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

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 Johnsonville Aeroderivative CT Units 25-28 in the first quarter of 2025 and began on Units 29 and 30 in January 2025.

TVA is replacing generation for one unit at Cumberland with a 1,450 MW combined cycle plant that is expected to be operational by the end of CY 2026. As of December 31, 2024, TVA had spent $1.3 billion 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 Units in the Annual Report.

Two cases are currently pending before the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit") challenging permits for a pipeline that needs to be constructed to serve the Cumberland Combined Cycle Plant. On October 11, 2024, the Sixth Circuit issued an order staying the permit in both cases until the court can review the merits of these cases. The Sixth Circuit heard oral arguments on the merits on December 10, 2024, but has not yet issued a ruling. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations— Key Initiatives and Challenges— Optimum Energy Portfolio — Natural Gas-Fired Units in the Annual Report.

TVA is constructing 1,500 MW of natural gas generation at TVA's Kingston site that is expected to be operational by the end of CY 2027. As of December 31, 2024, TVA had spent $1.1 billion 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 Units in the Annual Report.

On December 16, 2024, the Southern Environmental Law Center filed an appeal on behalf of Appalachian Voices challenging the construction permit that the Division of Air Pollution Control of the Tennessee Department of Environment and Conservation (“TDEC”) issued to TVA on November 15, 2024, for the construction of new natural gas generation at Kingston. Appalachian Voices alleges that TDEC unlawfully issued a construction permit that would allow TVA to construct the plant without meeting the requirements set forth in the Clean Air Act’s Prevention of Significant Deterioration program. Among other things, Appalachian Voices is requesting that the Tennessee Air Pollution Control Board stay the effectiveness of the permit and order TDEC to revoke the permit. On January 7, 2025, TVA filed a petition to intervene in the administrative proceeding, which was granted on January 15, 2025.

Small Modular Reactors. In January 2025, TVA and a consortium of co-applicants applied for a U.S. Department of Energy grant to support the potential development and future deployment of a small modular reactor (“SMR”) at TVA’s Clinch River site. The potential development and any future deployment of a SMR at the Clinch River site are subject to TVA Board approval. TVA is following a structured planning process that advances the Clinch River project in phases at which the TVA Board will evaluate and consider approving any next steps. This funding could support not only the deployment of this first-of-a-kind technology, but also help establish the supply chain for advanced nuclear and support future deployment of the reactor across the United States. In January 2025, TVA also requested public comment on a draft Supplemental Environmental Impact Statement that addresses the potential environmental effects associated with site preparation, construction, operation, and decommissioning of one SMR, the GE Hitachi Nuclear Energy BWRX-300, at the Clinch River site.

Hurricane Helene

In late September 2024, Hurricane Helene caused significant damage in communities in East Tennessee and Western

North Carolina. TVA completed inspections at numerous dams, finding no substantial impacts. TVA is working on debris management at Douglas Reservoir to aid major disaster declarations with the Federal Emergency Management Agency ("FEMA"). TVA anticipates reimbursement from FEMA for this work. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations —Key Initiatives and Challenges —Hurricane Helene in the Annual Report.

Corporate Governance

The terms of Beth H. Harwell and Brian E. Noland as members of the TVA Board ended January 3, 2025, with the adjournment of the most recent session of Congress. Although their terms of office expired May 18, 2024, the TVA Act permitted them to continue to serve as Directors until the end of this session of Congress.

On January 13, 2025, TVA announced that Thomas C. Rice had been appointed as TVA’s new Senior Vice President and Chief Financial Officer, effective January 27, 2025. Mr. Rice willbe responsible for directing all of TVA’s financial functions, including treasury, risk management, accounting, financial operations and performance, financial planning and investor relations. He will succeed John M. Thomas, III, who, on December 2, 2024, announced his retirement from TVA effective March 7, 2025, as reported by TVA on December 5, 2024. Until his retirement, Mr. Thomas will serve as Executive Vice President and Advisor to the Chief Executive Officer ("CEO") and assist with the transition of his responsibilities.

On January 29, 2025, Jeffrey J. Lyash, TVA's President and CEO, notified his executive leadership team, and the TVA Board, of his intention to retire no later than October 2, 2025. Mr. Lyash will continue to serve in his current role as TVA undergoes a search for a new President and CEO.

Executive Actions

On January 20, 2025, President Trump issued an executive order (“EO”) that revoked a number of EOs, including the following EOs discussed in Part I, Item 1, Business —Environmental Matters — Climate Change — Executive Actions in TVA's Annual Report on Form 10-K for the year ended September 30, 2024: EO 13990, "Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis"; EO 14008, "Tackling the Climate Crisis at Home and Abroad”; EO 14030, “Climate-Related Financial Risk”; EO 14057, "Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability"; EO 14082, “Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022”; and EO 14096, “Revitalizing Our Nation's Commitment to Environmental Justice for All.” In addition, on January 21, 2025, the Office of Management and Budget issued Memorandum M-25-11, which requires agencies to immediately pause disbursement of certain funds appropriated under the IRA or the BIL, which may delay any award of grants for which TVA has applied under these acts. Furthermore, President Trump and the Administration have taken a number of other actions that may impact TVA, and TVA is currently reviewing these actions.