KNOXVILLE, Tenn., May 3, 2011 /PRNewswire/ -- Milder winter weather
led to lower electricity demand across the Tennessee Valley
Authority's seven-state service territory in the second quarter of
the fiscal year, compared with the same period a year ago, the
federal utility reported Tuesday.
(Logo: http://photos.prnewswire.com/prnh/20100304/TVALOGO)
In its quarterly financial filing with the Securities and
Exchange Commission, TVA noted that power demand, which was mainly
affected by sales to residential customers of local power companies
that distribute TVA-produced electricity, declined 6 percent to
42.9 billion kilowatt-hours for the three-month period ending
March 31, compared with the second
quarter of 2010. Demand so far in fiscal year 2011 is about 2
percent less than a year ago.
The second-quarter results also were affected by increases in
pension and post-retirement benefit expenses; higher operating and
maintenance expenses from refueling nuclear plants and outages at
coal-fired and gas-fired plants; and higher fuel and purchased
power costs, which were partially offset by an increase in
fuel-related revenue through the monthly fuel cost adjustment.
"Our balance sheet remains strong, and that positions us well
for the challenges ahead," Chief Financial Officer John Thomas said, noting that TVA receives no
tax money and makes no profit. "Most immediately, that will help
support our recovery from the tornadoes that disrupted power to
hundreds of thousands of people across our service area last
week."
TVA was making significant progress in restoring service to
areas in Alabama, Mississippi and Tennessee that lost electricity in severe
storms swept across the region April
27 and 28. The storms damaged or destroyed numerous power
lines, disrupting electric service across wide areas. Repairs to
the power system were still under way Tuesday, and Thomas said TVA
will calculate the financial impact of the storms over the coming
weeks.
Also during the storms, the Browns Ferry Nuclear Plant entered
safe shutdown status and activated backup power supplies while
power lines in the region underwent repairs.
"The Browns Ferry Plant and its safety systems performed as
designed, shutting down safely when the severe weather affected its
external electricity service," Thomas said. "Browns Ferry was
designed to withstand conditions far more severe than last week's
storms. The plant, its safety systems and its staff performed
well."
In discussing TVA's quarterly financial results, Thomas said
demand from commercial and industrial customers of the local power
companies served by TVA remained relatively flat compared with the
same period a year ago. Power demand by TVA's directly served
industrial customers was down about 4 percent. Electricity demand
from federal agencies served by TVA was up 10.5 percent.
TVA revenues increased $346
million, or 13 percent, to $3.0
billion in the second quarter of 2011, compared with the
same period a year ago when consumers benefited from lower fuel
costs.
Operating expenses for the quarter increased $526 million, or 28 percent, to $2.4 billion, over the same period last year. Key
factors included a $338 million
increase in fuel expenses, an $85
million increase in purchased power costs and a $44 million increase in tax equivalent payments
to state and local governments, which are based on sales
revenue.
TVA ended the second quarter of fiscal 2011 with $253 million in net income for reinvestment in
the power system, down $177 million
from the same period a year ago. Because TVA does not make a
profit, its net income is reinvested in its operations and
infrastructure, which helps keep prices lower for consumers.
The quarterly report also discussed potential lessons to be
learned by the nuclear industry from events in Japan and two key developments at TVA since
the quarter ended March 31:
- A landmark clean air agreement, adopted by the TVA board of
directors April 14, with the U.S.
Environment Protection Agency, four states and three environmental
advocacy groups to resolve litigation; to retire, idle or
environmentally control more than two dozen coal-fired power
generation units by 2020, and to invest $350
million in energy efficiency and renewable energy projects
to be funded through power revenues.
- A new Integrated Resource Plan, accepted by the TVA board on
April 14, that outlines power supply
options for TVA over the next 20 years.
"The clean air agreement and the Integrated Resource Plan are
significant accomplishments," Thomas said. "They also are important
steps towards achieving our vision to be a national leader in
low-cost and cleaner energy."
TVA's quarterly report on Form 10-Q provides additional
financial, operational and descriptive information, including
unaudited financial statements for the quarter that ended
March 31, 2011, and is available to
investors and the public. The public may read reports or other
information that TVA files with the SEC at its Public Reference
Room at 100 F Street, N.E., Washington,
DC 20549. TVA SEC reports are also available on the SEC's
website at http://www.sec.gov or on TVA's website at
http://www.tva.com/finance or by calling TVA toll free at
888-882-4975.
The Tennessee Valley Authority (NYSE: TVE), a corporation owned
by the U.S. government, provides electricity for utility and
business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North
Carolina and Virginia – an
area of 80,000 square miles with a population of 9 million. TVA
operates 29 hydroelectric dams, 11 coal-fired power plants, three
nuclear plants and 11 natural gas-fired power facilities that can
produce about 34,000 megawatts of electricity, delivered over
16,000 miles of high-voltage power lines. TVA also provides flood
control, navigation, land management and recreation for the
Tennessee River system and works with local utilities and state and
local governments to promote economic development across the
region. TVA, which makes no profits and receives no taxpayer money,
is funded by sales of electricity to its customers. Electricity
prices in TVA's service territory are below the national
average.
SOURCE Tennessee Valley Authority