KNOXVILLE, Tenn. ― The Tennessee Valley Authority reported $12.5 billion in total operating revenues on 163 billion kilowatt-hours of electricity sales for the year ended September 30, 2022, the first time TVA’s annual revenue exceeded the $12 billion level. Total operating revenues increased 19% over the same period last year, primarily due to an increase in fuel cost recovery revenue driven by higher fuel and purchased power market rates.
Sales of electricity increased approximately 3% compared to the prior year, driven by economic growth in TVA’s service area and weather. Weather conditions were closer to normal for 2022 despite extreme temperatures in the summer that set several power demand records.
“TVA, in partnership with our local power company customers, accomplished many things in 2022, including maintaining industry-leading reliability during challenging conditions this summer while keeping energy costs among the lowest in the nation,” said Jeff Lyash, TVA president and CEO.
“This was our third year holding base rates flat despite growing inflation pressures, and we will continue that stable trend into a fourth year in 2023,” said Lyash. “In addition, TVA’s continuing financial strength and stability allows us to return hundreds of millions of dollars in rate credits back to our customers to support local communities.”
Fuel and purchased power expense was $1.8 billion higher, driven primarily by higher fuel and purchased power prices. Lower nuclear output due to the extended outage for the Watts Bar Unit 2 steam generator replacement project, as well as fewer significant rain events that lowered hydroelectric generation, also contributed to higher fuel and purchased power expense. While the average price of natural gas was almost 90% higher in 2022 as compared to 2021, TVA actively hedges much of the fuel that it uses, and more than half of TVA’s power supply comes from carbon-free sources like nuclear, hydroelectric, and other renewables, which are not exposed to swings in fuel prices.
“TVA’s diverse generation system and proactive fuel purchasing practices translate into electricity rates in the areas served by TVA and our local power company partners that are among the lowest in the nation,” said TVA’s Chief Financial and Strategy Officer John Thomas. “While natural gas prices nearly doubled over the past year, the effective rate paid by TVA customers was only 15% higher.”
Operating and maintenance expense increased by $96 million driven by labor escalation, information technology investments, additional inventory reserves and write-offs, an increase in natural gas, hydroelectric, and coal maintenance projects, and an increase in nuclear outage days. Depreciation and amortization expense increased by $521 million over the prior year, primarily due to a change in depreciation rates following an updated depreciation study. The study included planning assumptions to potentially retire the remainder of TVA’s coal-fired fleet by 2035.
“We understand the importance of a clean energy future, which is why TVA is executing a defined plan that we laid out in our Strategic Intent and Guiding Principles document, proactively taking a national leadership role in decarbonization,” said Lyash.
“Along with significant investments in our existing carbon-free generation, such as Watts Bar Unit 2 steam generator replacement this year, we issued an industry-leading request for proposals for 5,000 megawatts of carbon-free energy to be available by 2029 and signed partnerships with Ontario Power Generation and GE-Hitachi to pursue advanced nuclear technologies.”
Interest expense was $36 million lower for the year ended Sep. 30, 2022, which was a 3% decrease from the prior year due to lower average debt balances and lower average long-term rates. TVA’s total debt and financing obligations decreased in 2022 to the lowest level in 35 years.
“After decreasing obligations for six consecutive years, we have reduced debt by over $7 billion while simultaneously investing more than $17 billion in our power system since 2013,” said Thomas. “TVA is in its best financial condition in decades and, even with rising inflation and interest rates, electric consumers in our service area will continue to benefit from TVA’s financial discipline and the significant cleaner energy investments we have made.”
TVA’s net income was $1.1 billion for the fiscal year 2022, which was $404 million lower than the prior year due mainly to higher operating expenses.
Additional highlights from TVA’s fiscal year 2022 include:
|Sales, Revenues & Expenses||2022||2021|
|Sales (millions of kWh)||162,608||157,353|
|Operating Revenues ($ millions)||$ 12,540||$ 10,503|
|Fuel & Purchased Power Expenses||4,488||2,721|
|Operating & Maintenance Expenses||2,986||2,890|
|Net Income||$ 1,108||$ 1,512|
|Net Cash Provided by / (Used in) ($ millions)|
|Operating Activities||$ 2,948||$ 3,256|
TVA’s executive management team will host a conference call to discuss the fiscal year 2022 results at 9:30 a.m. ET, on Tuesday, Nov. 15. The event will be conducted as a webcast and as a dial-in teleconference. Participants will be able to hear
the discussion and see slides via webcast but will need telephone access to ask questions. Pre-registration for the conference call is required. Please pre-register here. Once pre-registered, the dial-in number will be provided via email. If you are unable to pre-register, you may access the conference call by dialing toll-free 844-308-6432
in the United States, or 412-717-9611 outside the United States.
A replay will be available one hour after the end of the conference call, by calling toll-free 877-344-7529 in the United States or 412-317-0088 outside the United States and using the conference number 1899629. A webcast replay and transcript will also
be available for one year on TVA’s website at tva.com/investors.
TVA’s annual report on Form 10-K provides additional financial, operational, and descriptive information, including audited financial statements for the year ended Sep. 30, 2022. TVA’s annual report and other SEC reports are available without charge on TVA’s website at tva.com/investors, on the SEC’s website at sec.gov, or by calling TVA toll-free at 888-882-4975.
This release may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying these statements are reasonable, numerous factors could cause actual results to differ materially
from those in the forward-looking statements. Please refer to TVA’s most recent annual report on Form 10-K and quarterly report on Form 10-Q for a discussion of factors that could cause actual results to differ from those in the forward-looking
The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power companies serving nearly 10 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation, and land management for the Tennessee River system, and assists local power companies and state and local governments with economic development and job creation.
Public Information Officer
Tammy Wilson, Knoxville, 865-632-3366 or 888-882-4975
Josh Carlon, Knoxville, 865-632-4133 or 888-882-4975
Investor Relations website
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