KNOXVILLE, Tenn. • The Tennessee Valley Authority reported second-quarter net earnings of $456 million on sales of $2.5 billion.
TVA’s first-quarter profit represented a 78% increase compared to the $255 million it earned in the same period a year earlier.
For the first six months of fiscal year 2021, TVA said it earned $640 million versus $447 million a year ago.
The federal utility that serves more than 10 million customers across seven states reported $4.9 billion in total operating revenues on 76.4 billion kilowatt-hours of electricity sales for the first two quarters of its fiscal year.
Sales of electricity were 3% higher due to an 8% increase in heating degree days compared to a year ago, as well as an increase in sales to directly served customers.
TVA said it has maintained 99.999% reliability for 20 years.
“The industry-leading reliability of the TVA power system kept the lights and heat on in the Tennessee Valley region this winter during conditions that caused severe disruptions in other parts of the country,” said Jeff Lyash, TVA president and CEO.
TVA’s tax equivalents and interest expenses were lower in the first two quarters of the fiscal year than in the same periods of the prior year, while operating and maintenance expenses increased slightly by $26 million, driven primarily by an increase in planned outage expense and labor escalation. TVA’s fuel and purchased power expense was 8% lower, due primarily to lower fuel cost recovery resulting from volatility in the natural gas and purchased power markets, as well as lower effective fuel rates, due to lower coal prices, improved nuclear fleet performance and more hydroelectric generation.
“As we continue to provide reliable power even in the most extreme conditions, the cost of TVA’s electricity also remains among the lowest in the industry and the region,” said John Thomas, TVA’s chief financial officer. “In fact, TVA’s customers are paying effective wholesale rates in 2021 that are lower than a decade ago and we project our rates will remain stable for the remainder of the decade.”
Other highlights from TVA’s quarterly report:
As part of the Strategic Financial Plan approved by the TVA Board in 2019, TVA began offering a 20-year Valley Partnership Agreement option to local power company customers. As of May 3, 2021, 142 local power companies had accepted the offer and are now TVA long-term partners. Bill credits available to long-term partners totaled over $90 million in the first two quarters of fiscal year 2021.
• In 2020, the TVA Board approved a Pandemic Relief Credit that became effective beginning in October 2020 as a 2.5% monthly base rate credit, totaling about $200 million for 2021. As of March 31, 2021, TVA had provided approximately $104 million in Pandemic Relief Credits. TVA is also offering the Back-to-Business credit program that provides relief to certain larger customers when returning to operations and the Community Care Fund that partners TVA and LPCs to support local initiatives that address hardships created by the COVID-19 pandemic.
• TVA’s economic development efforts reported over $3.9 billion in investments and more than 45,200 jobs created or retained through the second quarter of 2021.