Tennessee Valley Authority

There have been no material changes to the environmental matters described in Part I, Item 1, Business —Environmental Matters of the Annual Report, except as described below.

Clean Air Act Programs and Regulations

National Ambient Air Quality Standards. The Clean Air Act requires the Environmental Protection Agency ("EPA") to set National Ambient Air Quality Standards ("NAAQS") for certain air pollutants. Areas meeting a NAAQS are designated as attainment areas. Areas not meeting a NAAQS are designated as non-attainment areas, and more stringent requirements apply in those areas, including stricter controls on industrial facilities and more complicated and public permitting processes. TVA fossil fuel-fired plants can be impacted by these requirements. Currently, all TVA generating units are located in areas designated as attainment areas. On March 6, 2024, however, the EPA finalized more stringent NAAQS for particulate matter that may increase the likelihood of certain areas in TVA's service territory being designated as non-attainment areas. TVA could incur significant costs associated with upgrades to facilities if such facilities are in areas that are redesignated as being in non-attainment. See Part 1, Item 1, Business —Environmental Matters —Clean Air Act Programs and Regulations—National Ambient Air Quality Standardsin the Annual Report.

Climate Change

Emissions. Though many of TVA's facilities continue to emit air pollutants, emissions from all TVA-owned and operated units (including small CTs of less than 25 MW) have been reduced from historic peaks. Emissions of nitrogen oxides ("NOx") and sulfur dioxide ("SO 2") began being regulated in 1995 and 1977, respectively. Emissions of NOxand SO 2 have been reduced by 97 percent and 99 percent, respectively, since their initial year of regulation.

Notes

(1) Intensity rates are calculated based on generation from TVA's most recent fiscal year for years indicated and emissions data from the most recent CYs.

(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall CO 2 emission rates and baseline reductions from historical levels are based on short tons.

For CY 2023, TVA's emissions of carbon dioxide ("CO 2") from its owned and operated units, including purchased power and Renewable Energy Certificate retirement adjustments which reduce the reportable CO 2 emissions, were 49 million tons, resulting in a TVA system average, as delivered, CO 2 emission rate of 625 lbs/MWh. This represents a 58 percent and 53 percent reduction in mass carbon emissions and TVA's carbon emission rate, respectively, from 2005 levels.

While TVA continues down the path of lowering emissions, including GHG emissions, there will be fluctuations in TVA's emission numbers as a result of various factors, including electricity usage in the Tennessee Valley and changes in the power supply mix, as TVA continues to make operational decisions to keep the system reliable and deliver low-cost energy. The achievement of TVA's carbon reduction efforts, and its ability to maintain system reliability during the transition to cleaner forms of energy, is subject to numerous risks. See Forward-Looking Information in this Quarterly Report and Part I, Item 1A, Risk Factors —Operational Risks— TVA may not be able to meet its carbon reduction aspirations, which may result in additional capital expenditures or higher operating expense in the Annual Report.

Water Quality Control Developments

Steam-Electric Effluent Guidelines. On January 8, 2021, TVA submitted requests to state regulatory authorities to modify National Pollutant Discharge Elimination System permits for Kingston Fossil Plant, Cumberland, Bull Run Fossil Plant, Shawnee Fossil Plant, and Gallatin to incorporate into the permits limitations in the EPA's 2020 Effluent Limitation Guidelines rule. TDEC issued a final permit for Cumberland in the first quarter of 2024. See Part I, Item 1, Business —Environmental Matters —Water Quality Control Developments —Steam-Electric Effluent Guidelines in the Annual Report.

Cleanup of Solid and Hazardous Wastes

Coal Combustion Residuals. In August 2015, TDEC issued an order that includes an iterative process through which TVA and TDEC will identify and evaluate any CCR contamination risks and, if necessary, respond to such risks. As part of this process, TVA has submitted EARs to TDEC, and after the EARs are approved, TVA will submit CARA Plans that will identify the unacceptable risks and TVA's proposed remediation. TDEC will review the CARA Plans and provide comments, and TVA will make revisions to address TDEC's comments until TDEC approves a final CARA Plan for each site. The public also will have an opportunity to review and comment on each CARA Plan prior to TDEC's approval of the final plan. CARA Plans will be made available for public review after TVA incorporates initial TDEC comments and TDEC determines the documents are ready for public review. TDEC approved the EARs for John Sevier Fossil Plant and Cumberland in the first quarter of 2024. TVA submitted the initial draft of the John Sevier CARA Plan to TDEC in the first quarter of 2024 and submitted the initial draft of the Cumberland CARA Plan to TDEC in the second quarter of 2024. See Part I, Item 1, Business —Environmental Matters —Cleanup of Solid and Hazardous Wastes —Coal Combustion Residuals in the Annual Report.

Recent EPA Developments

On April 25, 2024, the EPA announced four final rules that are designed to reduce pollution from fossil fuel-fired power plants: (1) a rule that expands the federal CCR Rule to include two new classes of units: legacy CCR surface impoundments and CCR management units, (2) a rule that imposes more stringent effluent limits on discharges of flue gas desulfurization wastewater, bottom ash transport water, and combustion residual leachate from coal-fired power plants, (3) a rule that strengthens and updates the Mercury and Air Toxics Standards for electric utility units to reflect recent developments in control technologies, and (4) a rule that establishes new GHG emission guidelines for both existing coal-fired power plants and new natural gas-fired power plants. TVA is currently evaluating the potential impact of these final rules. For a discussion of the EPA’s proposed rules relating to these matters, see Part 1, Item 1, Business —Environmental Matters in the Annual Report.