</u>. At March 31, 2026, $6.2 billion, representing the discounted value of future estimated non-nuclear decommissioning costs, was included in non-nuclear AROs. This decommissioning cost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. TVA updates its underlying assumptions for non-nuclear decommissioning AROs at least every five years. However, material changes in underlying assumptions that impact the amount and timing of undiscounted cash flows are continuously monitored and incorporated into ARO balances in the period identified.

TVA maintains an ART to help fund the ultimate decommissioning of its non-nuclear power assets. See Note 15 — *Fair Value Measurements* — *Investment Funds*. Estimates involved in determining if additional funding will be made to the ART include inflation rate, rate of return projections on the fund investments, and the planned use of other sources to fund decommissioning costs. See Note 9 — *Regulatory Assets and Liabilities* and Note 12 — *Asset Retirement Obligations*.

*Environmental Matters.* TVA's generation activities, like those across the utility industry and in other industrial sectors, are subject to federal, state, and local environmental laws and regulations. Major areas of regulation affecting TVA's activities include air quality control, greenhouse gas ("GHG") emissions, water quality control, and management and disposal of solid and hazardous wastes. Regulations in these major areas continue to evolve.

TVA has incurred, and expects to continue to incur, substantial capital and operating and maintenance costs to comply with evolving environmental requirements primarily associated with, but not limited to, the operation of TVA's coal-fired and natural gas-fired generating units in general and emissions of pollutants from those units. Failure to comply with environmental and safety requirements can result in enforcement actions and litigation, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or temporary or permanent closure of non-compliant facilities*.* Historical non-compliance can also lead to difficulty in renewing existing permits, as well as difficulty in obtaining permits to bring new generation facilities online. Other obstacles to renewal or permitting of new facilities include a proliferation of non-government organizations seeking to use litigation tools to drive up costs associated with, and delay or prevent permitting of, new fossil fuel facilities and related infrastructure in favor of renewable energy projects.

Compliance with the EPA 2015 CCR Rule, as revised ("2015 CCR Rule") requires implementation of a groundwater monitoring program, additional engineering, evaluation of authorized closure methods, coordination with certain state authorities, and ongoing monitoring and analysis at each TVA CCR unit. As further analyses are performed, including evaluation of monitoring results, there is the potential for additional costs for investigation, closure, and/or remediation. In addition, on May 8, 2024, EPA published its Legacy CCR Rule, which expanded the scope of the existing regulatory requirements of the 2015 CCR Rule to include two additional classes of CCR units: Legacy Surface Impoundments and Coal Combustion Residuals Management Units. As a result of the enactment of the final rule, during 2024, TVA recorded additional estimated AROs and recorded a corresponding regulatory asset due to AROs being associated with closed sites and asset retirement costs having been fully depreciated. However, the amounts recorded are subject to various uncertainties, and actual amounts may differ materially based upon a number of factors, including, but not limited to, the outcome of legal challenges to the Legacy CCR Rule, ongoing evaluations of the number and scope of newly regulated units, determinations on final closure requirements and performance standards, and possible changes to the Legacy CCR Rule by EPA. See Note 12 — *Asset Retirement Obligations.*

In May 2024, EPA also published (1) a final rule that establishes more stringent technology-based effluent limitations for four wastewater streams from coal-fired plants, (2) a rule that strengthens and updates the Mercury and Air Toxics Standards for electric generating units to reflect recent developments in control technologies, and (3) a rule that establishes GHG emission guidelines for existing coal-fired plants and GHG performance standards for new natural gas-fired power plants. These rules are all currently being reconsidered by EPA and are also all subject to legal challenges. If these rules move forward as written and the challenges are not successful, TVA would incur substantial costs to comply with the rules.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

On March 12, 2025, the EPA Administrator announced that EPA will reconsider 31 rules, including (1) regulations on power plants, (2) Mercury and Air Toxics Standards, (3) steam electric effluent limitation guidelines ("ELG"), (4) National Ambient Air Quality Standards for particulate matter, (5) regulations regarding regional haze, (6) the Good Neighbor Plan, and (7) CCR regulations.

On December 31, 2025, EPA published a final ELG deadline extensions rule that extends certain compliance deadlines in the 2024 ELG rule and provides authority to state permitting authorities to extend other compliance deadlines in the 2020 and 2024 ELG rules. This rule provides TVA with greater flexibility with its coal-fired plants to meet future generation and reliability requirements.

On February 10, 2026, EPA published a final rule that extended key compliance deadlines for the Legacy CCR Rule. TVA recorded a decrease of $146 million to the ARO liability as a result of the enactment of the final rule.

On February 24, 2026, EPA published the repeal of the 2024 MATS Rule, and TVA is currently evaluating how the repeal of this rule will impact its operations.

In addition, on April 13, 2026, EPA issued a proposed rule that would revise existing federal CCR regulations. Specifically, EPA proposed, among other things, changes to the regulations that could authorize permitting authorities to approve alternative closure standards, timelines, methods, and points of compliance.

Liability for releases, natural resource damages, and required cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), and other federal and parallel state statutes. In a manner similar to many other governmental entities, industries, and power systems, TVA has generated or used hazardous substances over the years. TVA operations at some facilities have resulted in releases of contaminants that TVA has addressed or is addressing consistent with state and federal requirements. At March 31, 2026, and September 30, 2025, TVA's estimated liability for required cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was $4 million and $8 million, respectively, on a non-discounted basis and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Additionally, the potential inclusion of new hazardous substances under CERCLA and RCRA jurisdiction could significantly affect TVA's future liability for remediating historical releases.

In August 2015, the Tennessee Department of Environment and Conservation ("TDEC") issued an order that includes an iterative process through which TVA and TDEC will identify and evaluate any CCR contamination risks and, if necessary, respond to such risks. TVA is also following a similar process pursuant to a consent order. At March 31, 2026, and September 30, 2025, TVA's estimated liability for costs associated with environmental remediation activities for the sites covered by these orders for which sufficient information is available to develop a cost estimate was approximately $348 million and $319 million, respectively, on a non-discounted basis and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. The current estimated time frame for work related to these remediation activities for which TVA has a cost estimate is through 2045.

*Legal Proceedings.* From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities. There have been no material changes to the Legal Proceedings described in Note 23 — *Commitments and Contingencies* — *Legal Proceedings* of the Annual Report, except as described below.

<u>Case Involving Kingston Gas-Fired Plant</u>. On October 10, 2024, Appalachian Voices, the Center for Biological Diversity,

and the Sierra Club filed a lawsuit in the United States District Court for the Eastern District of Tennessee alleging that TVA

violated the National Environmental Policy Act and TVA's least-cost planning obligations in deciding to build a gas plant at its

Kingston site. On November 13, 2025, the court ordered TVA to supplement the administrative record, and TVA has provided the

supplemental information to the plaintiffs in accordance with the court's order. On January 23, 2026, the plaintiffs filed a motion

for summary judgment, and on March 9, 2026, TVA filed its cross motion for summary judgment. On April 24, 2026, briefing on the parties' motions for summary judgment was complete, and the motions are with the court for a decision. In addition, on February 23, 2026, TVA filed a motion to stay the case or hold it in abeyance, and the court denied this motion on April 6, 2026. TVA cannot predict the outcome of this litigation. See Note 7 — *Plant Closures* for a discussion of the status of the coal units at Kingston.

<u>Challenge to Kingston Construction Permit</u>*.* On December 16, 2024, the Southern Environmental Law Center filed an

appeal on behalf of Appalachian Voices challenging the construction permit that the Technical Secretary acting on behalf of the

Tennessee Air Pollution Control Board ("Air Board") issued to TVA on November 15, 2024, for the construction of natural gas generation at Kingston. On August 20, 2025, the administrative law judge issued an order upholding the construction permit and denying Appalachian Voices' petition challenging the permit. Appalachian Voices did not appeal the initial order to the Air Board by the deadline of September 19, 2025, so the order became final. On November 18, 2025, Appalachian Voices filed a petition for judicial review of the final order in the Chancery Court of Davidson County, Tennessee, naming the Air Board, TDEC, and TVA as the respondents. TVA removed the matter to the U.S. District Court for the Middle District of Tennessee ("Middle District of

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

Tennessee") on December 18, 2025. Initially, Appalachian Voices moved to remand the case back to state court, but on April 15, 2026, Appalachian Voices replaced that motion with a motion (1) to temporarily remand the matter to the Air Board so that additional evidence of the TVA Board's February 2026 Cumberland and Kingston authorization could be presented to the Air Board and (2) to suspend the construction permit pending the presentation of the additional evidence to the Air Board. On April 29, 2026, TVA filed a response in opposition to this motion. TVA cannot predict the outcome of this litigation.

<u>Case Involving Cumberland Combined Cycle Plant</u>*.* On June 14, 2023, Appalachian Voices, the Center for Biological Diversity, and the Sierra Club filed a lawsuit in the Middle District of Tennessee alleging that TVA violated NEPA in deciding to build a 1,450 MW combined cycle plant at its Cumberland facility. On April 17, 2026, the parties agreed to dismiss the case, and on April 20, 2026, the court approved the dismissal and closed the case.

**22. Segment Reporting**

TVA operates as a single reportable segment that includes the generation, transmission, and sale of electricity throughout the Tennessee Valley. Revenue is primarily derived from wholesale electricity sales to LPCs and directly served customers. TVA's CEO serves as the CODM. The CODM uses net income in the annual planning process and to monitor budget versus actual results on a monthly basis in assessing financial performance and in determining how to allocate resources.

The following table includes operating revenues, expenses, and net income as regularly provided to the CODM, which align directly to the amounts presented in TVA's Consolidated Statements of Operations. As the segment measure used by the CODM is net income, no reconciliation is necessary.

---

| | | | | |
|:---|:---|:---|:---|:---|
| 1 | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
| 1 | **2026** | **2025**<sup>(3)</sup> | **2026** | **2025**<sup>(3)</sup> |
| Base revenue | $2358 | $2428 | $4555 | $4473 |
| Fuel revenue | 1125 | 1049 | 1927 | 1879 |
| Other revenue | 59 | 56 | 107 | 100 |
| Off-system sales | 4 | 1 | 6 | 2 |
| Revenue capitalized during pre-commercial plant operations<sup>(1)</sup> |  | (2) |  | (2) |
| &nbsp;&nbsp;&nbsp;**Total operating revenue** | 3546 | 3532 | 6595 | 6452 |
| Fuel | 683 | 580 | 1197 | 1085 |
| Purchased power | 588 | 572 | 998 | 966 |
| Operating and maintenance | 882 | 944 | 1731 | 1849 |
| Depreciation and amortization | 511 | 562 | 1082 | 1119 |
| Interest expense | 308 | 293 | 617 | 573 |
| Tax equivalents | 168 | 158 | 321 | 304 |
| Other segment items<sup>(2)</sup> | 14 | 15 | (9) | 23 |
| &nbsp;&nbsp;&nbsp;**Total expenses, net** | 3154 | 3124 | 5937 | 5919 |
| &nbsp;&nbsp;&nbsp;**Net income** | $392 | $408 | $658 | $533 |

---

<u>Notes</u>

(1) Represents revenue capitalized during pre-commercial operations at the Johnsonville Facility for the three and six months ended March 31, 2025.

(2) Other segment items include non-utility related miscellaneous income and expenses, pension and post-retirement benefit costs, and interest income.

(3) Prior period amounts have been reclassified to conform to the current period presentation resulting from the retrospective adoption of ASU 2023-07, *Segment Reporting.* Expanded segment disclosures were not required in the comparative periods presented because the company operated, and continues to operate, as a single reportable segment for which detailed segment expense disclosures were not previously required.

Segment asset information is not presented, as it is not regularly reviewed by the CODM. The CODM evaluates capital planning and resource allocation on a consolidated basis which is presented in TVA's Consolidated Balance Sheet.

Capital expenditures were $897 million and $1.1 billion for the three months ended March 31, 2026 and 2025, respectively. Capital expenditures were $2.0 billion and $2.6 billion for the six months ended March 31, 2026 and 2025, respectively.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

The Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") explains the results of operations and general financial condition of the Tennessee Valley Authority ("TVA"). The MD&A should be read in conjunction with the accompanying unaudited consolidated financial statements and TVA's Annual Report on Form 10-K for the year ended September 30, 2025 (the "Annual Report").

**Executive Overview**

TVA's operating revenues were $6.6 billion and $6.5 billion for the six months ended March 31, 2026 and 2025, respectively. Operating revenues increased for the six months ended March 31, 2026, as compared to the same period of the prior year, primarily as a result of higher sales volume and higher fuel cost recovery rates. The increased sales volume was primarily driven by higher sales within the data processing, hosting, and related services sector. Higher fuel cost recovery rates were due primarily to higher fuel rates as a result of higher natural gas prices as compared to the same period of the prior year.

Total operating expenses increased $6 million for the six months ended March 31, 2026, as compared to the six months ended March 31, 2025. Fuel and purchased power expense increased $144 million for the six months ended March 31, 2026, as compared to the same period of the prior year primarily due to higher purchased power market prices and higher effective fuel rates as a result of higher natural gas prices, partially offset by reduced purchased power expense due to higher levels of TVA generation as compared to the same period of the prior year. Partially offsetting this increase was a $118 million decrease in Operating and maintenance expense for the six months ended March 31, 2026, as compared to the same period of the prior year primarily due to Inflation Reduction Act of 2022 ("IRA") tax credits recorded in the six months ended March 31, 2026, and decreases in payroll and benefit costs. In addition, Depreciation and amortization expense decreased by $37 million primarily due to the Browns Ferry Nuclear Plant ("Browns Ferry") subsequent license renewal ("SLR") and the depreciable life assumptions for the Kingston and Cumberland Fossil Plants. These decreases in Depreciation and amortization expense were partially offset by an increase due to depreciation of additions to net completed plant.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**Results of Operations** 

*Sales of Electricity*

Sales of electricity were 41,966 million and 42,745 million kilowatt hours ("kWh") for the three months ended March 31, 2026 and 2025, respectively. Sales of electricity were 81,543 million and 80,776 million kWh for the six months ended March 31, 2026 and 2025, respectively. The total sales of electricity during the six months ended March 31, 2025 included 59 thousand kWh of pre-commercial generation at the Johnsonville Aeroderivative Combustion Turbine ("CT") Facility ("Johnsonville Facility"), of which 49 thousand kWh was recognized in the three months ended March 31, 2025. TVA sells power at wholesale rates to local power company customers ("LPCs") that then resell the power to their customers at retail rates. TVA also sells power to directly served customers, consisting primarily of federal agencies and customers with large or nonstandard loads. In addition, power exceeding TVA's system needs is sold under exchange power arrangements with certain other power systems.

The following charts compare TVA's sales of electricity by customer type for the periods indicated:

![1042](tve-20260331_g2.jpg)![1043](tve-20260331_g3.jpg)

The following charts show a breakdown of TVA's energy load:

![1106](tve-20260331_g4.jpg)![1107](tve-20260331_g5.jpg)

<u>Note</u>

Information included in the charts above was derived from energy usage of directly served customers and customers served by LPCs during calendar year ("CY") 2025, and these graphs will continue to be updated on a CY basis.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

Weather affects both the demand for TVA power and the price for that power. TVA uses degree days to measure the impact of weather on its power operations. Degree days measure the extent to which the TVA system 23-station average temperatures vary from 65 degrees Fahrenheit.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Degree Days** | **Degree Days** | **Degree Days** | **Degree Days** | **Degree Days** | **Degree Days** | | |
| | **Variation from Normal** | **Variation from Normal** | **Variation from Normal** | **Variation from Normal** | **Variation from Normal** | **Variation from Normal** | **Change from Prior Period** | **Change from Prior Period** |
| | **2026** | **Normal** | **Percent Variation** | **2025** | **Normal** | **Percent Variation** | **Change** | **Percent Change** |
| **Heating Degree Days** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Three Months Ended March 31 | 1560 | 1689 | (7.6)% | 1761 | 1689 | 4.3% | (201) | (11.4)% |
| &nbsp;&nbsp;&nbsp;Six Months Ended March 31 | 2710 | 2932 | (7.6)% | 2743 | 2932 | (6.4)% | (33) | (1.2)% |
| **Cooling Degree Days** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Three Months Ended March 31 | 49 | 10 | 390.0% | 12 | 10 | 20.0% | 37 | 308.3% |
| &nbsp;&nbsp;&nbsp;Six Months Ended March 31 | 119 | 71 | 67.6% | 101 | 71 | 42.3% | 18 | 17.8% |

---

Sales of electricity decreased two percent for the three months ended March 31, 2026, as compared to the same period of the prior year. For the three months ended March 31, 2026, weather conditions were milder as compared to the same period of the prior year, which resulted in an 11 percent decrease in heating degree days. Partially offsetting this decrease was an increase due to higher sales within the data processing, hosting, and related services sector.

Sales of electricity increased one percent for the six months ended March 31, 2026, as compared to the same period of the prior year. Sales volume increased primarily due to higher sales within the data processing, hosting, and related services sector.

*Financial Results*

The following table compares operating results for the three and six months ended March 31, 2026 and 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) | **Summary Consolidated Statements of Operations**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **Change** | **Percent Change** | **2026** | **2025** | **Change** | **Percent Change** |
| Operating revenues | $3546 | $3532 | $14 | 0.4% | $6595 | $6452 | $143 | 2.2% |
| Operating expenses | 2832 | 2816 | 16 | 0.6% | 5329 | 5323 | 6 | 0.1% |
| Operating income | 714 | 716 | (2) | (0.3)% | 1266 | 1129 | 137 | 12.1% |
| Other income, net | 11 | 12 | (1) | (8.3)% | 55 | 29 | 26 | 89.7% |
| Other net periodic benefit cost | 25 | 27 | (2) | (7.4)% | 46 | 52 | (6) | (11.5)% |
| Interest expense | 308 | 293 | 15 | 5.1% | 617 | 573 | 44 | 7.7% |
| &nbsp;&nbsp;&nbsp;Net income | $392 | $408 | $(16) | (3.9)% | $658 | $533 | $125 | 23.5% |

---

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Operating Revenues.* Operating revenues for both the three months ended March 31, 2026 and the three months ended March 31, 2025, were $3.5 billion. Operating revenues for the six months ended March 31, 2026 and 2025, were $6.6 billion and $6.5 billion, respectively. The following table compares TVA's operating revenues for the periods indicated:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) | **Operating Revenues by Customer Type**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **Change** | **Percent Change** | **2026** | **2025** | **Change** | **Percent Change** |
| **Operating revenues** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Local power company customers | $3181 | $3199 | $(18) | (0.6)% | $5917 | $5815 | $102 | 1.8% |
| &nbsp;&nbsp;Industries directly served | 267 | 245 | 22 | 9.0% | 503 | 475 | 28 | 5.9% |
| &nbsp;&nbsp;Federal agencies and other | 39 | 34 | 5 | 14.7% | 68 | 64 | 4 | 6.3% |
| &nbsp;&nbsp;Revenue capitalized during pre-commercial plant operations<sup>(1)</sup> |  | (2) | 2 | (100.0)% |  | (2) | 2 | (100.0)% |
| &nbsp;&nbsp;Other revenue | 59 | 56 | 3 | 5.4% | 107 | 100 | 7 | 7.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | $3546 | $3532 | $14 | 0.4% | $6595 | $6452 | $143 | 2.2% |

---

<u>Note</u>

(1) Represents revenue capitalized during pre-commercial operations at the Johnsonville Facility for the three and six months ended March 31, 2025.

TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively. Sales to MLGW and NES accounted for seven percent and eight percent, respectively, of TVA's total operating revenues for both the six months ended March 31, 2026 and the six months ended March 31, 2025.

TVA's rate structure uses pricing signals to indicate seasons and hours of higher cost to serve its customers and to capture a portion of TVA's fixed costs in fixed charges. The structure includes three base revenue components: time of use demand charges, time of use energy charges, and a grid access charge ("GAC"). The demand charges are based upon the customer's peak monthly usage. The energy charges are based on time differentiated kWh used by the customer. Both of these components can be significantly impacted by weather. The GAC captures a portion of fixed costs and is offset by a corresponding reduction to the energy rates. The GAC also reduces the impact of weather variability to the overall rate structure.

&nbsp;&nbsp;&nbsp;&nbsp;

TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts automatically renew each year and have a 20-year termination notice. The partnership arrangements can be terminated under certain circumstances, including TVA's failure to limit rate increases to no more than 10 percent during any consecutive five-fiscal-year period, as more specifically described in the agreements. Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. As of March 31, 2026, 148 LPCs had signed the 20-year Partnership Agreement with TVA.

&nbsp;&nbsp;&nbsp;&nbsp;

In addition to base revenues, the rate structure includes a separate fuel rate that includes the costs of natural gas, fuel oil, purchased power, coal, emission allowances, nuclear fuel, and other fuel-related commodities; realized gains and losses on derivatives purchased to hedge the costs of such commodities; and payments to states and counties in lieu of taxes ("tax equivalents") associated with the fuel cost adjustments.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

The changes in revenue components are summarized below:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) | **Changes in Revenue Components**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **Change** | **2026** | **2025** | **Change** |
| **Base revenue** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Energy revenue | $1365 | $1403 | $(38) | $2602 | $2591 | $11 |
| &nbsp;&nbsp;&nbsp;Demand revenue | 1092 | 1120 | (28) | 2103 | 2025 | 78 |
| &nbsp;&nbsp;&nbsp;Grid access charge | 162 | 162 |  | 324 | 324 |  |
| &nbsp;&nbsp;&nbsp;Long-term partnership credits for LPCs | (59) | (61) | 2 | (113) | (111) | (2) |
| &nbsp;&nbsp;Other charges and credits<sup>(1)</sup> | (202) | (196) | (6) | (361) | (356) | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total base revenue** | 2358 | 2428 | (70) | 4555 | 4473 | 82 |
| Fuel cost recovery | 1125 | 1049 | 76 | 1927 | 1879 | 48 |
| Off-system sales | 4 | 1 | 3 | 6 | 2 | 4 |
| Revenue capitalized during pre-commercial plant operations<sup>(2)</sup> |  | (2) | 2 |  | (2) | 2 |
| &nbsp;&nbsp;&nbsp;**Revenue from sales of electricity** | 3487 | 3476 | 11 | 6488 | 6352 | 136 |
| Other revenue | 59 | 56 | 3 | 107 | 100 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | $3546 | $3532 | $14 | $6595 | $6452 | $143 |

---

<u>Notes</u>

(1) Includes economic development credits to promote growth in the Tennessee Valley, hydro preference credits for residential customers of LPCs, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. See Note 16 — *Revenue.*

(2) Represents revenue capitalized during pre-commercial operations at the Johnsonville Facility for the three and six months ended March 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;

Operating revenues increased $14 million for the three months ended March 31, 2026, as compared to the same period of the prior year, primarily due to a $76 million increase in fuel cost recovery revenue driven by a $96 million increase attributable to higher fuel cost recovery rates, partially offset by a $20 million decrease attributable to lower sales volume. The higher fuel cost recovery rates were primarily due to higher natural gas prices as compared to the same period of the prior year. The increase in fuel cost recovery revenue was partially offset by a $70 million decrease in base revenue. The $70 million decrease in base revenue was driven by a $59 million decrease attributable to lower sales volume and an $11 million decrease attributable to lower effective base rates. Lower sales volume was driven by weather conditions that were milder as compared to the same period of the prior year which were partially offset by higher sales within the data processing, hosting, and related services sector.

Operating revenues increased $143 million for the six months ended March 31, 2026, as compared to the same period the prior year, primarily due to a $82 million increase in base revenue. The $82 million increase in base revenue was driven by a $67 million increase attributable to higher sales volume and a $15 million increase attributable to higher effective base rates. The higher sales volume was primarily due to higher sales within the data processing, hosting, and related services sector. In addition, there was a $48 million increase in fuel cost recovery revenue. The $48 million increase in fuel cost recovery revenue was driven by a $31 million increase attributable to higher fuel rates as a result of higher natural gas prices as compared to the same period of the prior year and a $17 million increase attributable to higher sales volume.

See *Sales of Electricity* above for further discussion of the change in the volume of sales of electricity and *Operating Expenses* below for further discussion of the change in fuel expense.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Operating Expenses.* Operating expense components as a percentage of total operating expenses for the three and six months ended March 31, 2026 and 2025, consisted of the following:

![8288](tve-20260331_g6.jpg)![8289](tve-20260331_g7.jpg)

![8291](tve-20260331_g8.jpg)![8292](tve-20260331_g9.jpg)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) | **Operating Expenses**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **Change** | **Percent Change** | **2026** | **2025** | **Change** | **Percent Change** |
| **Operating expenses** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Fuel | $683 | $580 | $103 | 17.8% | $1197 | $1085 | $112 | 10.3% |
| &nbsp;&nbsp;Purchased power | 588 | 572 | 16 | 2.8% | 998 | 966 | 32 | 3.3% |
| &nbsp;&nbsp;Operating and maintenance | 882 | 944 | (62) | (6.6)% | 1731 | 1849 | (118) | (6.4)% |
| &nbsp;&nbsp;Depreciation and amortization | 511 | 562 | (51) | (9.1)% | 1082 | 1119 | (37) | (3.3)% |
| &nbsp;&nbsp;Tax equivalents | 168 | 158 | 10 | 6.3% | 321 | 304 | 17 | 5.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | $2832 | $2816 | $16 | 0.6% | $5329 | $5323 | $6 | 0.1% |

---

*Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025*

Fuel expense increased $103 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily due to an increase in effective fuel rates due to higher natural gas prices, resulting in a $115 million increase in fuel expense. Additionally, fuel expense increased $40 million due to higher levels of TVA generation as compared to the same period of the prior year. Partially offsetting these increases was a decrease of $52 million due to the deferral of significant expenses that were the result of higher than expected natural gas prices.

Purchased power expense increased $16 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily due to higher purchased power market prices compared to the same

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

period of the prior year, resulting in a $246 million increase. Partially offsetting this increase was a decrease of $196 million

due to higher levels of TVA generation as compared to the same period of the prior year. Additionally, purchased power expense decreased $34 million due to the deferral of significant expenses that were the result of higher than expected market prices.

Operating and maintenance expense decreased $62 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This decrease was driven by a $48 million decrease in payroll and benefit costs primarily due to severance costs associated with the Enterprise Transformation Program ("ETP") efforts in the three months ended March 31, 2025, and a decrease in headcount as compared to the prior year.

Depreciation and amortization expense decreased $51 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This decrease was primarily driven by a $45 million decrease in depreciation expense due to the December 2025 Browns Ferry SLR, which extended the useful life of the three nuclear units for an additional 20 years, and a $33 million decrease due to the depreciable life assumptions for the Cumberland and Kingston Fossil Plants. Partially offsetting these decreases was an increase due to depreciation of additions to net completed plant.

Tax equivalents expense increased $10 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This change is primarily driven by an increase in TVA's revenue from sales of electricity in 2025, which is used as the basis for calculating tax equivalent expense.

*Six Months Ended March 31, 2026, Compared to Six Months Ended March 31, 2025*

Fuel expense increased $112 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily due to an increase in effective fuel rates due to higher natural gas prices, resulting in a $133 million increase in fuel expense. Additionally, fuel expense increased $70 million due to higher levels of TVA generation as compared to the same period of the prior year. Partially offsetting these increases was a decrease of $91 million due to the deferral of significant expenses that were the result of higher than expected natural gas prices.

Purchased power expense increased $32 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily due to higher purchased power market prices compared to the same period of the prior year, resulting in a $299 million increase. Partially offsetting this increase was a decrease of $199 million due to higher levels of TVA generation as compared to the same period of the prior year. Additionally, purchased power expense decreased $68 million due to the deferral of significant expenses that were the result of higher than expected market prices.

Operating and maintenance expense decreased $118 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This decrease was primarily due to IRA tax credits recorded in the three months ended December 31, 2025, which contributed $62 million to the overall decrease. These credits were recognized as a reduction in Operating and maintenance expense based on what the credits were intended to reimburse. See Note 1 *— Summary of Significant Accounting Policies — Government Grants.* In addition, there was a $48 million decrease in payroll and benefit costs primarily due to severance costs associated with the ETP efforts in the six months ended March 31, 2025, and a decrease in headcount as compared to the prior year.

Depreciation and amortization expense decreased $37 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This decrease was primarily driven by a $60 million decrease in depreciation expense due to the December 2025 Browns Ferry SLR, which extended the useful life of the three nuclear units for an additional 20 years, and a $33 million decrease due to the depreciable life assumptions for the Cumberland and Kingston Fossil Plants. Partially offsetting these decreases was an increase due to depreciation of additions to net completed plant.

Tax equivalents expense increased $17 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This change is primarily driven by an increase in TVA's revenue from sales of electricity in 2025, which is used as the basis for calculating tax equivalent expense.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Generating Sources.* The following tables show TVA's generation and purchased power by generating source as a percentage of all electrical power generated and purchased (based on kWh) for the periods indicated.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total Power Supply by Generating Source**<br>For the three months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the three months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the three months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the three months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the three months ended March 31<br>(millions of kWh) |
|  | **2026** | **2026** | **2025** | **2025** |
| Nuclear | 17124 | 40% | 11911 | 27% |
| Natural gas and/or oil-fired<sup>(1)</sup> | 10018 | 23% | 12362 | 28% |
| Coal-fired | 6438 | 15% | 6282 | 15% |
| Hydroelectric | 2869 | 7% | 3887 | 9% |
| &nbsp;&nbsp;Total TVA-operated generation facilities<sup>(2)(3)</sup> | 36449 | 85% | 34442 | 79% |
| Purchased power (natural gas and/or oil-fired)<sup>(4)</sup> | 2986 | 7% | 4789 | 11% |
| Purchased power (wind)<sup>(5)</sup> | 1094 | 3% | 1125 | 3% |
| Purchased power (other renewables)<sup>(6)</sup> | 950 | 2% | 637 | 1% |
| Purchased power (coal-fired) | 814 | 2% | 1427 | 3% |
| Purchased power (hydroelectric) | 483 | 1% | 1056 | 3% |
| &nbsp;&nbsp;Total purchased power<sup>(3)</sup> | 6327 | 15% | 9034 | 21% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total power supply | 42776 | 100% | 43476 | 100% |

---

<u>Notes</u>

(1) The generation for the three months ended March 31, 2025 included 49 thousand kWh of pre-commercial generation at the Johnsonville Facility.

(2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table

above.

(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the three months ended March 31, 2026, and three months ended March 31, 2025. See Part I, Item 1, Business — *Power Supply and Load Management Resources* — *Hydroelectric Pumped-Storage* in the Annual Report for a discussion of Raccoon Mountain Pumped-Storage Plant.

(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia Combined Cycle Plant ("Caledonia CC"), which is currently a leased facility operated by TVA. Generation from Caledonia CC was 1,141 million kWh and 1,486 million kWh for the three months ended March 31, 2026, and 2025, respectively.

(5) At March 31, 2025, 1,125 megawatts ("MWs") previously classified as Purchased power (other renewables) has been reclassified to Purchased power (wind)

to conform to current year presentation.

(6) Purchased power (other renewables) includes purchased power from the following renewable sources: solar, biomass, and renewable cogeneration. TVA acquires Renewable Energy Certificates ("RECs") in connection with certain purchased power transactions and sells some of these RECs to customers.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Total Power Supply by Generating Source**<br>For the six months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the six months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the six months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the six months ended March 31<br>(millions of kWh) | **Total Power Supply by Generating Source**<br>For the six months ended March 31<br>(millions of kWh) |
|  | **2026** | **2026** | **2025** | **2025** |
| Nuclear | 33772 | 41% | 25901 | 31% |
| Natural gas and/or oil-fired<sup>(1)</sup> | 18738 | 22% | 21224 | 26% |
| Coal-fired | 11878 | 14% | 11618 | 14% |
| Hydroelectric | 5530 | 7% | 7246 | 9% |
| &nbsp;&nbsp;Total TVA-operated generation facilities<sup>(2)(3)</sup> | 69918 | 84% | 65989 | 80% |
| Purchased power (natural gas and/or oil-fired)<sup>(4)</sup> | 6139 | 7% | 8830 | 11% |
| Purchased power (coal-fired) | 2213 | 3% | 2361 | 3% |
| Purchased power (wind)<sup>(5)</sup> | 2001 | 3% | 2149 | 3% |
| Purchased power (other renewables)<sup>(6)</sup> | 1703 | 2% | 1218 | 1% |
| Purchased power (hydroelectric) | 1056 | 1% | 1713 | 2% |
| &nbsp;&nbsp;Total purchased power<sup>(3)</sup> | 13112 | 16% | 16271 | 20% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total power supply | 83030 | 100% | 82260 | 100% |

---

<u>Notes</u>

(1) The generation for the six months ended March 31, 2025 included 59 thousand kWh of pre-commercial generation at the Johnsonville Facility.

(2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table

above.

(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the six months ended March 31, 2026, and six months ended March 31, 2025. See Part I, Item 1, Business — *Power Supply and Load Management Resources* — *Hydroelectric Pumped-Storage* in the Annual Report for a discussion of Raccoon Mountain Pumped-Storage Plant.

(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia CC, which is currently a leased facility operated by TVA. Generation from Caledonia CC was 2,161 million kWh and 2,724 million kWh for the six months ended March 31, 2026, and 2025, respectively.

(5) At March 31, 2025, 2,149 MWs previously classified as Purchased power (other renewables) has been reclassified to Purchased power (wind)

to conform to current year presentation.

(6) Purchased power (other renewables) includes purchased power from the following renewable sources: solar, biomass, and renewable cogeneration. TVA

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.

In addition to power supply sources included here, TVA offers energy efficiency programs that effectively reduce energy needs. In 2026, TVA expects to invest $133 million on its energy efficiency programs and anticipates approximately 400 gigawatt hours of net incremental energy efficiency savings. During the three and six months ended March 31, 2026, TVA invested $55 million and $82 million on energy efficiency programs, respectively.

*Interest Expense*. Interest expense and interest rates for the three and six months ended March 31, 2026, and the three and six months ended March 31, 2025, were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) | **Interest Expense and Rates**<br>(in millions) |
| | **Three Months Ended March 31** | **Three Months Ended March 31** | **Three Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** | **Six Months Ended March 31** |
|  | **2026** | **2025** | **Percent<br> Change** | **2026** | **2025** | **Percent<br> Change** |
| Interest expense<sup>(1)</sup> | $308 | $293 | 5.1% | $617 | $573 | 7.7% |
| Average blended debt balance<sup>(2)</sup> | $23583 | $22527 | 4.7% | $23495 | $22018 | 6.7% |
| Average blended interest rate<sup>(3)</sup> | 5.04% | 4.97% | 1.4% | 5.07% | 4.98% | 1.8% |

---

<u>Notes</u>

(1) Includes amortization of debt discounts, issuance, and reacquisition costs, net.

(2) Includes average balances of long-term power bonds, debt of variable interest entities ("VIEs"), and discount notes.

(3) Includes interest on long-term power bonds, debt of VIEs, and discount notes.

Total interest expense increased $15 million for the three months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily driven by a $16 million increase from higher average balances and rates on long-term debt and a $3 million increase in interest from higher average balances on short-term debt. This increase was partially offset by lower interest on short-term debt primarily due to lower rates.

Total interest expense increased $44 million for the six months ended March 31, 2026, as compared to the same period of the prior year. This increase was primarily driven by a $49 million increase from higher average balances and rates on long-term debt and a $2 million increase in interest from higher average balances on short-term debt. This increase was partially offset by lower interest on short-term debt primarily due to lower rates.

**Liquidity and Capital Resources** 

*Sources of Liquidity*

TVA depends on various sources of liquidity to meet cash needs and contingencies. TVA's primary sources of liquidity are cash from operations and proceeds from the issuance of short-term debt in the form of discount notes, along with periodic issuances of long-term debt. TVA's balance of short-term debt typically changes frequently as TVA issues discount notes to meet short-term cash needs and pay scheduled maturities of discount notes and long-term debt. TVA's next significant power bond maturity is $1.0 billion in February 2027. The periodic amounts of short-term debt issued are determined by near-term expectations for cash receipts, cash expenditures, and funding needs, while seeking to maintain a target range of cash and cash equivalents on hand. TVA may hold higher cash balances from time to time in response to potential market volatility or other business conditions. In addition, cash balances may include collateral received from counterparties.

In addition to cash from operations and proceeds from the issuance of short-term and long-term debt, TVA's other sources of potential liquidity include three revolving credit facilities totaling $2.5 billion, a $150 million credit facility with the United States Department of the Treasury ("U.S. Treasury"), and proceeds from other financings. See Note 13 *— Debt and Other Obligations* — *Credit Facility Agreements.* The TVA Board of Directors ("TVA Board") authorized TVA to issue power bonds and enter into other financing arrangements in an aggregate amount not to exceed $3.0 billion during 2026. Other financing arrangements may include, but are not limited to, lease financings, transactions supported by certain PPAs, energy prepayments from customers, and other similar agreements. TVA may also engage from time to time in other alternative forms of financing such as sales of receivables or loans.

The Tennessee Valley Authority Act of 1933, as amended ("TVA Act"), authorizes TVA to issue bonds, notes, or other evidences of indebtedness (collectively, "Bonds") in an amount not to exceed $30.0 billion outstanding at any time. Bonds outstanding, excluding unamortized discounts and premiums and net exchange gains from foreign currency transactions, at March 31, 2026, were $22.1 billion (including current maturities). The balance of Bonds outstanding directly affects TVA's capacity to meet operational liquidity needs and to strategically use Bonds to fund certain capital investments as management and the TVA Board may deem desirable. Other options for financing not subject to the limit on Bonds could provide supplementary funding if needed. Currently, TVA expects to utilize a combination of Bonds, other financings, or potentially

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

additional power revenues through power rate increases to meet its ongoing operational liquidity needs while making planned capital investments. TVA may also receive funding by filing for credits available under the IRA, by applying for grants or other funding available under the Bipartisan Infrastructure Law ("BIL"), from other federal funding opportunities, or from other third- party financing arrangements. See *Lease Financings* below, *Key Initiatives and Challenges — Funding Opportunities,* Note 10 *— Variable Interest Entities*, and Note 13 *— Debt and Other Obligations* for additional information.

TVA may from time to time seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for securities, in open market purchases, in privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, TVA's liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

*Debt Securities*. TVA's Bonds are not obligations of the U.S., and the U.S. does not guarantee the payments of principal or interest on Bonds. TVA's Bonds consist of power bonds and discount notes. Power bonds have maturities of between one and 50 years. At March 31, 2026, the average maturity of long-term power bonds was 14.22 years, and the weighted average interest rate was 4.74 percent. Discount notes have maturities of less than one year. Power bonds and discount notes have a first priority and equal claim of payment out of net power proceeds. Net power proceeds are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalents, but 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. In addition to power bonds and discount notes, TVA had long-term debt associated with certain VIEs outstanding at March 31, 2026. See *Lease Financings* below, Note 10 *— Variable Interest Entities*, and Note 13 *— Debt and Other Obligations* for additional information.

The following table provides additional information regarding TVA's short-term borrowings:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) | **Short-Term Borrowings**<br>(in millions) |
| | **At March 31, 2026** | **Three Months Ended March 31, 2026** | **Six Months Ended March 31, 2026** | **At March 31, 2025** | **Three Months Ended March 31, 2025** | **Six Months Ended March 31, 2025** |
| **Gross Amount Outstanding (at End of Period) or Average Gross Amount Outstanding (During Period)** | | | | | | |
| Discount notes | $1350 | $1184 | $867 | $351 | $683 | $760 |
| **Maximum Month-End Gross Amount Outstanding (During Period)** |  |  |  |  |  |  |
| Discount notes | N/A | $1399 | $1399 | N/A | $1359 | $1541 |
| **Weighted Average Interest Rate** |  |  |  |  |  |  |
| Discount notes | 3.64% | 3.63% | 3.73% | 4.25% | 4.16% | 4.39% |

---

TVA's rated senior unsecured Bonds are currently rated Aa1, AA+, and AA+ by Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc. ("Fitch"), and S&P Global Ratings ("S&P"), respectively. TVA's short-term discount notes are not rated. TVA and the owners of TVA securities could be impacted by any downgrades of TVA's credit ratings. TVA Bonds are not obligations of the U.S.; however, because TVA is a wholly-owned corporate agency and instrumentality of the U.S. government, TVA's ratings may be impacted if the sovereign credit ratings of the U.S. are downgraded. See Part I, Item 1A, Risk Factors *— Financial, Economic, and Market Risks — TVA, together with owners of TVA securities, may be impacted by downgrades of TVA's credit ratings* in the Annual Report.

*Lease Financings*. TVA has entered into certain leasing transactions with special purpose entities ("SPEs") to obtain third-party financing for its facilities. These SPEs are sometimes identified as VIEs of which TVA is determined to be the primary beneficiary. TVA is required to account for these VIEs on a consolidated basis. See Note 10 — *Variable Interest Entities*.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Summary Cash Flows* 

A major source of TVA's liquidity is operating cash flows resulting from the generation and sale of electricity. Cash, cash equivalents, and restricted cash totaled $522 million and $547 million at March 31, 2026 and 2025, respectively. A summary of cash flow components for the six months ended March 31, 2026 and 2025, follows:

&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by (used in):

![7337](tve-20260331_g10.jpg)![7338](tve-20260331_g11.jpg)![7339](tve-20260331_g12.jpg)

*Operating Activities*. TVA's cash flows from operations are primarily driven by sales of electricity, fuel expense, and operating and maintenance expense. The timing and level of cash flows from operations can be affected by the weather, changes in working capital, commodity price fluctuations, outages, and other project expenses.

Net cash flows provided by operating activities decreased $355 million for the six months ended March 31, 2026, as compared to the same period of the prior year. The decrease was primarily due to higher fuel and purchased power payments, significantly fewer customer deposits, and lower customer collections as compared to the same period of the prior year. Fewer customer deposits were primarily driven by the conclusion of certain transmission studies. Lower customer collections were primarily the result of the distributor prepayment program which allowed for customers to prepay their invoices and receive interest credits. The program terminated on September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;

*Investing Activiti*es. The majority of TVA's investing cash flows are due to investments to acquire, upgrade, or maintain generating and transmission assets, including environmental projects and the purchase of nuclear fuel.

Net cash flows used in investing activities decreased $463 million for the six months ended March 31, 2026, as compared to the same period of the prior year. The decrease was driven by less spend related to capacity expansion projects, primarily related to the Cumberland natural gas project nearing completion and higher spend on the Kingston natural gas project in the prior year. In addition, during the six months ended March 31, 2026, TVA received cash related to insurance proceeds for property recovery and IRA tax credits related to capital assets.

*&nbsp;&nbsp;&nbsp;&nbsp;*

*Financing Activities*. TVA's cash flows provided by or used in financing activities are primarily driven by the timing and level of cash flows provided by operating activities, cash flows used in investing activities, and net issuance and redemption of debt instruments to maintain a strategic balance of cash on hand.

Net cash provided by financing activities decreased $1.2 billion for the six months ended March 31, 2026, as compared to the same period of the prior year. The decrease is primarily due to the timing of debt maturities related to power bond redemptions, combined with lower proceeds from debt of variable interest entities, along with the use of cash on hand to pay bond maturities. TVA anticipates a need to increase debt in the coming years as it continues to invest in power system assets, which may result in positive net cash flows provided by financing activities in future periods.

*&nbsp;&nbsp;&nbsp;&nbsp;Contractual Obligations*

TVA has certain obligations and commitments to make future payments under contracts. TVA's contractual obligations are discussed in the Annual Report in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — *Liquidity and Capital Resources* and Note 9 — *Leases,* Note 12 — *Variable Interest Entities*, Note 15 — *Debt and Other Obligations*, Note 21 — *Benefit Plans*, and Note 23 — *Commitments and Contingencies* of the Notes to the Consolidated Financial Statements in the Annual Report.

During the six months ended March 31, 2026, TVA signed two battery energy storage system agreements which are expected to commence by the summer of 2029. The terms of the agreements are 20 years and capacity payments over the terms of the agreements are expected to total over $1.3 billion. Both agreements include a lease component. In addition, TVA's

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

fuel purchase obligations increased $222 million primarily due to new and/or extended contracts for natural gas with commitments from 2026 to 2035 and increased contract costs for natural gas transportation.

**Key Initiatives and Challenges** 

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

*Capacity*

*Natural Gas Fired Units.* TVA is constructing a 200 MW aeroderivative CT project at TVA's Allen site. An approved construction air permit was received in December 2025. As of March 31, 2026, TVA had spent $254 million on the project at Allen and could spend up to an additional $109 million.

TVA is constructing a 350 MW project at TVA's Lagoon Creek site for four additional CTs. TVA completed an Environmental Impact Statement ("EIS") for 16 units at the site prior to construction of the currently operational 12 units, and in December 2025, TVA deemed that the existing EIS fulfilled National Environmental Policy Act ("NEPA") requirements for the additional CTs. As of March 31, 2026, TVA had spent $2 million on the project at Lagoon Creek and could spend up to an additional $668 million.

As of September 30, 2025, TVA had 10 idled units at the Johnsonville Combustion Turbine Facility (Units 1-10). In the first quarter of 2026, TVA made the decision to continue operating these units, with a total summer net capability of 500 MWs. The continued operation of these units is subject to real-time bulk electrical system operating constraints including transmission line loading limitations, fuel availability such as coal and gas, seasonal river reservoir levels, fuel blend, severe weather events, environmental and/or other regulatory constraints, transmission system outages, generator outages, or generator derates.

Pre-commercial plant operations began on Cumberland Combined Cycle Plant Unit 1 in April 2026.

*Nuclear.* Amid growth in energy-intensive sectors, including artificial intelligence and data centers, TVA is exploring a

diverse range of nuclear technologies to help shape the most effective, scalable, and secure solutions for the region's

growing economy. TVA will continue to work with the current Administration to unleash American energy and provide energy security for the nation.

<u>Small Modular Reactors.</u> In the second quarter of 2025, TVA requested public comment on a draft Supplemental EIS that addresses the potential environmental effects associated with site preparation, construction, operation, and decommissioning of one SMR at the Clinch River site. In April 2026, the final Supplemental EIS was issued.

<u>Nuclear Fleet License Extensions.</u> Subject to the completion of all appropriate environmental reviews, TVA is seeking to renew all nuclear generation units' licenses for an additional 20 years. A license renewal application was submitted to the NRC in January 2024 for the three units at Browns Ferry, and the renewal was approved by the NRC in December 2025.

*Coal-Fired Fleet.* In February 2026, TVA published final supplemental EISs with the preferred alternatives of continued operations of the Kingston and Cumberland Fossil Plants in conjunction with the other capacity projects being constructed at the Kingston and Cumberland sites. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — *Key Initiatives and Challenges* — *Capacity* — *Natural Gas-Fired Units* and — *Coal-Fired Fleet* in the Annual Report.

In addition, in February 2026, the TVA Board separately authorized TVA, at the direction and discretion of the CEO, to operate the Kingston and Cumberland Fossil Plants in accordance with all applicable laws and regulatory requirements, including all requirements imposed by any applicable permits, and directed TVA staff to apply for any permits that may be applicable for TVA to continue to operate the coal units along with the new gas units. In March 2026, TVA submitted requests to the Tennessee Department of Environment and Conservation ("TDEC") for modifications of the National Pollutant Discharge Elimination System permits for the Kingston and Cumberland Fossil Plants that would allow continued operations past December 31, 2028. In addition, TVA is developing its Prevention of Significant Deterioration ("PSD") permit applications for the new gas units being constructed at the Kingston and Cumberland sites. TVA will need to obtain these PSD permits in order to operate the coal units along with the new gas units in the absence of regulatory relief.

*Hydroelectric Pumped-Storage.* New hydroelectric pumped-storage is one of several technologies that TVA is exploring to help meet peak demands and allow more baseload generation while ensuring the reliability and resiliency of the grid. In 2023, TVA announced sites for a potential future pumped-storage facility. In May 2025, a draft EIS was made available for public comment, and the final EIS was published in November 2025.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Battery Energy Storage.* During the six months ended March 31, 2026, TVA signed two battery energy storage system agreements which are expected to commence by the summer of 2029. The terms of the agreements are 20 years and capacity payments over the terms of the agreements are expected to total over $1.3 billion.

*Funding Opportunities*

TVA continues to evaluate and pursue funding opportunities under the IRA and the BIL to help offset the cost of qualifying projects. The IRA makes certain tax-exempt entities, including TVA, eligible for a direct-pay option for certain tax credits for zero-emission energy projects or generation. As of March 31, 2026, TVA had recorded $112 million in Accounts receivable, net related to these tax credits. In addition, TVA received $26 million during the six months ended March 31, 2026, related to these credits.

In January 2025, TVA and a consortium of co-applicants ("consortium") applied for a U.S. DOE grant to support the potential future deployment of a small modular reactor ("SMR") at TVA's Clinch River site. In December 2025, TVA and the consortium were selected by the DOE to enter negotiations for an approximate $400 million grant to accelerate the deployment of SMRs. The upcoming phase will focus on fund allocation in addition to establishing terms and conditions.

*Coal Combustion Residuals*

On February 10, 2026, EPA published a final rule that provides additional time to complete facility evaluation reporting requirements for identifying CCR management units ("CCRMU") and to comply with associated groundwater monitoring provisions. In addition, this final rule makes conforming changes to the remaining CCRMU compliance requirements and deadlines. As a result of the enactment of the final rule, TVA recorded a decrease of $146 million to the ARO liability during the three months ended March 31, 2026. These amounts are forward-looking and are subject to various uncertainties, and actual amounts may differ materially based upon a number of factors, including, but not limited to, the outcome of legal challenges to the Legacy CCR Rule, ongoing evaluations of the number and scope of newly regulated units, and determinations on final closure requirements and performance standards. See *Forward-Looking Information* in this Quarterly Report and Part I, Item 1A, Risk Factors in the Annual Report for a discussion of additional factors. See also Note 12 — *Asset Retirement Obligations*.

In addition, on April 13, 2026, EPA issued a proposed rule that would revise existing federal CCR regulations. Specifically, EPA proposed, among other things, changes to the regulations that could authorize permitting authorities to approve alternative closure standards, timelines, methods, and points of compliance. EPA is soliciting feedback during the public comment period that could support significant additional changes when the proposed rule is finalized. TVA is evaluating the potential impact of the proposed rule. See Part I, Item 1, Business – *Environmental Matters – Cleanup of Solid and Hazardous Wastes* — *Coal Combustion Residuals* in the Annual Report.

*Corporate Governance*

*Board.* In January 2026, Jeff Hagood, Arthur Graham, Mitch Graves, and Randall Jones took their oath of office and began their service as members of the TVA Board. With these new Board members, the TVA Board now has a quorum. In addition, in January 2026, the TVA Board approved committee assignments, and the current assignments are as follows: Audit, Risk, and Cybersecurity Committee members are Mitch Graves (Chair), Arthur Graham, and Robert P. Klein; Finance, Rates, and Portfolio Committee members are A. Wade White (Chair), Arthur Graham, and Randall Jones; External Stakeholders and Regulation Committee members are Randall Jones (Chair), A. Wade White, and Jeff Hagood; Operations and Nuclear Oversight Committee members are Robert P. Klein (Chair), Arthur Graham, Mitch Graves, and A. Wade White; and People and Governance Committee members are Jeff Hagood (Chair), Robert P. Klein, and Mitch Graves.

On February 24, 2026, William J. Renick resigned as a member of the TVA Board. On February 27, 2026, the TVA Board approved the selection of Mitch Graves as Chair of the TVA Board. Mr. Graves assumed the role of Chair on February 27, 2026, and his role ends on April 1, 2027. In addition, the TVA Board also approved the selection of Jeff Hagood to serve as Chair Elect and to serve as Chair for a term ending on May 18, 2029. Mr. Hagood's term as Chair will begin on the earlier of April 1, 2027, or the date that Mr. Graves is unable to serve as Chair.

*Management.* Effective January 15, 2026, Rebecca C. Tolene was no longer performing the duties of TVA's Executive Vice President and General Counsel and will be departing TVA. In addition, effective March 2, 2026, Jeremy P. Fisher was no longer performing the duties of TVA's Executive Vice President and Chief Business Officer and will be departing TVA.

On April 3, 2026, Donald A. Moul notified TVA and the TVA Board of his intention to retire on July 1, 2026. On April 7, 2026, TVA entered into a separation and release agreement with Mr. Moul under which he is entitled to severance and retirement benefits that are materially consistent with the benefits described in TVA's Executive Severance Plan and Long-Term Incentive Plan ("LTIP"). See Part III, Item 11, Executive Compensation in the Annual Report for additional information.

On April 24, 2026, TVA announced that Michael D. Skaggs had been appointed as TVA's new Interim President and Chief Executive Officer, succeeding Mr. Moul. Mr. Skaggs started on April 24, 2026, and his appointment ends on April 24, 2027, with the option to extend the term based on the agreement of the parties.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

*Compensation Actions.* On February 11, 2026, the TVA Board approved the replacement of the Carbon-Free Performance Indicator measure and related goals under the LTIP with a new Project Milestones measure and related goals for the 2024 - 2026, 2025 - 2027, and 2026 - 2028 performance cycles.

*Presidential Memorandum Regarding Compensation Practices at TVA.* On March 11, 2026, President Trump issued a Presidential Memorandum directing the TVA Board, as appropriate and if consistent with its annual survey of prevailing compensation, to adopt and implement policies establishing a maximum total annual compensation limit of $500,000 for all TVA employees, including the CEO. The memorandum directs the TVA Board to consider whether to adopt such policies within 90 days of the date of the memorandum. The TVA Board is currently considering the memorandum in consideration of its obligations under the TVA Act. See Part III, Item 11, Executive Compensation — *Compensation Discussion and Analysis* in the Annual Report for a discussion of the TVA Board's obligations under the TVA Act with respect to compensation matters.

**Environmental Matters**

There have been no material changes to the environmental matters described in Part I, Item 1, Business — *Environmental Matters* of the Annual Report, except as described below.

*Clean Air Act Programs and Regulations.* 

*Mercury and Air Toxics Standards for Electric Utility Units*. On February 24, 2026, EPA published the repeal of the 2024 MATS Rule. This final rule removes the 2024 filterable particulate matter ("PM") emission standard for coal-fired electric generating units ("EGUs"), the tighter mercury standard for lignite-fired EGUs, and the requirement to use PM Continuous Emission Monitoring Systems. TVA is currently evaluating how these changes will impact its operations. See Part I, Item 1, Business — *Environmental Matters* — *Clean Air Act Programs and Regulations* — *Mercury and Air Toxics Standards for Electric Utility Units* in the Annual Report.

*Water Quality Control Developments*

*Steam-Electric Effluent Guidelines*. On December 31, 2025, EPA published a final effluent limitation guidelines ("ELG") deadline extensions rule that extends certain compliance deadlines in the 2024 ELG rule and provides authority to state permitting authorities to extend other compliance deadlines in the 2020 and 2024 ELG rules. In March 2026, TVA requested modifications to the National Pollutant Discharge Elimination System permits for applicable facilities to incorporate the requirements of the rule. This rule provides TVA with greater flexibility with its coal-fired plants to meet future generation and reliability requirements. See Part I, Item 1, Business – *Environmental Matters* – *Water Quality Control Developments* – *Steam-Electric Effluent Guidelines* in the Annual Report.

*Cleanup of Solid and Hazardous Wastes*

*Coal Combustion Residuals.* In August 2015, TDEC issued an order that includes an iterative process through which TVA and TDEC will investigate, assess, and remediate any unacceptable risks resulting from Coal Combustion Residuals ("CCR") management and disposal at TVA's current and former coal-fired generating units in the State of Tennessee. As part of this process, TVA submitted environmental assessment reports ("EARs") to TDEC, and after the EARs were approved, TVA submitted Corrective Action/Risk Assessment ("CARA") Plans that identified the unacceptable risks and all associated TVA actions to remediate those risks. TDEC will review the CARA Plans and provide comments, and TVA will make revisions to address TDEC's comments until TDEC approves a final CARA Plan for each site. The public also will have an opportunity to review and comment on each CARA Plan prior to TDEC's approval of the final plan. On November 14, 2025, TDEC approved the final CARA Plan for Allen Fossil Plant. See *Key Initiatives and Challenges* – *Coal Combustion Residuals* above for a discussion of recent EPA actions related to federal CCR regulations.

*NEPA Procedures*

On January 21, 2026, TVA published revised NEPA procedures in response to recent amendments to NEPA, the Council on Environmental Quality's rescission of its NEPA implementing regulations, the Supreme Court's recent decision in *Seven County Infrastructure Coalition v. Eagle County, Colorado,* and Executive Order 14154, *Unleashing American Energy*. The revised NEPA procedures will streamline TVA's environmental review of its proposed actions.

**Legal Proceedings**

From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. As of March 31, 2026, TVA had accrued $10 million with respect to Legal Proceedings. No assurance can be given that TVA will not be subject to significant additional claims and liabilities. If actual liabilities significantly exceed the estimates made, TVA's results of operations, liquidity, and financial condition could be materially adversely affected.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

For a discussion of certain current material Legal Proceedings, see Note 21 *— Commitments and Contingencies — Legal Proceedings,* which discussions are incorporated into this Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations*.*

**Critical Accounting Estimates**

The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the financial statements. Although the financial statements are prepared in conformity with accounting principles generally accepted in the U.S., TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are deemed critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows. TVA's critical accounting estimates and policies are discussed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — *Critical Accounting Estimates* and Note 1 — *Summary of Significant Accounting Policies* of the Notes to Consolidated Financial Statements in the Annual Report.

**New Accounting Standards and Interpretations**

For a discussion of new accounting standards and interpretations, see Note 2 — *Impact of New Accounting Standards and Interpretations*, which discussion is incorporated into this Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

**Legislative and Regulatory Matters**

For additional discussion on legislative and regulatory matters, including a discussion of environmental legislation and regulation, see *Environmental Matters* and *Key Initiatives and Challenges* above. See Part I, Item 1, Business — *Environmental Matters* and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — *Key Initiatives and Challenges* of the Annual Report.

TVA does not engage, and does not control any entity that is engaged, in any activity listed under Section 13(r) of the Securities Exchange Act of 1934 (the "Exchange Act"), which requires certain issuers to disclose certain activities relating to Iran involving the issuer and its affiliates. Based on information supplied by each such person, none of TVA's directors and executive officers are involved in any such activities. While TVA is an agency and instrumentality of the U.S., TVA does not believe its disclosure obligations, if any, under Section 13(r) extend to the activities of any other departments, divisions, or agencies of the U.S.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

There are no material changes related to market risks disclosed under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — *Risk Management Activities* in the Annual Report. See Note 14 — *Risk Management Activities and Derivative Transactions* for additional information regarding TVA's derivative transactions and risk management activities.

**ITEM 4. CONTROLS AND PROCEDURES**

**Disclosure Controls and Procedures**

TVA maintains disclosure controls and procedures designed to ensure that information required to be disclosed by TVA in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to TVA's management, as appropriate, to allow timely decisions regarding required disclosure. TVA's management, including the Interim President and CEO, the Executive Vice President and Chief Financial Officer, and members of the Disclosure Control Committee, including the Vice President and Controller (Principal Accounting Officer) (collectively "management"), evaluated the effectiveness of TVA's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2026. Based on this evaluation, management concluded that TVA's disclosure controls and procedures were effective as of March 31, 2026.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**Changes in Internal Control over Financial Reporting**

During the quarter ended March 31, 2026, TVA completed the implementation of its enterprise resource planning ("ERP") cloud-based financial system, replacing the previous financial system. The implementation resulted in significant changes to processes, procedures, and controls which represent a material change to TVA's internal control over financial reporting ("ICFR"). Except for the ERP implementation described above, there were no other changes in TVA's ICFR (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, TVA's ICFR.

**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

From time to time, the Tennessee Valley Authority ("TVA") is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. While the outcome of the Legal Proceedings to which TVA is a party cannot be predicted with certainty, any adverse outcome to a Legal Proceeding involving TVA may have a material adverse effect on TVA's financial condition, results of operations, and cash flows.

For a discussion of certain current material Legal Proceedings, see Note 21 — *Commitments and Contingencies* — *Contingencies* — *Legal Proceedings*, which discussions are incorporated by reference into this Part II, Item 1, Legal Proceedings.

**ITEM 1A. RISK FACTORS**

There are no material changes related to risk factors from the risk factors disclosed in Part I, Item 1A, Risk Factors in the Annual Report, except as described below.

**A loss of a quorum of the TVA Board of Directors could limit TVA's ability to adapt to changing business conditions.**

Under the TVA Act, a quorum of the TVA Board is five members. In January 2026, the TVA Board regained a quorum,

and it currently has six members. Becoming a member of the TVA Board requires confirmation by the U.S. Senate following

appointment by the President, and this process may be lengthy. In addition, the President may remove TVA Board members,

and TVA Board members may resign or otherwise leave office before a successor is commissioned. Without a quorum, the TVA

Board may not have authority to direct TVA into new areas of activity, to embark on new programs, or to change TVA's existing

direction. As such, the loss of a quorum for an extended period of time may have a negative impact on TVA's ability to change

the rates TVA charges for power, change long-term objectives, plans, and policies, and respond to significant changes in

technology, the regulatory environment, or the industry overall and, in turn, negatively affect TVA's cash flows, results of

operations, financial condition, and reputation.

**Failure to attract and retain an appropriately qualified workforce may negatively affect TVA's results of operations.**

TVA's business depends on its ability to recruit and retain key executive officers as well as skilled professional and technical employees. Labor is subject to external factors that are beyond TVA's control, including the highly competitive market for skilled workers and leaders, inflation, regional health emergencies, and workforce participation rates. In addition, the ability to attract and retain an appropriately qualified workforce may be negatively impacted by changes to TVA's compensation policies or practices that disincentivize superior performance, limit total compensation, or otherwise make such policies or practices less competitive. Such changes to TVA's compensation policies and practices may result from, among other things, presidential memoranda regarding compensation practices at TVA. The inability to attract and retain an appropriately qualified workforce could adversely affect TVA's ability to, among other things, operate and maintain generation and transmission facilities, complete large construction projects, and successfully implement its continuous improvement initiatives.

**ITEM 5. OTHER INFORMATION**

**Insider Trading Arrangements and Policies**

During the three months ended March 31, 2026, no director or officer of TVA notified TVA of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**ITEM 6. EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | <u>[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, 2016, File No. 000-52313)](https://www.sec.gov/Archives/edgar/data/1376986/000137698617000009/exhibit31.htm)</u> |
| 3.2 | <u>[Bylaws of the Tennessee Valley Authority Approved by the TVA Board on May 18, 2006, as amended on April 3, 2008, May 19, 2008, June 10, 2010, February 13, 2014, August 21, 2014, and November 6, 2014 (Incorporated by reference to Exhibit 3.2 to TVA's Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)](https://www.sec.gov/Archives/edgar/data/1376986/000137698614000041/exhibit3210-kfiling.htm)</u> |
| 10.1\* | <u>[Separation and Release Agreement Between TVA and Rebecca Tolene Dated as of February 4, 2026](a101-separationandreleasea.htm)</u> |
| 10.2\* | <u>[Separation and Release Agreement Between TVA and Jeremy Fisher Dated as of March 2, 2026](a102-separationandreleasea.htm)</u> |
| 10.3 | <u>[Offer Letter Between TVA and Michael D. Skaggs Dated as of April 24, 2026 (Incorporated by reference to Exhibit 10.1 to TVA's Current Report on Form 8-K filed on April 24, 2026, File No. 000-52313)](https://www.sec.gov/Archives/edgar/data/1376986/000137698626000026/offerletter.htm)</u> |
| 31.1 | <u>[Rule 13a-14(a)/15d-14(a) Certification Executed by the](tve-33126xex3112ndquarter2.htm)[Interim](tve-33126xex3112ndquarter2.htm)[Chief Executive Officer](tve-33126xex3112ndquarter2.htm)</u> |
| 31.2 | <u>[Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Financial Officer](tve-33126xex3122ndquarter2.htm)</u> |
| 32.1 | <u>[Section 1350 Certification Executed by the](tve-33126xex3212ndquarter2.htm)[Interim](tve-33126xex3212ndquarter2.htm)[Chief Executive Officer](tve-33126xex3212ndquarter2.htm)</u> |
| 32.2 | <u>[Section 1350 Certification Executed by the Chief Financial Officer](tve-33126xex3222ndquarter2.htm)</u> |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101 |

---

\* Certain information has been omitted because it is not material and is the type of information that TVA treats as private and/or confidential, and certain attachments have been omitted. TVA hereby undertakes to furnish the omitted information and copies of the omitted attachments upon request by the Securities and Exchange Commission.

------

**<u>[**Table of Contents**](#i2c5964761a95480aaf5fa85443ba05b6_10)</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| Date: | May 4, 2026 |  | <u>TENNESSEE VALLEY AUTHORITY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> |
|  |  |  | (Registrant) |
|  |  | By: | /s/ Michael D. Skaggs |
|  |  |  | Michael D. Skaggs |
|  |  |  | Interim President and Chief Executive Officer<br>(Principal Executive Officer)  |
|  |  | By: | /s/ Thomas C. Rice |
|  |  |  | Thomas C. Rice |
|  |  |  | Executive Vice President and Chief Financial Officer<br>(Principal Financial Officer) |

---

## Exhibit 10.1

**<u>Exhibit 10.1</u>**

CERTAIN INFORMATION IDENTIFIED WITH "[\*\*\*]" HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE

(1) IT IS NOT MATERIAL AND (2) IT IS THE TYPE OF INFORMATION THAT TVA TREATS AS PRIVATE AND/OR CONFIDENTIAL.

![tvaimagea.jpg](tvaimagea.jpg)

**Tennessee Valley Authority**, 1101 Market Street, Chattanooga, Tennessee 37402-2801

February 4, 2026

Rebecca C. Tolene

[\*\*\*]

Dear Ms. Tolene,

This Separation and Release Letter Agreement (this "<u>Agreement</u>") is to confirm the understanding that was reached on January 13, 2026, regarding your employment with TVA. The Administrator of TVA's Executive Severance Plan, Amended and Restated as of April 3, 2025, has determined that you are eligible for benefits in accordance with the terms of that plan based on the circumstances of your separation from service and your execution of this Agreement. Your separation from service decision is irrevocable as of the Effective Date of this Agreement, and you will actually separate from TVA service no later than May 13, 2026 (the "<u>Termination Date</u>"). TVA appreciates your valuable service during your tenure with TVA.

<u>No Other Amounts / Benefits Owed</u>. You will be entitled to your current salary, as well as any accrued annual leave, through the effective date of your separation from service (collectively, the "<u>Accrued Benefits</u>"). You agree that, prior to the execution of this Agreement and except for the Accrued Benefits, you were not entitled to receive any further payments or benefits from TVA, and the only payments and benefits that you are entitled to receive from TVA in the future are those specified in this Agreement; provided that your separation will not affect your rights to pension benefits in accordance with the rules of the Tennessee Valley Authority Retirement System or to the balance of your 401(k) account accrued during, and as a result of, your period of service as a TVA employee.

<u>Severance</u>. Subject to your execution and continued compliance with this Agreement, TVA will pay or provide to you, as applicable, the payments and benefits set forth in that certain Executive Severance Plan of TVA, Amended and Restated as of April 3, 2025, a copy of which is attached hereto, at the times and in the manner set forth therein, less applicable taxes and withholdings (the "<u>Severance</u>"). To the extent that there is any conflict between the terms of this Agreement and the Executive Severance Plan of TVA (or any other compensation plans offered by TVA for which you are or were a participant), the terms of the plan(s) control.

<u>Confidentiality and Non-Disparagement</u>. Because of the nature of your position, you have had access to business sensitive information. You agree, except as required by law, not to disclose or use TVA business sensitive information in the future. You also agree that you will make no comments or statements adverse or critical of TVA, its management, its employees, or any of its programs. Similarly, TVA agrees not to make any comments or statements adverse or critical of you.

<u>Post-Employment Restrictions</u>. You agree that you have received and read a copy of the Summary of Post-Employment Restrictions document which outlines the post-employment guidelines all former TVA employees must follow.

<u>Voluntary Entry</u>. You agree that you understand the provisions of this Agreement and that you voluntarily enter into it and accept it as full and final resolution of all matters related to your TVA employment.

------

Rebecca C. Tolene

February 4, 2026

<u>Release</u>. In consideration for receiving the Severance, and for other good and valuable consideration, the sufficiency of which you hereby acknowledge, you hereby expressly release and waive to the maximum extent permitted by applicable law any and all claims or causes of action, whether known or unknown, against TVA and/or its successors, past or present subsidiaries, affiliated companies, branches, or related entities (collectively, including TVA, the "<u>Entities</u>") and/or the Entities' respective past, present, or future directors, officers, agents, employees, insurers, attorneys, assigns, and employee benefit plans (collectively with the Entities, the "<u>Released Parties</u>"), with respect to any matter, including, without limitation, any matter related to your employment with TVA or the termination of that employment relationship (including any claims under Title VII of the Civil Rights Act, the Equal Pay Act, and the Family and Medical Leave Act, but not including any claims under the Federal Employees Compensation Act).

This waiver and release includes, without limitation, claims to wages, including overtime or minimum wages, bonuses, incentive compensation, vacation pay, or any other compensation or benefits; any claims for failure to provide accurate itemized wage statements, failure to timely pay final pay, or failure to provide meal or rest breaks; claims for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment or employment classification; claims for attorneys' fees or costs; claims for penalties; claims of wrongful discharge, constructive discharge, emotional distress, defamation, invasion of privacy, fraud, breach of contract, and breach of the covenant of good faith and fair dealing; any claims of discrimination, harassment, or retaliation based on sex, age, race, national origin, disability, or any other protected basis; any claims under any applicable law prohibiting discrimination, harassment, and/or retaliation; and claims under all other laws, ordinances, and regulations. You covenant not to sue the Released Parties for any of the claims released above, agree not to participate in any class, collective, representative, or group action that may include any of the claims released above, and will affirmatively opt out of any such class, collective, representative, or group action.

<u>Limited Indemnification</u>. TVA agrees to continue to defend and indemnify you against claims that result from your performance of your TVA duties prior to the Termination Date under the terms set out in TVA-SPP-25.1 Legal Representation.

<br><u>Agreement Confidential</u>. You further agree to treat this matter as confidential and not to discuss the terms of your separation from TVA service except with your family and financial advisor, or as required by law.

<u>Exceptions</u>.

This waiver and release covers only those claims that arose prior to your execution of this Agreement and does not apply to (a) the Accrued Benefits, (b) your rights under this Agreement, including to the Severance, or (c) any claim which, as a matter of law, cannot be released by private agreement. Nothing in this Agreement is intended to prevent, restrict, or otherwise discourage you from providing TVA or the Nuclear Regulatory Commission ("<u>NRC</u>") with any information about actual or potential nuclear safety concerns or violations, or from responding to requests for information from the NRC. Section 211 of the Energy Reorganization Act ("<u>ERA</u>") and NRC regulations (10 CFR 50.7) also protect employees from any adverse employment action as a result of their engaging in such protected activities. By your signature below, you confirm that you have already informed TVA management of any nuclear safety concerns you may have in connection with the construction, maintenance, operation, and security of any TVA facilities, including nuclear plants. You also confirm that no adverse employment action is being taken, in any part, as a result of your engaging in protected activities as defined in Section 211 of the ERA or NRC regulations.

------

Rebecca C. Tolene

February 4, 2026

Nothing in this Agreement is intended to prevent, restrict, or otherwise discourage you from providing the Office of the Inspector General ("<u>OIG</u>") with any information or from responding to requests for information from the OIG or otherwise precludes you from participating in any investigation or proceeding before any government agency or body or from reporting possible violations of federal or state law or regulation to any governmental agency or entity, legislative body, or self-regulatory organization, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation, nor are you required to notify TVA regarding any such reporting, disclosure, or cooperation with the government. However, while you may file a charge and participate in any such proceeding, by signing this Agreement, you waive any right, to the extent permitted under applicable law, to bring a lawsuit against the Released Parties and to any individual monetary recovery in any such proceeding or lawsuit.

You acknowledge that the U.S. Defend Trade Secrets Act of 2016 ("<u>DTSA</u>") provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, the DTSA provides that an individual who files a lawsuit for

retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (i)

files any document containing the trade secret under seal and (ii) does not disclose the trade secret, except pursuant to court order.

<u>Section 409A</u>. The Severance is intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended ("<u>Section 409A</u>"). To the extent necessary to prevent the imposition of taxes and penalties under Section 409A, if the Severance could, due to the timing of the Termination Date, be paid in either of two calendar years, such Severance shall be paid in the later such calendar year.

<u>Governing Law</u>. If any provision of the waiver and release contained in this Agreement is found to be unenforceable, it shall not affect the enforceability of the remaining provisions and a court shall enforce all remaining provisions to the fullest extent permitted by law. TVA is a corporate agency and instrumentality of the United States, and this Agreement shall be governed by and construed under federal law. In the event federal law does not provide a rule of decision for any matter or issue under this Agreement, the law of the State of Tennessee shall apply, without taking into account conflict of law principles. You agree that the jurisdiction for any action with respect to this Agreement shall lie in the United States District Court for the Eastern District of Tennessee.

<u>ADEA Waiver</u>. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the Federal Age Discrimination in Employment Act ("<u>ADEA Waiver</u>") and that the consideration given for the ADEA Waiver is in addition to anything of value to which you are already entitled. You further acknowledge that: (a) your ADEA Waiver does not apply to any claims that may arise after you sign this Agreement; (b) you are advised to consult an attorney before signing this Agreement; (c) you have 21 calendar days from the date of receipt of this letter (such final date, the "<u>Deadline</u>") to consider this Agreement before you sign it, but you may sign it at any time during the 21 days); (d) if you sign this Agreement, you may cancel it within seven days thereafter; and (e) this Agreement will not be effective until the eighth day after you sign it, provided that you have not cancelled it (the "<u>Effective Date</u>"). Any such cancellation must be in writing and signed by you and must be delivered to me by close of business on the seventh calendar day after you sign this Agreement. If you do not cancel this Agreement, this Agreement will become effective on the eighth calendar day after the date of your signature below. If you cancel this Agreement, it will become null, and void and TVA will not implement any of its terms. You agree that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original 21-day consideration period provided in this section. The offer described in this Agreement will be automatically withdrawn if you do not sign this Agreement within the 21-day consideration period.

------

Rebecca C. Tolene

February 4, 2026

If the provisions which I have set forth above accurately describe the terms of our agreement, please sign this letter at the place indicated below no later than the Deadline and return it to me. This Agreement shall become effective on the Effective Date.

Sincerely,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Donald Moul</u> 

Donald Moul

President & Chief Executive Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Rebecca C. Tolene</u> &nbsp;&nbsp;&nbsp;&nbsp;<u>02/05/2026</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rebecca C. Tolene Date&nbsp;&nbsp;&nbsp;&nbsp;

cc:&nbsp;&nbsp;&nbsp;&nbsp;Morgan Hopkins, Director, Compensation & Benefits

Attachments:&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;Tennessee Valley Authority Executive Severance Plan, effective April 3, 2025

&nbsp;&nbsp;&nbsp;&nbsp;Summary of Post-Employment Restrictions

## Exhibit 10.2

**<u>Exhibit 10.2</u>**

CERTAIN INFORMATION IDENTIFIED WITH "[\*\*\*]" HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE

(1) IT IS NOT MATERIAL AND (2) IT IS THE TYPE OF INFORMATION THAT TVA TREATS AS PRIVATE AND/OR CONFIDENTIAL.

![tva1a.jpg](tva1a.jpg)

**Tennessee Valley Authority**, 1101 Market Street, Chattanooga, Tennessee 37402-2801

March 2, 2026

Jeremy P. Fisher

[\*\*\*]

Dear Mr. Fisher,

This Separation and Release Letter Agreement (this "<u>Agreement</u>") is to confirm the understanding that was reached on March 2, 2026, regarding your employment with TVA. The Administrator of TVA's Executive Severance Plan, Amended and Restated as of April 3, 2025, has determined that you are eligible for benefits in accordance with the terms of that plan based on the circumstances of your separation from service and your execution of this Agreement. Your separation from service decision is irrevocable as of the Effective Date of this Agreement, and you will actually separate from TVA service no later than September 30, 2026 (the "<u>Termination Date</u>"). TVA appreciates your valuable service during your tenure with TVA.

<u>No Other Amounts / Benefits Owed</u>. You will be entitled to your current salary, as well as any accrued annual leave, through the effective date of your separation from service (collectively, the "<u>Accrued Benefits</u>"). Where applicable, your individual performance multiplier ("IPM") will be set at 1.0 for all eligible incentive payouts. In accordance with plan documents, actual incentive payouts will remain subject to proration and TVA performance. You agree that, prior to the execution of this Agreement and except for the Accrued Benefits, you were not entitled to receive any further payments or benefits from TVA, and the only payments and benefits that you are entitled to receive from TVA in the future are those specified in this Agreement; provided that your separation will not affect your rights to pension benefits in accordance with the rules of the Tennessee Valley Authority Retirement System or to the balance of your 401(k) account accrued during, and as a result of, your period of service as a TVA employee.

<u>Severance</u>. Subject to your execution and continued compliance with this Agreement, TVA will pay or provide to you, as applicable, the payments and benefits set forth in that certain Executive Severance Plan of TVA, Amended and Restated as of April 3, 2025, a copy of which is attached hereto, at the times and in the manner set forth therein, less applicable taxes and withholdings (the "<u>Severance</u>"). To the extent that there is any conflict between the terms of this Agreement and the Executive Severance Plan of TVA (or any other compensation plans offered by TVA for which you are or were a participant), the terms of the plan(s) control.

<u>Confidentiality and Non-Disparagement</u>. Because of the nature of your position, you have had access to confidential or business sensitive information. You agree, except as required by law, not to disclose or use TVA confidential or business sensitive information in the future. TVA generally, and you specifically, further agree that you and TVA will use reasonable and good faith efforts to ensure that neither party engages in any disparagement of the other, and shall refrain from making any false, negative, or critical statements, implied or expressed, concerning the other. You and TVA further agree to do nothing to damage the other's business reputation or good will. For purpose of this provision, TVA includes TVA and all current or former TVA Board members, executives, employees and contractors.

------

Jeremy P. Fisher

March 2, 2026

<u>Post-Employment Restrictions</u>. You agree that you have received and read a copy of the Summary of Post-Employment Restrictions document which outlines the post-employment guidelines all former TVA employees must follow.

<u>Voluntary Entry</u>. You agree that you understand the provisions of this Agreement and that you voluntarily enter into it and accept it as full and final resolution of all matters related to your TVA employment.

<u>Release</u>. In consideration for receiving the Severance, and for other good and valuable consideration, the sufficiency of which you hereby acknowledge, you hereby expressly release and waive to the maximum extent permitted by applicable law any and all claims or causes of action, whether known or unknown, against TVA and/or its successors, past or present subsidiaries, affiliated companies, branches, or related entities (collectively, including TVA, the "<u>Entities</u>") and/or the Entities' respective past, present, or future directors, officers, agents, employees, insurers, attorneys, assigns, and employee benefit plans (collectively with the Entities, the "<u>Released Parties</u>"), with respect to any matter, including, without limitation, any matter related to your employment with TVA or the termination of that employment relationship (including any claims under Title VII of the Civil Rights Act, the Equal Pay Act, and the Family and Medical Leave Act, but not including any claims under the Federal Employees Compensation Act).

This waiver and release includes, without limitation, claims to wages, including overtime or minimum wages, bonuses, incentive compensation, vacation pay, or any other compensation or benefits; any claims for failure to provide accurate itemized wage statements, failure to timely pay final pay, or failure to provide meal or rest breaks; claims for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment or employment classification; claims for attorneys' fees or costs; claims for penalties; claims of wrongful discharge, constructive discharge, emotional distress, defamation, invasion of privacy, fraud, breach of contract, and breach of the covenant of good faith and fair dealing; any claims of discrimination, harassment, or retaliation based on sex, age, race, national origin, disability, or any other protected basis; any claims under any applicable law prohibiting discrimination, harassment, and/or retaliation; and claims under all other laws, ordinances, and regulations. You covenant not to sue the Released Parties for any of the claims released above, agree not to participate in any class, collective, representative, or group action that may include any of the claims released above, and will affirmatively opt out of any such class, collective, representative, or group action.

<u>Limited Indemnification</u>. TVA agrees to continue to defend and indemnify you against claims that result from your performance of your TVA duties prior to the Termination Date under the terms set out in TVA-SPP-25.1 Legal Representation.

<br><u>Agreement Confidential</u>. You further agree to treat this matter as confidential and not to discuss the terms of your separation from TVA service except with your family and financial advisor, or as required by law.

<u>Exceptions</u>.

This waiver and release covers only those claims that arose prior to your execution of this Agreement and does not apply to (a) the Accrued Benefits, (b) your rights under this Agreement, including to the Severance, or (c) any claim which, as a matter of law, cannot be released by private agreement. Nothing in this Agreement is intended to prevent, restrict, or otherwise discourage you from providing TVA or the Nuclear Regulatory Commission ("<u>NRC</u>") with any information about actual or potential nuclear safety concerns or violations, or from responding to requests for information from the NRC. Section 211 of the Energy Reorganization Act ("<u>ERA</u>") and NRC regulations (10 CFR 50.7) also protect employees from any adverse employment action as a result of their engaging in such protected activities. By your signature below, you confirm that you have already informed TVA management of any nuclear safety concerns you may have in connection with the construction, maintenance, operation, and security of any TVA facilities, including nuclear plants. You also confirm that no adverse employment action is being taken, in any part, as a result of your engaging in protected activities as defined in Section 211 of the ERA or NRC regulations.

------

Jeremy P. Fisher

March 2, 2026

Nothing in this Agreement is intended to prevent, restrict, or otherwise discourage you from providing the Office of the Inspector General ("<u>OIG</u>") with any information or from responding to requests for information from the OIG or otherwise precludes you from participating in any investigation or proceeding before any government agency or body or from reporting possible violations of federal or state law or regulation to any governmental agency or entity, legislative body, or self-regulatory organization, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation, nor are you required to notify TVA regarding any such reporting, disclosure, or cooperation with the government. However, while you may file a charge and participate in any such proceeding, by signing this Agreement, you waive any right, to the extent permitted under applicable law, to bring a lawsuit against the Released Parties and to any individual monetary recovery in any such proceeding or lawsuit.

You acknowledge that the U.S. Defend Trade Secrets Act of 2016 ("<u>DTSA</u>") provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, the DTSA provides that an individual who files a lawsuit for

retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (i)

files any document containing the trade secret under seal and (ii) does not disclose the trade secret, except pursuant to court order.

<u>Section 409A</u>. The Severance is intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended ("<u>Section 409A</u>"). To the extent necessary to prevent the imposition of taxes and penalties under Section 409A, if the Severance could, due to the timing of the Termination Date, be paid in either of two calendar years, such Severance shall be paid in the later such calendar year.

<u>Governing Law</u>. If any provision of the waiver and release contained in this Agreement is found to be unenforceable, it shall not affect the enforceability of the remaining provisions and a court shall enforce all remaining provisions to the fullest extent permitted by law. TVA is a corporate agency and instrumentality of the United States, and this Agreement shall be governed by and construed under federal law. In the event federal law does not provide a rule of decision for any matter or issue under this Agreement, the law of the State of Tennessee shall apply, without taking into account conflict of law principles. You agree that the jurisdiction for any action with respect to this Agreement shall lie in the United States District Court for the Eastern District of Tennessee.

<u>ADEA Waiver</u>. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the Federal Age Discrimination in Employment Act ("<u>ADEA Waiver</u>") and that the consideration given for the ADEA Waiver is in addition to anything of value to which you are already entitled. You further acknowledge that: (a) your ADEA Waiver does not apply to any claims that may arise after you sign this Agreement; (b) you are advised to consult an attorney before signing this Agreement; (c) you have 21 calendar days from the date of receipt of this letter (such final date, the "<u>Deadline</u>") to consider this Agreement before you sign it, but you may sign it at any time during the 21 days); (d) if you sign this Agreement, you may cancel it within seven days thereafter; and (e) this Agreement will not be effective until the eighth day after you sign it, provided that you have not cancelled it (the "<u>Effective Date</u>"). Any such cancellation must be in writing and signed by you and must be delivered to me by close of business on the seventh calendar day after you sign this Agreement. If you do not cancel this Agreement, this Agreement will become effective on the eighth calendar day after the date of your signature below. If you cancel this Agreement, it will become null, and void and TVA will not implement any of its terms. You agree that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original 21-day consideration period provided in this section. The offer described in this Agreement will be automatically withdrawn if you do not sign this Agreement within the 21-day consideration period.

------

Jeremy P. Fisher

March 2, 2026

If the provisions which I have set forth above accurately describe the terms of our agreement, please sign this letter at the place indicated below no later than the Deadline and return it to me. This Agreement shall become effective on the Effective Date.

Sincerely,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Donald Moul</u> 

Donald Moul

President & Chief Executive Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Jeremy P. Fisher</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>03/09/2026</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jeremy P. Fisher Date&nbsp;&nbsp;&nbsp;&nbsp;

cc:&nbsp;&nbsp;&nbsp;&nbsp;Morgan Hopkins, Vice President Human Resources

Attachments:&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;Tennessee Valley Authority Executive Severance Plan, effective April 3, 2025

&nbsp;&nbsp;&nbsp;&nbsp;Summary of Post-Employment Restrictions

## Exhibit 31.1

<u>EXHIBIT 31.1</u>

**RULE 13a-14(a)/15d-14(a) CERTIFICATION**

I, Michael D. Skaggs, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of the Tennessee Valley Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | May 4, 2026 | /s/ Michael D. Skaggs |
| | | Michael D. Skaggs |
| | | Interim President and Chief Executive Officer<br>(Principal Executive Officer) |

---

## Exhibit 31.2

<u>EXHIBIT 31.2</u>

**RULE 13a-14(a)/15d-14(a) CERTIFICATION**

I, Thomas C. Rice, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of the Tennessee Valley Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | May 4, 2026 | /s/ Thomas C. Rice |
| | | Thomas C. Rice |
| | | Executive Vice President and Chief Financial Officer |
| | | (Principal Financial Officer) |

---

## Exhibit 32.1

<u>EXHIBIT 32.1</u>

**CERTIFICATION FURNISHED PURSUANT TO**

**SECURITIES EXCHANGE ACT RULE 13a-14(b)**

 **OR RULE 15d-14(b) AND 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of the Tennessee Valley Authority (the "Company") for the quarter ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael D. Skaggs, Interim President and Chief Executive Officer of the Company, certify, for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Michael D. Skaggs |
| Michael D. Skaggs |
| Interim President and Chief Executive Officer<br>(Principal Executive Officer) |
| May 4, 2026 |

---

## Exhibit 32.2

<u>EXHIBIT 32.2</u>

**CERTIFICATION FURNISHED PURSUANT TO**

**SECURITIES EXCHANGE ACT RULE 13a-14(b)**

 **OR RULE 15d-14(b) AND 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of the Tennessee Valley Authority (the "Company") for the quarter ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas C. Rice, Executive Vice President and Chief Financial Officer of the Company, certify, for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Thomas C. Rice |
| Thomas C. Rice |
| Executive Vice President and Chief Financial Officer <br>(Principal Financial Officer) |
| May 4, 2026 |

---

<br>