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

TVA has partnered with the University of Tennessee Baker School for Public Policy and Public Affairs and with diverse stakeholders from across the Tennessee Valley to conduct a Valley Pathways Study, focused on building a competitive and clean economy for the Tennessee Valley. This study examines potential scenarios for all economic sectors across the Tennessee Valley that will support sustainable growth and decarbonization pathways. The preliminary findings from the Valley Pathways Study were released in February 2024. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Optimum Energy Portfolioin the Annual Report.

Coal-Fired Fleet. In 2023, TVA made available to the public a draft 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. The final EIS was published in February 2024, and TVA documented its final decision 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 at least 1,500 MW of natural gas, 100 MW of battery storage, and 3-4 MW of solar. As of March 31, 2024, TVA had spent $181 million on long lead time equipment in connection with this planned project. 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 CTs 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 CTs 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 with a 1,450 MW combined cycle plant that is expected to be operational by CY 2026. As of March 31, 2024, TVA had spent $607 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 during the six months ended March 31, 2024, TVA signed five power purchase agreements totaling nearly 800 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 EIS 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

Coal Combustion Residuals Facilities. TVA has committed to a programmatic approach for the elimination of wet storage of coal combustion residuals ("CCR") within the TVA service area. Under this program ("CCR Program"), TVA performed stability remediation, completed the conversion of all operational coal-fired plants to dry CCR storage, and is now closing all remaining wet storage facilities.

Groundwater monitoring. TVA was involved in two lawsuits concerning the 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.

As of March 31, 2024, TVA had spent approximately $3.0 billion on its CCR Program. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges — Coal Combustion Residualsin the Annual Report.

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. In addition, in March 2024, the Board approved membership changes to the committees, and the current members of the committees are as follows: Audit, Risk, and Cybersecurity Committee members are L. Michelle Moore (Chair), Beth P. Geer, and William J. Renick; Finance, Rates, and Portfolio Committee members are A. Wade White (Chair), Brian Noland, William J. Renick, and Joe H. Ritch; External Stakeholders and Regulation Committee members are Beth Harwell (Chair), Beth P. Geer, and William J. Renick; Operations and Nuclear Oversight Committee members are Robert P. Klein (Chair), Beth P. Geer, L. Michelle Moore, and A. Wade White; and People and Governance Committee members 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.