TVA announces FY2018 financial results, Johnson’s retirement

The Tennessee Valley Authority reported $11.2 billion in operating revenues for the 12-month period ended Sept. 30, 2018, a 5% increase from the same period a year ago. 

The higher revenues were driven by electricity sales of 160.3 billion kWh, a 5% increase in sales from the prior year. TVA says this is the highest sales level in the past five years and was primarily due to more extreme weather conditions, including a colder than normal January and warmer than normal temperatures during the third and fourth quarters.

“The recent investments TVA has made in its generation and transmission systems combined with the individual efforts of TVA employees has helped keep rates low even as we have supplied more than half of our power from carbon-free sources,” said TVA’s President and Chief Executive Officer William (Bill) Dean Johnson.

TVA says these results reflect a continued focus on reducing expenses from operating and maintenance activities and fuel and purchased power. Fuel and purchased power expense was down $138 million, or 4% below last year, due to lower effective fuel rates caused by lower market prices for natural gas, as well as changes in the mix of generation resources, including more nuclear, natural gas, and hydroelectric generation and less coal-fired generation. Operating and maintenance expenses for the fiscal year were down $508 million, or 15% lower than last year, primarily driven by a one-time discretionary pension contribution in 2017, along with a decrease in nuclear planned outage days.

In other news, CEO and President Johnson has announced his retirement. Johnson joined TVA in 2013 and will turn 65 in January.

The TVA Board is conducting an internal and external search, which could take many months. Johnson will continue as CEO through the period of selection and orientation to transition the new CEO and sustain strong and continuous leadership for TVA and the Valley.

“Bill Johnson has done a terrific job. His strong leadership and deep industry expertise steered TVA on a course for long-term future success. He improved TVA’s financial health and operational performance, engaged TVA employees and established better relationships with our customers, elected officials, industry regulators and community leaders,” said TVA Board Chair Richard Howorth. “On behalf of the entire Board, I thank him for his dedicated service thus far and his willingness to continue serving until we identify the next leader for this important organization.”

During Johnson’s tenure, TVA achieved several milestones, including:

  • Reducing TVA debt by $3.5 billion
  • Reducing the effective price of energy for TVA customers 2% from 2013 levels
  • Completing and bringing online the nation’s first new nuclear power plant of the 21st century, Watts Bar Nuclear Unit 2, and improving the performance of TVA’s entire nuclear fleet
  • Completing the Paradise combined-cycle natural gas plant ahead of schedule and $220 million under budget
  • Completing the Allen combined-cycle plant for reliability, reduced emissions and flexibility
  • Completing the $1 billion clean-air improvement project at Gallatin Fossil Plant
  • Maintaining 99.999% reliability in the delivery of TVA power while investing in the power system
  • Beginning work on a $300 million multi-year initiative to upgrade the power system’s fiber optic telecommunication system

TVA, a corporation owned by the U.S. government, provides electricity for business customers and distribution utilities that serve nearly 10 million people in parts of seven southeastern states at prices below the national average. TVA, which receives no taxpayer money and makes no profits, also provides flood control, navigation and land management for the Tennessee River system and assists utilities and state and local governments with economic development.

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Elizabeth Ingram is content director for the Hydro Review website and HYDROVISION International. She has more than 17 years of experience with the hydroelectric power industry. Follow her on Twitter @ElizabethIngra4 .

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