Tennessee Valley Authority

TVA's operating revenues were $8.8 billion and $8.7 billion for the nine months ended June 30, 2024 and 2023, respectively. Operating revenues increased for the nine months ended June 30, 2024, as compared to the same period of the prior year, primarily as a result of higher effective base rates and higher sales volume, partially offset by lower fuel rates. Effective base rates were higher primarily due to the TVA Board of Directors ("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 50 percent increase in cooling degree days as compared to the same period of the prior year. Lower fuel rates were primarily due to lower coal, natural gas, and purchased power prices.

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 $322 million for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, primarily due to a decrease in fuel and purchased power expense. Fuel and purchased power expense decreased $379 million for the nine months ended June 30, 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 a $125 million increase in Operating and maintenance expense primarily due to increases in payroll and benefit costs and contract labor costs related to labor escalation for cost of living increases, additional headcount to support operational needs, strategic project work, and power operations performance improvement activities.

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 ("Kingston) with the Record of Decision on April 2, 2024. TVA plans to retire the nine coal-fired units at Kingston by the end of calendar year ("CY") 2027 and replace the retired generation with an energy complex that includes natural gas, battery storage, and solar.

On May 8, 2024, the Environmental Protection Agency ("EPA") published its final legacy CCR rule ("Legacy CCR Rule"), which expands the scope of the existing regulatory requirements of EPA's 2015 CCR rule, as revised ("2015 CCR Rule"), to include two additional classes of CCR units: legacy CCR surface impoundments ("Legacy SIs") and CCR management units ("CCRMUs"). As a result of the enactment of the final rule, TVA recorded additional estimated AROs and regulatory assets of $3.1 billion during the three months ended June 30, 2024, in order to comply with the requirements related to these two additional classes of CCR units.