The Tennessee Valley Authority reported Tuesday that it earned $6 billion in total operating revenues on 76 billion kilowatt-hours of electricity sales for the six months ended Mar. 31, 2023.
Total operating revenues increased 9% over the same period last year, primarily due to an increase in fuel cost recovery revenue, which was driven by higher fuel rates for the first half of the fiscal year. Sales of electricity decreased approximately 3% compared to the same period of the prior year, driven by overall milder weather during 2023 as compared to 2022.
Fuel and purchased power expense was $432 million higher in the first half of 2023 over the same period of the prior year, primarily due to higher prices.
"I'm proud of our employees who work every day to keep our customer's energy costs low despite the extreme temperatures in late December, which drove record demand," Jeff Lyash, TVA President and CEO, said. "We are committed to providing affordable, reliable, resilient and clean energy – at all times. It is what our customers expect and deserve.
"We have one of the nation's cleanest, most diverse generation portfolios – including nuclear, solar, gas, and hydro. This diverse generation is key to helping protect our region's energy security, insulating our customers from fuel volatility, and allowing us to keep our base rate unchanged for four years in a row."
In the first six months of fiscal year 2023, 59% of TVA's power supply was carbon-free - coming from nuclear, hydroelectric and renewables.
Operating and maintenance expense increased by $103 million over the same period last year, driven primarily by costs related to TVA's New Nuclear Program and increased labor costs. Depreciation and amortization expense increased $61 million primarily due to an increase in amortization expense of decommissioning costs recovered in rates and TVA's decision to retire the two remaining units at Cumberland.
Interest expense was $3 million higher for the six months ended Mar. 31, 2023, with higher rates on short-term debt offset by lower interest on long-term debt. TVA's net income was $149 million for the first half of fiscal year 2023, which was $71 million lower than the same period of the prior year, mainly due to higher operating expenses.
"TVA remains focused on keeping costs as low as feasible, which enables us to keep our region growing by providing affordable, reliable, resilient and clean electricity," said TVA's Chief Financial and Strategy Officer John Thomas. "We also continue to benefit from recent debt reduction, and low exposure to rising interest rates this year, which is helping us keep power prices stable."
Additional highlights from TVA's second quarter fiscal year 2023:
- Credits from the 2.5% monthly base rate Pandemic Recovery Credit totaled $106 million for the six months ended March 31, 2023. This credit to all customers, which TVA extended through 2023, is expected to total approximately $230 million in 2023, keeping money in local communities to help with ongoing recovery efforts.
- TVA, Ontario Power Generation, Synthos Green Energy, and GE Hitachi Nuclear Energy ("GEH") entered into a multi-party collaborative arrangement to advance the global deployment of the GEH BWRX-300 small modular reactor. GEH is responsible for standard design development. Under the agreement, TVA will contribute up to $88 million for design costs incurred by GEH through 2026. At the time feasibility is determined, TVA will have the right to use the design and may receive additional economic benefits.
- In March 2023, TVA announced a memorandum of understanding (MOU) with the U.S. Department of Energy to enhance collaboration on hydropower technology development. Joint efforts will focus on evaluating and demonstrating different approaches for operating hydropower plants to meet the electricity grid's changing needs.
- TVA published its annual Diversity, Equity, Inclusion and Accessibility (DEIA) report, which highlights TVA's progress and key programs to promote DEIA within its workforce and across the seven states it serves.
- The Tennessee Valley Authority was selected as one of the U.S. Department of Energy and U.S. Environmental Protection Agency's 2023 ENERGY STAR Partners of the Year in Energy Efficiency for our Home Uplift program, which provides free home energy upgrades to income-eligible participants.
- TVA to release its After Winter Storm Elliott Action Review in May 2023. The review calls for TVA to focus on modernizing parts of its power fleet to ensure reliability under extreme conditions.
TVA's executive management team will host a conference call and webcast today to discuss second quarter fiscal year 2023 results at 9:30 a.m. ET. The event will be conducted as a webcast and as a dial-in teleconference. Participants will be able to hear the discussion and see slides via webcast, but will need telephone access to ask questions. Pre-registration for the conference call is required. Please click here to pre-register. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free 844-308-6432 in the United States, or 412-717-9611 outside the United States.
