Tennessee Valley Authority

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.

Optimum Energy Portfolio

Coal-Fired Fleet. In 2023, TVA made available to the public a draft environmental impact statement ("EIS") to assess the impacts associated with the potential retirement of Kingston Fossil Plant and the construction and operation of facilities to replace that generation. As of December 31, 2023, TVA had spent $122 million on long lead time equipment in connection with this potential project. However, this equipment could be used at other TVA sites if the final project is not approved. TVA expects to publish a final EIS in the second quarter of 2024. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Coal-Fired Fleetin the Annual Report.

Natural Gas-Fired Units. As TVA continues to evaluate the impact of retiring its coal-fired fleet by 2035 and works to

accelerate the growth of renewables, it also continues to evaluate adding flexible lower carbon-emitting gas plants as a strategy

to maintain reliability. Pre-commercial plant operations began on Paradise Combustion Turbine Units 5-7 in the first quarter of 2024, and the units became operational on December 29, 2023, with a total summer net capability of 681 MW. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Natural Gas-Fired Unitsin the Annual Report. In addition, Allen Combustion Turbine Units 1-16, which accounted for 195 MW of summer net capability at September 30, 2023, were retired in December 2023. TVA is continuing to explore a 200 MW aeroderivative combustion turbine project at the Allen site.

TVA is replacing generation for one unit at Cumberland Fossil Plant with a 1,450 MW combined cycle plant that is expected to be operational by CY 2026. As of December 31, 2023, TVA had spent $471 million on this project. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Natural Gas-Fired Unitsin the Annual Report.

Renewable Power Purchase Agreements. TVA issued a carbon-free request for proposal ("RFP") in July 2022, and in December 2023, TVA signed four power purchase agreements totaling over 600 MW of solar generation and 20 MW of battery storage capacity from the carbon-free RFP that are expected to come online by the end of CY 2028. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Renewable Power Purchase Agreementsin the Annual Report.

Nuclear Fleet License Extensions. Subject to the completion of all appropriate environmental reviews, TVA is seeking to renew all nuclear generation units' licenses for an additional 20 years. The first license renewal application was submitted to the Nuclear Regulatory Commission in January 2024 for the three units at Browns Ferry Nuclear Plant following the completion of a Supplemental Environmental Impact Statement prepared by TVA to assess the environmental impacts associated with renewing the Browns Ferry Nuclear Plant licenses. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Nuclear Fleet License Extensionsin the Annual Report.

Automated Energy Exchange Platform. The United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") remanded the Federal Energy Regulatory Commission's ("FERC") approval of the Southeast Energy Exchange Market, sending the matter back to FERC for additional proceedings. FERC has yet to take any action on this matter, and on December 17, 2023, the petitioners filed another appeal on the theory that FERC's failure to act promptly after the D.C. Circuit's remand created a new appealable event. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Automated Energy Exchange Platformin the Annual Report.

Coal Combustion Residuals

Groundwater monitoring. TVA was involved in two lawsuits concerning the coal combustion residuals ("CCR") facilities at Gallatin Fossil Plant ("Gallatin"). One case was resolved by the entry of a consent order, under which TVA agreed to close the existing ash facility by removal, either to an on-site landfill or to an offsite facility. The removal plan and the Environmental Assessment Report ("EAR") were approved by Tennessee Department of Environment and Conservation ("TDEC") in 2023. TVA submitted the Gallatin Corrective Action/Risk Assessment ("CARA") Plan to TDEC in January 2024.

Corporate Governance

In December 2023, the TVA Board approved a revised committee structure under which the responsibilities of the Audit, Finance, Risk, and Cybersecurity Committee were separated into two new committees: the Audit, Risk, and Cybersecurity Committee and the Finance, Rates, and Portfolio Committee. Current members of the Audit, Risk, and Cybersecurity Committee are L. Michelle Moore (Chair), Beth P. Geer, and William J. Renick. Current members of the Finance, Rates, and Portfolio Committee are A. Wade White (Chair), Beth H. Harwell, and Joe H. Ritch. There were also additional membership changes to committees as follows: current members of the External Stakeholders and Regulation Committee are Beth Harwell (Chair), Beth P. Geer, and William J. Renick; current members of the Operations and Nuclear Oversight Committee are Robert P. Klein (Chair), L. Michelle Moore, and A. Wade White; and current members of the People and Governance Committee are Brian Noland (Chair), Beth Harwell, Robert P. Klein, and Joe H. Ritch.

The term of William B. Kilbride as member of the TVA Board ended January 3, 2024, with the adjournment of the most recent session of Congress. Although his term of office expired May 18, 2023, the TVA Act permitted him to continue to serve as Director until the end of this session of Congress.