Tennessee Valley Authority

TVA's operating revenues were $5.9 billion and $6.0 billion for the six months ended March 31, 2024 and 2023, respectively. Operating revenues decreased for the six months ended March 31, 2024, as compared to the same period of the prior year, primarily as a result of lower fuel rates, partially offset by higher effective base rates and higher sales volume. The lower fuel rates were primarily due to lower coal, natural gas, and purchased power prices. Effective base rates were higher primarily due to the TVA Board action to approve a 4.5 percent wholesale base rate increase beginning in 2024 and the pandemic credits ending on September 30, 2023. The higher sales volume was driven by a four percent increase in heating degree days as compared to the same period of the prior year.

On January 17, 2024, TVA reached an all-time record high peak power demand of approximately 34,577 megawatts ("MW"). This peak was nearly 1,100 MW greater than TVA's previous all-time peak and over 1,100 MW greater than TVA's peak power demand during Winter Storm Elliott in December 2022. In addition, TVA reached a second highest all-time record high peak power demand of approximately 34,284 MW on January 21, 2024.

Total operating expenses decreased $281 million for the six months ended March 31, 2024, as compared to the six months ended March 31, 2023, primarily due to a decrease in fuel and purchased power expense. Fuel and purchased power expense decreased $331 million for the six months ended March 31, 2024, as compared to the same period of the prior year, primarily due to lower coal, natural gas, and purchased power prices. This decrease was partially offset by an $106 million increase in Operating and maintenance expense primarily due to increases in payroll and benefit costs and contract labor costs.

Pre-commercial plant operations began on Paradise Combustion Turbine Units ("CTs") 5-7 in the first quarter of 2024, and the units became operational on December 29, 2023. In addition, 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 ("EIS"). TVA documented its final decision related to the retirement of Kingston Fossil Plant with the Record of Decision on April 2, 2024. TVA plans to retire the nine coal-fired units at Kingston Fossil Plant by the end of CY 2027 and replace the retired generation with an energy complex that includes natural gas, battery storage, and solar. See Key Initiatives and Challenges —Optimum Energy Portfolio.