The Tennessee Valley Authority reported net income of $313 million for the first half of fiscal year 2017 — $32 million higher than for the same period last year.
“These results demonstrate that TVA remains on track in operating more efficiently and keeping rates low,” TVA President and CEO Bill Johnson said. “We’ve been able to complete major capital projects that provide clean, reliable and affordable energy for the seven-state Tennessee Valley region while managing our debt, even with a decline in electricity sales.”
Sales in the second quarter of fiscal year 2017 were down by about 7 percent compared to the same period in 2016, driven mainly by milder winter weather. When comparing first half fiscal year 2017 to 2016, sales were about one percent lower this year.
TVA’s revenues increased five percent, or $242 million, for the six months ended March 31, 2017, compared to the same period in the prior year. This was due to higher base rates and higher fuel cost recovery revenues. Fuel and purchased power expense increased $109 million for the period due to higher effective fuel rates, driven by changes in the mix of generation resources, including significantly less hydroelectric generation, and higher market prices for natural gas.
“TVA’s generation fleet continues to become more diversified and this is helping us provide low-cost energy in a reliable and efficient manner,” Johnson said. “With the drought conditions we experienced in the first half of the year, which limited power production from our dams, Watts Bar Nuclear Unit 2 played an important role in keeping costs low.”
Watts Bar Unit 2 entered commercial operation on October 19, 2016, and was the nation’s first new nuclear unit in the 21st Century. In addition, a new gas-fired generation facility at TVA’s Paradise Fossil Plant site in Kentucky began commercial operation on April 7, 2017. The new combined cycle facility will help ensure continued reliability in western Kentucky and the TVA region.
Non-fuel operating and maintenance expenses for the first six months were up by approximately two percent, or $31 million, from the same period in 2016, attributable to an increase in planned nuclear refueling outage days.
“TVA’s effective rates are lower today after several years of improving efficiencies of our operations, and reducing annual operating expenses by over $800 million,” said TVA Chief Financial Officer John Thomas. “We are maintaining that momentum in 2017, focusing on off-setting inflationary pressures with efficiencies.”