DEI_Document
DEI Document (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Document Information [Line Items] | ' |
Entity Registrant Name | 'Tennessee Valley Authority |
Entity Central Index Key | '0001376986 |
Current Fiscal Year End Date | '--09-30 |
Entity Filer Category | 'Non-accelerated Filer |
Document Type | '10-Q |
Document Period End Date | 30-Jun-14 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q3 |
Amendment Flag | 'false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Well-known Seasoned Issuer | 'No |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Public Float | $0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Operating revenues | ' | ' | ' | ' |
Sales of electricity | $2,618 | $2,572 | $7,869 | $7,830 |
Other revenue | 33 | 30 | 102 | 92 |
Total operating revenues | 2,651 | 2,602 | 7,971 | 7,922 |
Operating expenses | ' | ' | ' | ' |
Fuel | 698 | 652 | 1,904 | 2,118 |
Purchased power | 279 | 263 | 843 | 796 |
Operating and maintenance | 880 | 866 | 2,480 | 2,662 |
Depreciation and amortization | 463 | 412 | 1,357 | 1,248 |
Tax equivalents | 133 | 131 | 395 | 404 |
Total operating expenses | 2,453 | 2,324 | 6,979 | 7,228 |
Operating income | 198 | 278 | 992 | 694 |
Other income (expense), net | 10 | 10 | 37 | 36 |
Interest expense | ' | ' | ' | ' |
Interest expense | 334 | 343 | 1,009 | 1,057 |
Allowance for funds used during construction and nuclear fuel expenditures | -45 | -43 | -127 | -124 |
Net interest expense | 289 | 300 | 882 | 933 |
Net income (loss) | ($81) | ($12) | $147 | ($203) |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Net income (loss) | ($81) | ($12) | $147 | ($203) | ||||
Other comprehensive income (loss) | ' | ' | ' | ' | ||||
Net unrealized gain (loss) on cash flow hedges | 1 | 9 | 23 | -7 | ||||
Reclassification to earnings from cash flow hedges | -26 | [1] | -1 | [1] | -55 | [1] | 57 | [1] |
Total other comprehensive income (loss) | -25 | 8 | -32 | 50 | ||||
Total comprehensive income (loss) | ($106) | ($4) | $115 | ($153) | ||||
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt. |
CONSOLIDATED_BALANCE_SHEETS_UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $505 | $1,602 |
Restricted cash and investments | 0 | 33 |
Accounts receivable, net | 1,550 | 1,567 |
Inventories, net | 1,063 | 1,091 |
Regulatory assets | 566 | 561 |
Other current assets | 70 | 52 |
Total current assets | 3,754 | 4,906 |
Property, plant, and equipment | ' | ' |
Completed plant | 47,243 | 47,073 |
Less accumulated depreciation | -24,233 | -23,157 |
Net completed plant | 23,010 | 23,916 |
Construction in progress | 5,624 | 4,704 |
Nuclear fuel | 1,275 | 1,256 |
Capital leases | 59 | 47 |
Total property, plant, and equipment, net | 29,968 | 29,923 |
Investment funds | 1,903 | 1,701 |
Regulatory and other long-term assets | ' | ' |
Regulatory assets | 8,566 | 9,131 |
Other long-term assets | 504 | 445 |
Total regulatory and other long-term assets | 9,070 | 9,576 |
Total assets | 44,695 | 46,106 |
Current liabilities | ' | ' |
Accounts payable and accrued liabilities | 1,722 | 1,627 |
Environmental cleanup costs - Kingston ash spill | 82 | 102 |
Accrued interest | 312 | 378 |
Current portion of leaseback obligations | 75 | 69 |
Current portion of energy prepayment obligations | 100 | 100 |
Regulatory liabilities | 181 | 212 |
Short-term debt, net | 1,759 | 2,432 |
Current maturities of power bonds | 1,032 | 32 |
Current maturities of long-term debt of variable interest entities | 31 | 30 |
Total current liabilities | 5,294 | 4,982 |
Other liabilities | ' | ' |
Post-retirement and post-employment benefit obligations | 5,410 | 5,348 |
Asset retirement obligations | 3,067 | 3,472 |
Other long-term liabilities | 1,911 | 1,861 |
Leaseback obligations | 617 | 692 |
Energy prepayment obligations | 335 | 410 |
Environmental cleanup costs - Kingston ash spill | 0 | 67 |
Regulatory liabilities | 2 | 1 |
Total other liabilities | 11,342 | 11,851 |
Long-term debt, net | ' | ' |
Long-term power bonds, net | 21,012 | 22,315 |
Long-term debt of variable interest entities | 1,295 | 1,311 |
Total long-term debt, net | 22,307 | 23,626 |
Total liabilities | 38,943 | 40,459 |
Proprietary capital | ' | ' |
Power program appropriation investment | 261 | 268 |
Power program retained earnings | 4,917 | 4,767 |
Total power program proprietary capital | 5,178 | 5,035 |
Nonpower programs appropriation investment, net | 603 | 609 |
Accumulated other comprehensive income (loss) | -29 | 3 |
Total proprietary capital | 5,752 | 5,647 |
Total liabilities and proprietary capital | $44,695 | $46,106 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities | ' | ' | |
Net income (loss) | $147 | ($203) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ' | ' | |
Depreciation and amortization (including amortization of debt issuance costs and premiums/discounts) | 1,391 | 1,280 | |
Amortization of nuclear fuel cost | 205 | 186 | |
Non-cash retirement benefit expense | 429 | 467 | |
Prepayment credits applied to revenue | -75 | -77 | |
Fuel cost adjustment deferral | -91 | 93 | |
Fuel cost tax equivalents | 1 | 2 | |
Environmental cleanup costs - Kingston ash spill - non cash | 51 | 54 | |
Changes in current assets and liabilities | ' | ' | |
Accounts receivable, net | 15 | 169 | |
Inventories and other, net | 33 | -58 | |
Accounts payable and accrued liabilities | 22 | -258 | |
Accrued interest | -66 | -52 | |
Regulatory assets costs | 49 | 8 | |
Pension contributions | 132 | 6 | |
Environmental cleanup costs - Kingston ash spill | -65 | -81 | |
Insurance recoveries | 175 | 5 | |
Other, net | -4 | -35 | |
Net cash provided by operating activities | 1,987 | 1,478 | |
Cash flows from investing activities | ' | ' | |
Construction expenditures | -1,694 | -1,510 | |
Nuclear fuel expenditures | -272 | -238 | |
Loans and other receivables | ' | ' | |
Advances | -3 | -4 | |
Repayments | 5 | 7 | |
Other, net | -3 | 0 | |
Net cash used in investing activities | -1,961 | -1,745 | |
Cash flows from financing activities | ' | ' | |
Issues of power bonds | 0 | 1,080 | |
Redemptions and repurchases of power bonds | 363 | 1,417 | |
Redemptions of variable interest entities | 15 | [1] | 6 |
Short-term debt issues (redemptions), net | -674 | 887 | |
Payments on leases and leasebacks | -70 | -78 | |
Financing costs, net | 0 | -7 | |
Payments to U.S. Treasury | -10 | -19 | |
Other, net | 9 | -61 | |
Net cash (used in) provided by financing activities | -1,123 | 379 | |
Net change in cash and cash equivalents | -1,097 | 112 | |
Cash and cash equivalents at beginning of period | 1,602 | 868 | |
Cash and cash equivalents at end of period | $505 | $980 | |
[1] | All redemptions were at 100 percent of par. |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Balance at Beginning of Period | $5,861 | $5,164 | $5,647 | $5,326 |
Net income (loss) | -81 | -12 | 147 | -203 |
Total other comprehensive income (loss) | -25 | 8 | -32 | 50 |
Return on power program appropriation investment | -1 | -1 | -3 | -4 |
Return of power program appropriation investment | -2 | -5 | -7 | -15 |
Balance at End of Period | 5,752 | 5,154 | 5,752 | 5,154 |
Power Program Appropriation Investment | ' | ' | ' | ' |
Balance at Beginning of Period | 263 | 278 | 268 | 288 |
Net income (loss) | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Return on power program appropriation investment | 0 | 0 | 0 | 0 |
Return of power program appropriation investment | -2 | -5 | -7 | -15 |
Balance at End of Period | 261 | 273 | 261 | 273 |
Power Program Retained Earnings | ' | ' | ' | ' |
Balance at Beginning of Period | 4,997 | 4,302 | 4,767 | 4,492 |
Net income (loss) | -79 | -9 | 153 | -196 |
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Return on power program appropriation investment | -1 | -1 | -3 | -4 |
Return of power program appropriation investment | 0 | 0 | 0 | 0 |
Balance at End of Period | 4,917 | 4,292 | 4,917 | 4,292 |
Nonpower Programs Appropriation Investment, Net | ' | ' | ' | ' |
Balance at Beginning of Period | 605 | 616 | 609 | 620 |
Net income (loss) | -2 | -3 | -6 | -7 |
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Return on power program appropriation investment | 0 | 0 | 0 | 0 |
Return of power program appropriation investment | 0 | 0 | 0 | 0 |
Balance at End of Period | 603 | 613 | 603 | 613 |
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | ' | ' | ' | ' |
Balance at Beginning of Period | -4 | -32 | 3 | -74 |
Net income (loss) | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss) | -25 | 8 | -32 | 50 |
Return on power program appropriation investment | 0 | 0 | 0 | 0 |
Return of power program appropriation investment | 0 | 0 | 0 | 0 |
Balance at End of Period | ($29) | ($24) | ($29) | ($24) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
General | |
The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States that was created in 1933 by legislation enacted by the United States ("U.S.") Congress in response to a request by President Franklin D. Roosevelt. TVA was created to, among other things, improve navigation on the Tennessee River, reduce the damage from destructive flood waters within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers, further the economic development of TVA's service area in the southeastern United States, and sell the electricity generated at the facilities TVA operates. | |
Today, TVA operates the nation's largest public power system and supplies power in most of Tennessee, northern Alabama, northeastern Mississippi, and southwestern Kentucky and in portions of northern Georgia, western North Carolina, and southwestern Virginia to a population of over nine million people. | |
TVA also manages the Tennessee River, its tributaries, and certain shorelines to provide, among other things, year-round navigation, flood damage reduction, and affordable and reliable electricity. Consistent with these primary purposes, TVA also manages the river system to provide recreational opportunities, adequate water supply, improved water quality, natural resource protection, and economic development. | |
The power program has historically been separate and distinct from the stewardship programs. It is required to be self-supporting from power revenues and proceeds from power financings, such as proceeds from the issuance of bonds, notes, or other evidences of indebtedness ("Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the U.S. Treasury in repayment of and as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment. | |
Power rates are established by the TVA Board of Directors (the "TVA Board") as authorized by the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (as amended, the “TVA Act”). The TVA Act requires TVA to charge rates for power that will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to states and counties in lieu of taxes ("tax equivalents"); debt service on outstanding indebtedness; payments to the U.S. Treasury in repayment of and as a return on the Power Program Appropriation Investment; and such additional margin as the TVA Board may consider desirable for investment in power system assets, retirement of outstanding Bonds in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA's power business. In setting TVA's rates, the TVA Board is charged by the TVA Act to have due regard for the primary objectives of the TVA Act, including the objective that power shall be sold at rates as low as are feasible. Rates set by the TVA Board are not subject to review or approval by any state or other federal regulatory body. | |
Fiscal Year | |
TVA's fiscal year ends September 30. Years (2014, 2013, etc.) refer to TVA's fiscal years unless they are preceded by “CY,” in which case the references are to calendar years. | |
Cost-Based Regulation | |
Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. In view of demand for electricity and the level of competition, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of future recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. Most regulatory asset write offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable. | |
Basis of Presentation | |
TVA prepares its consolidated interim financial statements in conformity with GAAP for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2013, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2013 (the “Annual Report”). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included in the interim financial statements. | |
The accompanying consolidated interim financial statements include the accounts of TVA and three variable interest entities ("VIEs"), of which TVA is the primary beneficiary. See Note 8. Intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are deemed critical either when a different estimate could have reasonably been used or where changes in the estimate are reasonably likely to occur from period to period and such use or change would materially impact TVA's financial condition, results of operations, or cash flows. | |
Reclassifications | |
Certain reclassifications have been made to the Consolidated Statement of Cash Flows for the nine months ended June 30, 2014 in the Cash flows from operating activities section as $(14) million previously reported as Other, net was reclassified to $(8) million of Regulatory assets costs and $(6) million of Pension contributions. In addition, $5 million previously reported as Environmental cleanup costs — Kingston ash spill, net was reclassified to $5 million of Insurance recoveries. | |
Allowance for Uncollectible Accounts | |
The allowance for uncollectible accounts reflects TVA's estimate of probable losses inherent in its accounts and loans receivable balances. TVA determines the allowance based on known accounts, historical experience, and other currently available information including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements after 90 days. It also reflects TVA's corporate credit department's assessment of the financial condition of customers and the credit quality of the receivables. | |
The allowance for uncollectible accounts was $1 million at both June 30, 2014 and September 30, 2013 for accounts receivable. Additionally, loans receivable of $105 million and $73 million at June 30, 2014 and September 30, 2013, respectively, are included in Other long-term assets and reported net of allowances for uncollectible accounts of $10 million. | |
Depreciation | |
Depreciation expense was $391 million and $341 million for the three months ended June 30, 2014, and 2013, and $1.1 billion and $1.0 billion for the nine months ended June 30, 2014, and 2013, respectively. On November 14, 2013, TVA determined that Paradise Fossil Plant ("Paradise") Units 1 and 2 will be idled on March 31, 2017, and depreciation expense is being accelerated over the remaining useful life. This resulted in additional depreciation expense of $21 million and $34 million during the three and nine months ended June 30, 2014, respectively. It is expected that the decision to idle Paradise Units 1 and 2 on March 31, 2017, will increase depreciation expense by approximately $21 million for the remainder of 2014. | |
Asset Retirement Obligations | |
TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to nuclear generating plants, fossil fuel-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site reclamation. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 11 — Asset Retirement Obligations. | |
Blended Low-Enriched Uranium Program | |
Under the blended low-enriched uranium ("BLEU") program, TVA, the Department of Energy ("DOE"), and certain nuclear fuel contractors have entered into agreements providing for the DOE's surplus of enriched uranium to be blended with other uranium down to a level that allows the blended uranium to be fabricated into fuel that can be used in nuclear power plants. Under the terms of an interagency agreement between TVA and the DOE, in exchange for supplying highly enriched uranium materials to the appropriate third-party fuel processors for processing into usable BLEU fuel for TVA, the DOE participates to a degree in the savings generated by TVA’s use of this blended nuclear fuel. Over the life of the program, TVA projects that the DOE’s share of savings generated by TVA’s use of this blended nuclear fuel could result in payments to the DOE of as much as $160 million. TVA accrues an obligation with each BLEU reload batch related to the portion of the ultimate future payments estimated to be attributable to the BLEU fuel currently in use. At June 30, 2014, TVA had paid out approximately $101 million for this program, and the obligation recorded was $16 million. |
Impact_of_New_Accounting_Stand
Impact of New Accounting Standards and Interpretations | 9 Months Ended |
Jun. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Impact of New Accounting Standards and Interpretations | ' |
Impact of New Accounting Standards and Interpretations | |
The following accounting standards became effective for TVA on October 1, 2013. | |
Balance Sheet. In December 2011, the Financial Accounting Standards Board ("FASB") issued guidance that requires additional disclosures relating to the rights of offset or other netting arrangements of assets and liabilities that are presented on a net or gross basis in the consolidated balance sheets. In January 2013, FASB issued additional guidance to limit the scope of the new offsetting disclosure requirements to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions. The guidance requires the disclosure of the gross amounts subject to offset, actual amounts offset in accordance with GAAP, and the related net exposure. These changes became effective for TVA on October 1, 2013, and have been applied on a retrospective basis. This guidance relates solely to enhanced disclosures in the notes to the consolidated financial statements and did not have an impact on TVA's financial condition, results of operations, or cash flows. | |
Comprehensive Income. In February 2013, FASB issued guidance that requires public reporting companies under the Securities Act of 1933 to present information about reclassification adjustments from accumulated other comprehensive income (loss) ("AOCI") in their annual and interim financial statements in a single location. The guidance requires that companies present the effect of significant amounts reclassified from each component of AOCI based on its source and the income statement line items affected by the reclassification. This information may be disclosed either in a single note or parenthetically on the face of the financial statements. If a component is not required to be reclassified to net income in its entirety, companies must cross reference to the related footnote for additional information. These changes became effective for TVA on October 1, 2013, and have been applied on a prospective basis. TVA has chosen to disclose the required information in a single note. This guidance relates solely to enhanced disclosures and did not have an impact on TVA's financial condition, results of operations, or cash flows. | |
The following accounting standards have been issued, but as of June 30, 2014, were not effective and had not been adopted by TVA. | |
Revenue Recognition. In May 2014, the FASB issued a new revenue recognition standard that applies to revenue from contracts with customers. The standard requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard becomes effective for TVA on October 1, 2017, and allows for either a full retrospective or a modified retrospective application. Early adoption of the standard is not permitted. TVA is currently evaluating the potential impact of these changes on its consolidated financial statements and related disclosures and the application method to be used. | |
Liabilities. In February 2013, FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date," which defines how entities measure obligations from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date and for which no guidance exists, except for obligations addressed within existing guidance in GAAP. The guidance also requires entities to disclose the nature and amount of the obligation as well as other information about those obligations. The standard becomes effective for TVA on October 1, 2014. Retrospective presentation for all comparative periods presented is required and early adoption is permitted. TVA has evaluated the impact of adopting this guidance and expects no material impact on TVA's financial condition, results of operations, or cash flows. |
Restructuring
Restructuring | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||
Restructuring and Related Activities Disclosure [Text Block] | ' | |||||||
Restructuring | ||||||||
TVA is undertaking cost reduction initiatives with the goal of keeping rates low, keeping reliability high, and continuing to fulfill its broader mission of environmental stewardship and economic development. TVA’s current focus is on reducing operating and maintenance costs through further efficiency gains and streamlining the organization. TVA’s goal is to reduce operating and maintenance costs by $500 million by 2015 as compared to its 2013 budget. Certain employees will be eligible for severance payments as a result of these cost reduction initiatives. During the three and nine months ended June 30, 2014, TVA recorded expense for probable estimated severance. These amounts are included in Accounts payable and accrued liabilities on the June 30, 2014 Consolidated Balance Sheet. The table below summarizes the activity related to severance costs: | ||||||||
Severance Cost Liability Activity | ||||||||
Three Months Ended June 30, 2014 | Nine Months Ended | |||||||
30-Jun-14 | ||||||||
Severance cost liability at beginning of period | $ | 32 | $ | — | ||||
Liabilities incurred during the period | 21 | 56 | ||||||
Actual costs paid during the period | (7 | ) | (10 | ) | ||||
Severance cost liability at end of period | $ | 46 | $ | 46 | ||||
Accounts_Receivable_Net
Accounts Receivable, Net | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Accounts Receivable, Net [Abstract] | ' | |||||||
Accounts Receivable, Net | ' | |||||||
Accounts Receivable, Net | ||||||||
Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA’s accounts receivable: | ||||||||
Accounts Receivable, Net | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Power receivables | $ | 1,484 | $ | 1,495 | ||||
Other receivables | 67 | 73 | ||||||
Allowance for uncollectible accounts | (1 | ) | (1 | ) | ||||
Accounts receivable, net | $ | 1,550 | $ | 1,567 | ||||
Inventories_Net
Inventories, Net | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories, Net | ' | |||||||
Inventories, Net | ||||||||
The table below summarizes the types and amounts of TVA’s inventories: | ||||||||
Inventories, Net | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Materials and supplies inventory | $ | 611 | $ | 620 | ||||
Fuel inventory | 479 | 494 | ||||||
Emission allowance inventory | 13 | 14 | ||||||
Allowance for inventory obsolescence | (40 | ) | (37 | ) | ||||
Inventories, net | $ | 1,063 | $ | 1,091 | ||||
Other_LongTerm_Assets
Other Long-Term Assets | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Other Long-Term Assets | ' | |||||||
Other Long-Term Assets | ||||||||
The table below summarizes the types and amounts of TVA’s other long-term assets: | ||||||||
Other Long-Term Assets | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
EnergyRight® receivables | $ | 119 | $ | 117 | ||||
Unamortized debt issue cost of power bonds | 65 | 75 | ||||||
Loans and other long-term receivables, net | 105 | 73 | ||||||
Prepaid capacity payments | 55 | 62 | ||||||
Restricted cash | 56 | — | ||||||
Currency swap asset, net | 15 | 28 | ||||||
Coal contract derivative assets | 2 | 1 | ||||||
Other | 87 | 89 | ||||||
Other long-term assets | $ | 504 | $ | 445 | ||||
In association with the EnergyRight® Solutions program, local power company customers of TVA ("LPCs") offer financing to end-use customers for the purchase of energy-efficient equipment. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loan receivable that has been in default for 180 days or more or that TVA has determined is uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA’s Consolidated Balance Sheets. As of June 30, 2014 and September 30, 2013, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $33 million. See Note 10 for information regarding the associated financing obligation. |
Regulatory_Assets_and_Liabilit
Regulatory Assets and Liabilities | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | ' | |||||||
Regulatory Assets and Liabilities | ' | |||||||
Regulatory Assets and Liabilities | ||||||||
Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferrals of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below: | ||||||||
Regulatory Assets and Liabilities | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Current regulatory assets | ||||||||
Deferred nuclear generating units | $ | 237 | $ | 237 | ||||
Unrealized losses on commodity derivatives | 137 | 183 | ||||||
Environmental agreements | 77 | 73 | ||||||
Environmental cleanup costs - Kingston ash spill | 53 | 68 | ||||||
Fuel cost adjustment receivable | 62 | — | ||||||
Total current regulatory assets | 566 | 561 | ||||||
Non-current regulatory assets | ||||||||
Deferred pension costs and other post-retirement benefits costs | 3,875 | 4,076 | ||||||
Unrealized losses on interest rate derivatives | 898 | 808 | ||||||
Nuclear decommissioning costs | 898 | 893 | ||||||
Environmental cleanup costs - Kingston ash spill | 449 | 681 | ||||||
Non-nuclear decommissioning costs | 577 | 571 | ||||||
Deferred nuclear generating units | 1,308 | 1,438 | ||||||
Environmental agreements | 139 | 189 | ||||||
Unrealized losses on commodity derivatives | 112 | 139 | ||||||
Other non-current regulatory assets | 310 | 336 | ||||||
Total non-current regulatory assets | 8,566 | 9,131 | ||||||
Total regulatory assets | $ | 9,132 | $ | 9,692 | ||||
Current regulatory liabilities | ||||||||
Fuel cost adjustment tax equivalents | $ | 177 | $ | 176 | ||||
Fuel cost adjustment liability | — | 29 | ||||||
Unrealized gains on commodity derivatives | 4 | 7 | ||||||
Total current regulatory liabilities | 181 | 212 | ||||||
Non-current regulatory liabilities | ||||||||
Unrealized gains on commodity derivatives | 2 | 1 | ||||||
Total non-current regulatory liabilities | 2 | 1 | ||||||
Total regulatory liabilities | $ | 183 | $ | 213 | ||||
Variable_Interest_Entities
Variable Interest Entities | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ' | |||||||
Variable Interest Entities | ' | |||||||
Variable Interest Entities | ||||||||
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. The analysis to determine whether an entity is a VIE considers factors such as contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity, the extent of an entity's activities that either involve or are conducted on behalf of an investor with disproportionate voting rights, and the relationship of voting power to the amount of equity invested in an entity. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The determination of the primary beneficiary requires continual reassessment. | ||||||||
When TVA determines that it has a variable interest in a variable interest entity, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. | ||||||||
Southaven | ||||||||
On August 9, 2013, TVA entered into a lease financing arrangement with Southaven Combined Cycle Generation, LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the “SCCG notes”) and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco, LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests of SCCG. A non-controlling interest in SHLLC is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated. | ||||||||
The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the “SHLLC notes”) and are subject to mandatory redemption pursuant to scheduled amortizing, semi-annual payments due each August 15 and February 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The sale of the SCCG notes, the membership interests in SCCG, and the SHLLC notes all closed on August 9, 2013. The SCCG notes are secured by TVA’s lease payments, and the SHLLC notes are secured by SHLLC’s investment in, and amounts receivable from, SCCG. TVA’s lease payments to SCCG are payable on the same dates as SCCG’s and SHLLC’s semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG’s semi-annual debt service payments, (ii) the amount of SHLLC’s semi-annual debt service payments, and (iii) the amount of scheduled pre-determined payments to be made to Seven States Southaven, LLC on each lease payment date by SHLLC as agreed in SHLLC’s formation documents. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions. | ||||||||
TVA participated in the design, business conduct, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis. | ||||||||
John Sevier | ||||||||
On January 17, 2012, TVA entered into a $1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF"). JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $900 million secured note issuance (the “JSCCG notes”) and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated. | ||||||||
The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the “Holdco notes") and are subject to mandatory redemption pursuant to scheduled amortizing, semi-annual payments due each January 15 and July 15, with a final payment due on January 15, 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes all closed on January 17, 2012. The JSCCG notes are secured by TVA’s lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA’s lease payments to JSCCG are equal to and payable on the same dates as JSCCG’s and Holdco’s semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions. | ||||||||
Due to its participation in the design, business conduct, and credit and financial support of JSCCG and Holdco, TVA has determined that it has a variable interest in both of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco’s membership interests in JSCCG are eliminated in consolidation. | ||||||||
The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of June 30, 2014 and September 30, 2013, as reflected in the Consolidated Balance Sheets are as follows: | ||||||||
Summary of Impact of VIEs on Consolidated Balance Sheets | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Current liabilities of VIE | ||||||||
Accrued interest of VIE | $ | 27 | $ | 12 | ||||
Current portion of membership interests of VIE subject to mandatory redemption | 2 | 2 | ||||||
Current maturities of long-term debt of VIE | 31 | 30 | ||||||
Total current liabilities of VIE | 60 | 44 | ||||||
Other liabilities of VIE | ||||||||
Membership interests of VIE subject to mandatory redemption | 37 | 38 | ||||||
Long-term debt of VIE, net | ||||||||
Long-term debt of VIE | 1,295 | 1,311 | ||||||
Total liabilities of VIE | $ | 1,392 | $ | 1,393 | ||||
Creditors of the VIEs do not have any recourse to the general credit of TVA. TVA does not have any obligations to provide financial support to the VIEs other than as prescribed in the terms of the agreements related to these transactions. |
Kingston_Fossil_Plant_Ash_Spil
Kingston Fossil Plant Ash Spill | 9 Months Ended |
Jun. 30, 2014 | |
Environmental Remediation Obligations [Abstract] | ' |
Kingston Fossil Plant Ash Spill | ' |
Kingston Fossil Plant Ash Spill | |
The Event | |
In December 2008, one of the dredge cells at the Kingston Fossil Plant ("Kingston") failed, and over five million cubic yards of water and coal fly ash flowed out of the cell. TVA is continuing cleanup and recovery efforts in conjunction with federal and state agencies. TVA completed the removal of time-critical ash from the river during the third quarter of 2010. In November 2012, the Environmental Protection Agency ("EPA") and the Tennessee Department of Environment and Conservation ("TDEC") approved a plan to allow the Emory River's natural processes to remediate the remaining ash in the river, and to conduct a long-term monitoring program. TVA estimates that the physical cleanup work (final cleanup work and closure) will be completed in the spring of 2015. A final assessment, issuance of a completion report, and approval by the State of Tennessee and the EPA are expected to occur by the third quarter of 2015. | |
Claims and Litigation | |
See Note 18 — Legal Proceedings — Legal Proceedings Related to the Kingston Ash Spill and Civil Penalty and Natural Resource Damages for the Kingston Ash Spill. | |
Financial Impact | |
Because of the uncertainty at this time of the final costs to complete the work prescribed by the ash disposal plan, a range of reasonable estimates has been developed by cost category. Known amounts, most likely scenarios, or the low end of the range for each category have been accumulated and evaluated to determine the total estimate. The range of costs varies from approximately $1.1 billion to approximately $1.2 billion. | |
TVA recorded an estimate of $1.1 billion for the cost of cleanup related to this event. In August 2009, TVA began using regulatory accounting treatment to defer all actual costs already incurred and expected future costs related to the ash spill. The cost is being charged to expense as it is collected in rates over 15 years, beginning October 1, 2009. As the estimate changes, additional costs may be deferred and charged to expense prospectively as they are collected in future rates. | |
As work continues to progress and more information is available, TVA will review its estimates and revise them as appropriate. Amounts spent since the event through June 30, 2014, totaled $1.0 billion. The remaining estimated liability at June 30, 2014, was $82 million and is included in Current liabilities. | |
TVA has not included the following categories of costs in the above estimate since it has been determined that these costs are currently either not probable or not reasonably estimable: penalties (other than the penalties set out in a June 2010 TDEC order), regulatory directives, natural resources damages (other than payments required under a memorandum of agreement with TDEC and the U.S. Fish and Wildlife Service establishing a process and a method for resolving the natural resource damages claim), future lawsuits, future claims, long-term environmental impact costs, final long-term disposition of the ash processing area, and costs associated with new laws and regulations. There are certain other costs that will be incurred that have not been included in the estimate as they are appropriately accounted for in other areas of the consolidated financial statements. Associated capital asset purchases are recorded in property, plant, and equipment. Ash handling and disposition costs from current plant operations are recorded in operating expenses. A portion of the dredge cell closure costs are also excluded from the estimate, as they are included in the non-nuclear ARO liability. | |
Insurance | |
TVA had property and excess liability insurance programs in place at the time of the Kingston ash spill. TVA pursued claims under both the property and excess liability programs and has settled all of its property insurance claims and some of its excess liability insurance claims. In April 2012, TVA initiated arbitration proceedings against the remaining three excess liability insurance companies in accordance with the policies’ dispute resolution provisions. TVA has successfully resolved two of these proceedings and is pursuing the third, which began in June 2014. TVA is seeking recovery of certain costs incurred in the cleanup project, including the costs of removing ash from property or waters owned by the State of Tennessee, and related expenses. TVA has received insurance proceeds of $267 million, of which $14 million and $175 million were received during the three and nine months ended June 30, 2014, respectively. The insurance proceeds are being recorded as reductions to the regulatory asset and will reduce amounts collected in future rates. |
Other_LongTerm_Liabilities
Other Long-Term Liabilities | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Other Liabilities, Noncurrent [Abstract] | ' | |||||||
Other Long-Term Liabilities | ' | |||||||
Other Long-Term Liabilities | ||||||||
Other long-term liabilities consist primarily of liabilities related to certain derivative instruments as well as liabilities under agreements related to compliance with certain environmental regulations (see Note 18 — Legal Proceedings — Environmental Agreements). The table below summarizes the types and amounts of Other long-term liabilities: | ||||||||
Other Long-Term Liabilities | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Interest rate swap liabilities | $ | 1,289 | $ | 1,199 | ||||
Environmental agreements liability | 139 | 190 | ||||||
EnergyRight® purchase obligation | 150 | 149 | ||||||
Coal contract derivative liabilities | 53 | 35 | ||||||
Membership interests of VIE subject to mandatory redemption | 37 | 38 | ||||||
Commodity swap derivative liabilities | 18 | 36 | ||||||
Currency swap liabilities | 2 | 15 | ||||||
Other | 223 | 199 | ||||||
Total other long-term liabilities | $ | 1,911 | $ | 1,861 | ||||
TVA purchases certain loans receivable from its LPCs in association with the EnergyRight® Solutions program. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loan receivable that has been in default for 180 days or more or that TVA has determined is uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the resulting financing obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA’s Consolidated Balance Sheets. As of June 30, 2014 and September 30, 2013, the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was approximately $37 million. See Note 6 for information regarding the associated loans receivable. |
Asset_Retirement_Obligations
Asset Retirement Obligations | 9 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | ' | |||||||||||||
Asset Retirement Obligations | ' | |||||||||||||
Asset Retirement Obligations | ||||||||||||||
During the nine months ended June 30, 2014, TVA's total ARO liability decreased $352 million. | ||||||||||||||
To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. Prior to June 30, 2014, TVA based its decommissioning cost estimates on cost elements prescribed by the Nuclear Regulatory Commission ("NRC") to dismantle and decommission the radioactive portion of each site with the assumption that decommissioning would occur within the first seven years after plant shut down, which approximates the DECON method of decommissioning. The DECON method requires that radioactive contamination is removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. On June 30, 2014, TVA recorded a change in estimate based on site-specific decommissioning cost studies. Additionally, TVA determined it appropriate to reflect an increase in the probability that certain of its nuclear operating licenses will be extended and that there is a probability that it will be able to delay ultimate decommissioning activities under a SAFSTOR method of decommissioning. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use. As such, TVA ascribed probabilities to both the SAFSTOR and DECON methods of decommissioning in order to estimate its decommissioning obligation. Decommissioning cost studies will be updated for each of TVA’s nuclear units at least every five years. | ||||||||||||||
Additionally, both the nuclear and non-nuclear liabilities were increased by periodic accretion. This was partially offset by ash area settlement projects that were conducted during the nine months ended June 30, 2014. The nuclear and non-nuclear accretion were deferred as regulatory assets, and $30 million of the related regulatory assets was amortized into expense as this amount was collected in rates. | ||||||||||||||
Asset Retirement Obligation Activity | ||||||||||||||
Nuclear | Non-Nuclear | Total | ||||||||||||
Balance at September 30, 2013 | $ | 2,399 | $ | 1,089 | $ | 3,488 | ||||||||
Settlements (ash storage areas) | — | (10 | ) | (10 | ) | |||||||||
Change in estimate as a result of nuclear site-specific studies | (471 | ) | — | (471 | ) | |||||||||
Change in estimate (ash storage areas) | — | (10 | ) | (10 | ) | |||||||||
Accretion (recorded as regulatory asset) | 100 | 39 | 139 | |||||||||||
Balance at June 30, 2014 | $ | 2,028 | $ | 1,108 | $ | 3,136 | (1 | ) | ||||||
Note | ||||||||||||||
(1) The current portion of ARO in the amount of $69 million is included in Accounts payable and accrued liabilities at June 30, 2014. |
Debt_and_Other_Obligations
Debt and Other Obligations | 9 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||
Debt and Other Obligations | ' | ||||||||||||||
Debt and Other Obligations | |||||||||||||||
Debt Outstanding | |||||||||||||||
Total debt outstanding at June 30, 2014, and September 30, 2013, consisted of the following: | |||||||||||||||
Debt Outstanding | |||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||
Short-term debt | |||||||||||||||
Short-term debt, net | $ | 1,759 | $ | 2,432 | |||||||||||
Current maturities of long-term debt of variable interest entities | 31 | 30 | |||||||||||||
Current maturities of power bonds | 1,032 | 32 | |||||||||||||
Total current debt outstanding, net | 2,822 | 2,494 | |||||||||||||
Long-term debt | |||||||||||||||
Long-term debt of variable interest entities | 1,295 | 1,311 | |||||||||||||
Long-term power bonds(1) | 21,092 | 22,400 | |||||||||||||
Unamortized discounts, premiums, and other | (80 | ) | (85 | ) | |||||||||||
Total long-term debt, net | 22,307 | 23,626 | |||||||||||||
Total outstanding debt | $ | 25,129 | $ | 26,120 | |||||||||||
Note | |||||||||||||||
(1) Includes net exchange losses from currency transactions of $98 million at June 30, 2014 and $43 million at September 30, 2013. | |||||||||||||||
Debt Securities Activity | |||||||||||||||
The table below summarizes the long-term debt securities activity for the period from October 1, 2013, to June 30, 2014. | |||||||||||||||
Debt Securities Activity | |||||||||||||||
Date | Amount | Interest Rate | |||||||||||||
Redemptions/Maturities(1) | |||||||||||||||
electronotes® | First Quarter 2014 | $ | 4 | 3.56 | % | ||||||||||
electronotes® | Second Quarter 2014 | 326 | 4.52 | % | |||||||||||
electronotes® | Third Quarter 2014 | 3 | 3.14 | % | |||||||||||
2009 Series A | Nov-13 | 2 | 2.25 | % | |||||||||||
2009 Series B | Dec-13 | 1 | 3.77 | % | |||||||||||
2009 Series A | May-14 | 2 | 2.25 | % | |||||||||||
2009 Series B | Jun-14 | 25 | 3.77 | % | |||||||||||
Total redemptions/maturities of power bonds | 363 | ||||||||||||||
Variable interest entities | Second Quarter 2014 | 15 | 4.3 | % | |||||||||||
Total redemptions/maturities of debt | $ | 378 | |||||||||||||
Note | |||||||||||||||
(1) All redemptions were at 100 percent of par. | |||||||||||||||
Credit Facility Agreements | |||||||||||||||
TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for 2014 with a maturity date of September 30, 2014. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA plans to use the U.S. Treasury credit facility as a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the United States with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at June 30, 2014. The availability of this credit facility may be impacted by how the U.S. government addresses the situation of approaching its debt limit. | |||||||||||||||
TVA also has funding available in the form of three long-term revolving credit facilities totaling $2.5 billion. One $1.0 billion credit facility matures on June 25, 2017, another $1.0 billion credit facility matures on December 13, 2017, and the $500 million credit facility matures on April 5, 2018. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured long-term non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.5 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured long-term non-credit-enhanced debt. At | |||||||||||||||
June 30, 2014, and September 30, 2013, there were approximately $900 million and $800 million, respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 14 — Other Derivative Instruments — Collateral. | |||||||||||||||
Lease/Leaseback Obligations | |||||||||||||||
Prior to 2004, TVA received approximately $945 million in proceeds by entering into lease/leaseback transactions for 24 new peaking combustion turbine units. TVA also received approximately $389 million in proceeds by entering into lease/leaseback transactions for qualified technological equipment and software in 2003. Due to TVA's continuing involvement in the operation and maintenance of the leased units and equipment and its control over the distribution of power produced by the combustion turbine facilities during the leaseback term, TVA accounted for the lease proceeds as financing obligations. At June 30, 2014, and September 30, 2013, the outstanding lease/leaseback obligations were $692 million and $761 million, respectively. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | ' |
Accumulated Other Comprehensive Income (Loss) | |
AOCI represents market valuation adjustments related to TVA’s currency swaps. The currency swaps are cash flow hedges and are the only derivatives in TVA’s portfolio that have been designated and qualify for hedge accounting treatment. TVA records exchange rate gains and losses on its foreign currency-denominated debt in net income and marks its currency swap assets and liabilities to market through other comprehensive income (loss) ("OCI"). TVA then reclassifies an amount out of AOCI into net income, offsetting the exchange gain/loss recorded on the debt. During the three and nine months ended June 30, 2014, TVA reclassified $26 million and $55 million, respectively, of gains related to its cash flow hedges from AOCI to Interest expense. See Note 14. | |
TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in AOCI or that would impact the statements of operations are recorded as regulatory assets or regulatory liabilities. See Note 7, Note 14 — Overview of Accounting Treatment, Note 15 — Fair Value Measurements, and Note 17. |
Risk_Management_Activities_and
Risk Management Activities and Derivative Transactions | 9 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||
Risk Management Activities and Derivative Transactions | ' | ||||||||||||||||||||||
Risk Management Activities and Derivative Transactions | |||||||||||||||||||||||
TVA is exposed to various risks. These include risks related to commodity prices, investment prices, interest rates, currency exchange rates, inflation, and counterparty credit and performance risks. To help manage certain of these risks, TVA has entered into various derivative transactions, principally commodity option contracts, forward contracts, swaps, swaptions, futures, and options on futures. Other than certain derivative instruments in investment funds, TVA's policy is to enter into these derivative transactions solely for hedging purposes and not for speculative purposes. | |||||||||||||||||||||||
Overview of Accounting Treatment | |||||||||||||||||||||||
TVA recognizes certain of its derivative instruments as either assets or liabilities on its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of these instruments depends on (1) whether TVA uses regulatory accounting to defer the derivative gains and losses, (2) whether the derivative instrument has been designated and qualifies for hedge accounting treatment, and (3) if so, the type of hedge relationship (for example, cash flow hedge). | |||||||||||||||||||||||
The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive: | |||||||||||||||||||||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) | |||||||||||||||||||||||
Amount of Mark-to-Market Gain (Loss) Recognized in OCI | |||||||||||||||||||||||
Three Months Ended June 30 | Nine Months Ended June 30 | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Objective of Hedge Transaction | Accounting for Derivative | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Hedging Instrument | |||||||||||||||||||||||
Currency swaps | To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk) | Unrealized gains and losses are recorded in AOCI and reclassified to interest expense to the extent they are offset by gains and losses on the hedged transaction | $ | 1 | $ | 9 | $ | 23 | $ | (7 | ) | ||||||||||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) | |||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | |||||||||||||||||||||||
Three Months Ended June 30 | Nine Months Ended June 30 | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Currency swaps | $ | 26 | $ | 1 | $ | 55 | $ | (57 | ) | ||||||||||||||
Note | |||||||||||||||||||||||
There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt. | |||||||||||||||||||||||
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income on Derivatives | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
June 30(1) | June 30(1) | ||||||||||||||||||||||
Derivative Type | Objective of Derivative | Accounting for Derivative Instrument | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Interest rate swaps | To fix short-term debt variable rate to a fixed rate (interest rate risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities until settlement, at which time the gains/losses are recognized in gain/loss on derivative contracts. | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Commodity contract derivatives | To protect against fluctuations in market prices of purchased coal or natural gas (price risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses due to contract settlements are recognized in fuel expense as incurred. | — | (2 | ) | — | (2 | ) | |||||||||||||||
Commodity derivatives | To protect against fluctuations in market prices of purchased commodities (price risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production. | (6 | ) | — | (21 | ) | (29 | ) | (99 | ) | ||||||||||||
under financial trading program ("FTP") | |||||||||||||||||||||||
Note | |||||||||||||||||||||||
(1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income | |||||||||||||||||||||||
but instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months and nine months ended June 30, 2014 and 2013. | |||||||||||||||||||||||
Mark-to-Market Values of TVA Derivatives | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Derivatives that Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Balance | Balance Sheet Presentation | Balance | Balance Sheet Presentation | ||||||||||||||||||||
Currency swaps | |||||||||||||||||||||||
£200 million Sterling | $ | (2 | ) | Other long-term liabilities | $ | (15 | ) | Other long-term liabilities | |||||||||||||||
£250 million Sterling | 64 | Other long-term assets | 51 | Other long-term assets | |||||||||||||||||||
£150 million Sterling | 7 | Other long-term assets | 10 | Other long-term assets | |||||||||||||||||||
Derivatives that Do Not Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Balance | Balance Sheet Presentation | Balance | Balance Sheet Presentation | ||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
$1.0 billion notional | (946 | ) | Other long-term liabilities | (886 | ) | Other long-term liabilities | |||||||||||||||||
$476 million notional | (331 | ) | Other long-term liabilities | (300 | ) | Other long-term liabilities | |||||||||||||||||
$42 million notional | (12 | ) | Other long-term liabilities | (13 | ) | Other long-term liabilities | |||||||||||||||||
Commodity contract derivatives | (150 | ) | Other long-term assets $2; Other current assets $3; Other long-term liabilities $(54); Accounts payable and accrued liabilities $(101) | (141 | ) | Other long-term assets $1; Other current assets $2; Other long-term liabilities $(35); Accounts payable and accrued liabilities $(109) | |||||||||||||||||
Derivatives under FTP(1) | (90 | ) | Other current assets $(56); Other long-term liabilities $(18); Accounts payable and accrued liabilities $(16) | (166 | ) | Other current assets $(97); Other long-term liabilities $(36); Accounts payable and accrued liabilities $(33) | |||||||||||||||||
Note | |||||||||||||||||||||||
(1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $57 million and $100 million at June 30, 2014 and September 30, 2013, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. | |||||||||||||||||||||||
Cash Flow Hedging Strategy for Currency Swaps | |||||||||||||||||||||||
To protect against exchange rate risk related to three British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurred. TVA had the following currency swaps outstanding as of June 30, 2014: | |||||||||||||||||||||||
Currency Swaps Outstanding | |||||||||||||||||||||||
At June 30, 2014 | |||||||||||||||||||||||
Effective Date of Currency Swap Contract | Associated TVA Bond Issues Currency Exposure | Expiration Date of Swap | Overall Effective | ||||||||||||||||||||
Cost to TVA | |||||||||||||||||||||||
1999 | £200 million | 2021 | 5.81% | ||||||||||||||||||||
2001 | £250 million | 2032 | 6.59% | ||||||||||||||||||||
2003 | £150 million | 2043 | 4.96% | ||||||||||||||||||||
When the dollar strengthens against the British pound sterling, the transaction gain on the Bond liability is offset by a currency exchange loss on the swap contract. Conversely, when the dollar weakens against the British pound sterling, the transaction loss on the Bond liability is offset by an exchange gain on the swap contract. All such exchange gains or losses on the Bond liability are included in Long-term debt, net. The offsetting exchange losses or gains on the swap contracts are recognized in AOCI. If any gain (loss) were to be incurred as a result of the early termination of the foreign currency swap contract, the resulting income (expense) would be amortized over the remaining life of the associated Bond as a component of Interest expense. | |||||||||||||||||||||||
Derivatives Not Receiving Hedge Accounting Treatment | |||||||||||||||||||||||
Interest Rate Derivatives. TVA uses regulatory accounting treatment to defer the mark-to-market ("MtM") gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory assets or liabilities on TVA's Consolidated Balance Sheets and are included in the ratemaking formula when the transactions settle. The values of these derivatives are included in Other long-term assets or Other long-term liabilities on the Consolidated Balance Sheets, and realized gains and losses, if any, are included in TVA's Consolidated Statements of Operations. | |||||||||||||||||||||||
For the three months ended June 30, 2014 and 2013, the changes in market value of the interest rate swaps resulted in deferred unrealized gains (losses) of $(65) million and $252 million, respectively. For the nine months ended June 30, 2014 and 2013, the changes in market value of the interest rate swaps resulted in deferred unrealized gains (losses) of $(90) million and $465 million, respectively. | |||||||||||||||||||||||
Commodity Derivatives. TVA enters into certain derivative contracts for coal and natural gas that require physical delivery of the contracted quantity of the commodity. TVA marks to market all such contracts and defers the market values as regulatory assets or liabilities on a gross basis. At June 30, 2014, TVA's coal and natural gas contract derivatives had terms of four years and up to two years, respectively. | |||||||||||||||||||||||
Commodity Contract Derivatives | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Number of Contracts | Notional Amount | Fair Value (MtM) | Number of Contracts | Notional Amount | Fair Value (MtM) | ||||||||||||||||||
Coal contract derivatives | 34 | 47 million tons | $ | (146 | ) | 19 | 43 million tons | $ | (140 | ) | |||||||||||||
Natural gas contract derivatives | 33 | 63 million mmBtu | $ | (4 | ) | 13 | 39 million mmBtu | $ | (1 | ) | |||||||||||||
Derivatives Under FTP. TVA has an FTP under which it may purchase and sell futures, swaps, options, and combinations of these instruments (as long as they are standard in the industry) to hedge TVA’s exposure to (1) the price of natural gas, fuel oil, electricity, coal, emission allowances, nuclear fuel, and other commodities included in TVA’s fuel cost adjustment calculation, (2) the price of construction materials, and (3) contracts for goods priced in or indexed to foreign currencies. The combined transaction limit for the fuel cost adjustment and construction material transactions is $130 million (based on one-day value at risk). In addition, the maximum hedge volume for the construction material transactions is 75 percent of the underlying net notional volume of the material that TVA anticipates using in approved TVA projects, and the market value of all outstanding hedging transactions involving construction materials is limited to $100 million at the execution of any new transaction. The portfolio value at risk limit for the foreign currency transactions is $5 million and is separate and distinct from the $130 million transaction limit discussed above. TVA's policy prohibits trading financial instruments under the FTP for speculative purposes. | |||||||||||||||||||||||
At June 30, 2014 and September 30, 2013, the risks hedged under the FTP were the economic risks associated with the prices of natural gas, fuel oil, and crude oil. At June 30, 2014 and September 30, 2013, TVA had no outstanding coal contract derivatives under the FTP. There were no futures contracts or options contracts outstanding under the FTP at June 30, 2014, and swap contracts under the FTP had remaining terms of four years or less. TVA plans to continue to manage fuel price volatility through various methods, but is currently evaluating the future use of financial instruments. | |||||||||||||||||||||||
Derivatives Under Financial Trading Program | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Notional Amount | Fair Value (MtM) | Notional Amount | Fair Value (MtM) | ||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||
Natural gas (in mmBtu) | |||||||||||||||||||||||
Futures contracts | — | $ | — | — | $ | — | |||||||||||||||||
Swap contracts | 117,575,000 | (91 | ) | 152,922,500 | (169 | ) | |||||||||||||||||
Option contracts | — | — | — | — | |||||||||||||||||||
Natural gas financial positions | 117,575,000 | $ | (91 | ) | 152,922,500 | $ | (169 | ) | |||||||||||||||
Fuel oil/crude oil (in barrels) | |||||||||||||||||||||||
Futures contracts | — | $ | — | — | $ | — | |||||||||||||||||
Swap contracts | — | 1 | 1,205,000 | 3 | |||||||||||||||||||
Option contracts | — | — | — | — | |||||||||||||||||||
Fuel oil/crude oil financial positions | — | $ | 1 | 1,205,000 | $ | 3 | |||||||||||||||||
Note | |||||||||||||||||||||||
Fair value amounts presented are based on net commodity position with the futures commission merchant or other counterparty. Notional amounts disclosed represent the net absolute value of contractual amounts. | |||||||||||||||||||||||
TVA defers all FTP unrealized gains (losses) as regulatory liabilities (assets) and records only realized gains or losses to match the delivery period of the underlying commodity. In addition to the open commodity derivatives disclosed above, TVA had closed derivative contracts with market values of $(3) million at June 30, 2014, and $(8) million at September 30, 2013. Unrealized gains and losses related to the FTP at June 30, 2014 and September 30, 2013 were as follows: | |||||||||||||||||||||||
Financial Trading Program Unrealized Gains (Losses) | |||||||||||||||||||||||
FTP unrealized gains (losses) deferred as regulatory liabilities (assets) | At June 30, 2014 | At September 30, 2013 | |||||||||||||||||||||
Natural gas | $ | (91 | ) | $ | (169 | ) | |||||||||||||||||
Fuel oil/crude oil | 1 | 3 | |||||||||||||||||||||
Realized gains and losses related to the FTP for the three and nine months ended June 30, 2014 and 2013 were as follows: | |||||||||||||||||||||||
Financial Trading Program Realized Gains (Losses) | |||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||||||
Decrease (increase) in fuel expense | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Natural gas | $ | (5 | ) | $ | (13 | ) | $ | (23 | ) | $ | (60 | ) | |||||||||||
Fuel oil/crude oil | — | — | 2 | 2 | |||||||||||||||||||
Coal | — | — | — | (1 | ) | ||||||||||||||||||
Financial Trading Program Realized Gains (Losses) | |||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||||||
Decrease (increase) in purchased power expense | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Natural gas | $ | (1 | ) | $ | (8 | ) | $ | (9 | ) | $ | (40 | ) | |||||||||||
Offsetting of Derivative Assets and Liabilities | |||||||||||||||||||||||
The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets as of June 30, 2014, and September 30, 2013, are shown in the table below. | |||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||
Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Balance Sheet (1) | Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Currency swaps | $ | 71 | $ | (56 | ) | $ | 15 | ||||||||||||||||
Commodity derivatives under FTP | 56 | (55 | ) | 1 | |||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | 127 | (111 | ) | 16 | |||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | 5 | — | 5 | ||||||||||||||||||||
Total | $ | 132 | $ | (111 | ) | $ | 21 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||
Currency swap (3) | $ | (2 | ) | $ | — | $ | (2 | ) | |||||||||||||||
Interest rate swaps (3) | (1,289 | ) | — | (1,289 | ) | ||||||||||||||||||
Commodity derivatives under FTP | (146 | ) | 112 | (34 | ) | ||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | (1,437 | ) | 112 | (1,325 | ) | ||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | (155 | ) | — | (155 | ) | ||||||||||||||||||
Total | $ | (1,592 | ) | $ | 112 | $ | (1,480 | ) | |||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||||
Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Balance Sheet (1) | Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Currency swaps | $ | 61 | $ | (33 | ) | $ | 28 | ||||||||||||||||
Commodity derivatives under FTP | 101 | (98 | ) | 3 | |||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | 162 | (131 | ) | 31 | |||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | 3 | — | 3 | ||||||||||||||||||||
Total | $ | 165 | $ | (131 | ) | $ | 34 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||
Currency swap (3) | $ | (15 | ) | $ | — | $ | (15 | ) | |||||||||||||||
Interest rate swaps (3) | (1,199 | ) | — | (1,199 | ) | ||||||||||||||||||
Commodity derivatives under FTP | (267 | ) | 198 | (69 | ) | ||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | (1,481 | ) | 198 | (1,283 | ) | ||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | (144 | ) | — | (144 | ) | ||||||||||||||||||
Total | $ | (1,625 | ) | $ | 198 | $ | (1,427 | ) | |||||||||||||||
Notes | |||||||||||||||||||||||
(1) Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions. | |||||||||||||||||||||||
(2) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the balance sheets. | |||||||||||||||||||||||
(3) Letters of credit of approximately $900 million and $800 million were posted as collateral at June 30, 2014 and September 30, 2013, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. | |||||||||||||||||||||||
Other Derivative Instruments | |||||||||||||||||||||||
Investment Fund Derivatives. Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT"), Asset Retirement Trust ("ART"), and Supplemental Executive Retirement Plan ("SERP"). All securities in the trusts are classified as trading. See Note 15 — Investments for a discussion of the trusts' objectives and the types of investments included in the various trusts. These trusts may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At June 30, 2014, and September 30, 2013, the fair value of derivative instruments in these trusts was not material to TVA's consolidated financial statements. | |||||||||||||||||||||||
Collateral. TVA's interest rate swaps and currency swaps contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At June 30, 2014, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $1.3 billion. TVA's collateral obligations at June 30, 2014, under these arrangements were approximately $900 million, for which TVA had posted approximately $900 million in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the contract as a result of this posted collateral. | |||||||||||||||||||||||
For all of its derivative instruments with credit-risk related contingent features: | |||||||||||||||||||||||
• | If TVA remains a majority-owned U.S. government entity but Standard & Poor's Financial Services, LLC ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA's credit rating to AA or Aa2, respectively, TVA's collateral obligations would likely increase by $22 million; and | ||||||||||||||||||||||
• | If TVA ceases to be majority-owned by the U.S. government, TVA's credit rating would likely be downgraded and TVA would be required to post additional collateral. | ||||||||||||||||||||||
Counterparty Credit Risk | |||||||||||||||||||||||
Credit risk is the exposure to economic loss that would occur as a result of a counterparty's nonperformance of its contractual obligations. Where exposed to counterparty credit risk, TVA analyzes the counterparty's financial condition prior to entering into an agreement, establishes credit limits, monitors the appropriateness of those limits, as well as any changes in the creditworthiness of the counterparty on an ongoing basis, and employs credit mitigation measures, such as collateral or prepayment arrangements and master purchase and sale agreements, to mitigate credit risk. | |||||||||||||||||||||||
Credit of Customers. The majority of TVA's counterparty credit risk is associated with trade accounts receivable from delivered power sales to LPCs, all located in the Tennessee Valley region. To a lesser extent, TVA is exposed to credit risk from industries and federal agencies directly served and from exchange power arrangements with a small number of investor-owned regional utilities related to either delivered power or the replacement of open positions of longer-term purchased power or fuel agreements. TVA had concentrations of accounts receivable from three LPCs that represented 27 percent of total outstanding accounts receivable at both June 30, 2014 and September 30, 2013. | |||||||||||||||||||||||
Credit of Derivative Counterparties. TVA has entered into derivative contracts for hedging purposes, and TVA's NDT fund and defined benefit pension plan have entered into derivative contracts for investment purposes. If a counterparty to one of TVA's hedging transactions defaults, TVA might incur substantial costs in connection with entering into a replacement hedging transaction. If a counterparty to the derivative contracts into which the NDT fund and the pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking and coal industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At June 30, 2014, all of TVA's currency swaps, interest rate swaps, and commodity derivatives under the FTP were with counterparties whose Moody's credit rating was Baa2 or higher. At June 30, 2014, all of TVA's coal contract derivatives were with counterparties whose Moody's credit rating, or TVA's internal analysis when such information was unavailable, was Caa1 or higher. See Derivatives Not Receiving Hedge Accounting Treatment. | |||||||||||||||||||||||
TVA currently utilizes two active futures commission merchants ("FCMs") to clear commodity contracts, including futures, options, and similar financial derivatives. These transactions are executed under the FTP by the FCMs on exchanges on behalf of TVA. TVA maintains margin cash accounts with the FCMs. TVA makes deposits to the margin cash accounts to adequately cover any net liability positions on its derivatives transacted with the FCMs. See the note to the Mark-to-Market Values of TVA Derivatives table. | |||||||||||||||||||||||
Credit of Suppliers. If one of TVA's fuel or purchased power suppliers fails to perform under the terms of its contract with TVA, TVA might lose the money that it paid to the supplier under the contract and have to purchase replacement fuel or power on the spot market, perhaps at a significantly higher price than TVA was entitled to pay under the contract. In addition, TVA might not be able to acquire replacement fuel or power in a timely manner and thus might be unable to satisfy its own obligations to deliver power. To help ensure a reliable supply of coal, TVA had coal contracts with multiple suppliers at June 30, 2014. The contracted supply of coal is sourced from multiple geographic regions of the United States and is to be delivered via various transportation methods (for example, barge, rail and truck). TVA purchases the majority of its natural gas requirements from a variety of suppliers under short-term contracts. | |||||||||||||||||||||||
TVA has a power purchase agreement that expires on March 31, 2032, with a supplier of electricity for 440 megawatts ("MW") of summer net capability from a lignite-fired generating plant. TVA has determined that the supplier has the equivalent of a non-investment grade credit rating; therefore, the supplier has provided credit assurance to TVA under the terms of the agreement. | |||||||||||||||||||||||
The United States Enrichment Corporation ("USEC"), a subsidiary of the parent company, USEC, Inc., was TVA’s largest directly served customer in 2013. On May 24, 2013, USEC announced its intention to cease enrichment activities at its Paducah, Kentucky site. TVA and USEC have subsequently completed agreements to extend power sales to facilitate the cessation of enrichment activities and to support non-enrichment activities at the site at a greatly reduced level. On March 5, 2014, USEC, Inc. filed a voluntary petition and a plan of reorganization under Chapter 11 of the bankruptcy code in the U.S. Bankruptcy Court for the District of Delaware. USEC was not included as a debtor in the Chapter 11 filing for the parent company. | |||||||||||||||||||||||
While USEC is a TVA supplier of enrichment services for uranium for fueling TVA's nuclear units, TVA has sufficient nuclear fuel inventory available to mitigate near-term supply risks, and also expects to be able to procure material at reasonable rates in the market for nuclear fuel. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. | |||||||||||||||||||
Valuation Techniques | |||||||||||||||||||
The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows: | |||||||||||||||||||
Level 1 | — | Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing. | |||||||||||||||||
Level 2 | — | Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means. | |||||||||||||||||
Level 3 | — | Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. | |||||||||||||||||
A financial instrument's level within the fair value hierarchy (where Level 3 is the lowest and Level 1 is the highest) is based on the lowest level of input significant to the fair value measurement. | |||||||||||||||||||
The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP assets, all changes in fair value of these assets and liabilities have been reflected as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements. | |||||||||||||||||||
Investments | |||||||||||||||||||
At June 30, 2014, Investment funds were composed of $1.9 billion of securities classified as trading and measured at fair value and less than $1 million of equity investments not required to be measured at fair value. Trading securities are held in the NDT, ART, and SERP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. TVA established a SERP for certain executives in critical positions to provide supplemental pension benefits tied to compensation that exceeds limits set by Internal Revenue Service rules applicable to the qualified defined benefit pension plan. The NDT and SERP are invested in a mix of investments generally designed to achieve a return in line with overall equity market performance, and the ART is invested in a mix of investments generally designed to achieve a return in line with equity and fixed-income market performance. | |||||||||||||||||||
The NDT, ART, and SERP are composed of multiple types of investments and are managed by external institutional managers. Most U.S. and international equities, Treasury inflation-protected securities, real estate investment trust securities, and cash securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs. | |||||||||||||||||||
Private partnership investments may include holdings of investments in private real estate, venture capital, buyout, mezzanine or subordinated debt, restructuring or distressed debt, and special situations through funds managed by third-party investment managers. Investments in private partnerships generally involve a three-to-four-year period where the investor contributes capital. This is followed by a period of distribution, typically over several years. The investment period is generally, at a minimum, ten years or longer. The NDT had unfunded commitments related to private partnerships of $128 million at June 30, 2014. These investments have no redemption or limited redemption options and may also have imposed restrictions on the NDT’s ability to liquidate its investment. There are no readily available quoted exchange prices for these investments. The fair value of the investments is based on TVA’s ownership percentage of the fair value of the underlying investments as provided by the investment managers. These investments are typically valued on a quarterly basis. TVA’s private partnership investments are valued at net asset values ("NAV") as a practical expedient for fair value. TVA classifies its interest in these types of investments as Level 3 within the fair value hierarchy. | |||||||||||||||||||
Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held by the NDT, ART, and SERP consist of a single class of securities, such as equity, debt, or foreign currency securities, or multiple classes of securities. All underlying positions in these commingled funds are either exchange traded (Level 1) or measured using observable inputs for similar instruments (Level 2). The fair value of commingled funds is based on NAV per fund share (the unit of account), derived from the prices of the underlying securities in the funds. These commingled funds can be redeemed at the measurement date NAV and are classified as Level 2 valuations. | |||||||||||||||||||
Realized and unrealized gains and losses on trading securities are recognized in current earnings and are based on average cost. The gains and losses of the NDT and ART are subsequently reclassified to a regulatory liability or asset account in accordance with TVA's regulatory accounting policy. See Note 1 — Cost-Based Regulation. TVA recorded unrealized gains and losses related to its trading securities held as of the end of each period as follows: | |||||||||||||||||||
Unrealized Investment Gains (Losses) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||
Financial Statement Presentation | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
SERP | Other income (expense) | $ | 1 | $ | (1 | ) | $ | 2 | $ | — | |||||||||
NDT | Regulatory asset | 36 | (42 | ) | 72 | 16 | |||||||||||||
ART | Regulatory asset | 9 | (6 | ) | 27 | 16 | |||||||||||||
Currency and Interest Rate Swaps | |||||||||||||||||||
See Note 14 — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments. | |||||||||||||||||||
Commodity Contract Derivatives and Commodity Derivatives Under FTP | |||||||||||||||||||
Commodity Contract Derivatives. These contracts are classified as Level 3 valuations and are valued based on income approaches. TVA develops an overall coal price forecast using widely used short-term and mid-range market data from an external pricing specialist in addition to long-term internal estimates. To value the volume option component of applicable coal contracts, TVA uses a Black-Scholes pricing model which includes inputs from the overall coal price forecast, contract-specific terms, and other market inputs. | |||||||||||||||||||
Commodity Derivatives Under FTP. These contracts are valued based on market approaches which utilize Chicago Mercantile Exchange ("CME") quoted prices and other observable inputs. Futures and options contracts settled on the CME are classified as Level 1 valuations. Swap contracts are valued using a pricing model based on CME inputs and are subject to nonperformance risk outside of the exit price. These contracts are classified as Level 2 valuations. | |||||||||||||||||||
See Note 14 — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Derivatives Under FTP for a discussion of the nature and purpose of coal contracts and derivatives under TVA's FTP. | |||||||||||||||||||
Nonperformance Risk | |||||||||||||||||||
The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market. | |||||||||||||||||||
Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs"). TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the company. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2013) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. The application of CVAs resulted in a $3 million decrease in the fair value of assets and a $1 million decrease in the fair value of liabilities at June 30, 2014. | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2014, and September 30, 2013. Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TVA's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the determination of the fair value of the assets and liabilities and their classification in the fair value hierarchy levels. | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
At June 30, 2014 | |||||||||||||||||||
Assets | Quoted Prices in Active | Significant Other | Significant | Total | |||||||||||||||
Markets for | Observable Inputs | Unobservable | |||||||||||||||||
Identical Assets | (Level 2) | Inputs | |||||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||||
Investments | |||||||||||||||||||
Equity securities | $ | 177 | $ | — | $ | — | $ | 177 | |||||||||||
Debt securities | |||||||||||||||||||
U.S. government corporations and | 58 | 42 | — | 100 | |||||||||||||||
agencies | |||||||||||||||||||
Corporate debt securities | — | 313 | — | 313 | |||||||||||||||
Residential mortgage-backed securities | — | 13 | — | 13 | |||||||||||||||
Commercial mortgage-backed securities | — | 7 | — | 7 | |||||||||||||||
Collateralized debt obligations | — | 26 | — | 26 | |||||||||||||||
Private partnerships | — | — | 188 | 188 | |||||||||||||||
Commingled funds(2) | |||||||||||||||||||
Equity security commingled funds | — | 931 | — | 931 | |||||||||||||||
Debt security commingled funds | — | 147 | — | 147 | |||||||||||||||
Total investments | 235 | 1,479 | 188 | 1,902 | |||||||||||||||
Currency swaps | — | 15 | — | 15 | |||||||||||||||
Commodity contract derivatives | — | — | 5 | 5 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 1 | — | 1 | |||||||||||||||
Total | $ | 235 | $ | 1,495 | $ | 193 | $ | 1,923 | |||||||||||
Liabilities | Quoted Prices in Active Markets for Identical Liabilities | Significant Other | Significant | Total | |||||||||||||||
(Level 1) | Observable Inputs | Unobservable | |||||||||||||||||
(Level 2) | Inputs | ||||||||||||||||||
(Level 3) | |||||||||||||||||||
Currency swaps | $ | — | $ | 2 | $ | — | 2 | ||||||||||||
Interest rate swaps | — | 1,289 | — | 1,289 | |||||||||||||||
Commodity contract derivatives | — | 4 | 151 | 155 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 34 | — | 34 | |||||||||||||||
Total | $ | — | $ | 1,329 | $ | 151 | $ | 1,480 | |||||||||||
Notes | |||||||||||||||||||
(1) Due to the right of setoff and method of settlement, TVA elects to record commodity derivatives under the FTP based on its net commodity position with the counterparty or FCM. Deposits are made to TVA's margin cash accounts held with each FCM to offset any net liability positions in full for derivatives that are transacted with FCMs. TVA records currency swaps net of cash collateral received from or paid to the counterparty. See Note 14 — Offsetting of Derivative Assets and Liabilities. | |||||||||||||||||||
(2) Commingled funds represent investment funds comprising multiple individual financial instruments and are classified in the table based on their existing investment portfolio as of the measurement date. Commingled funds primarily composed of one class of security are classified in that category. | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
At September 30, 2013 | |||||||||||||||||||
Assets | Quoted Prices in Active | Significant Other | Significant | Total | |||||||||||||||
Markets for | Observable Inputs | Unobservable | |||||||||||||||||
Identical Assets | (Level 2)(1) | Inputs | |||||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||||
Investments | |||||||||||||||||||
Equity securities | $ | 151 | $ | — | $ | — | $ | 151 | |||||||||||
Debt securities | |||||||||||||||||||
U.S. government corporations and | 38 | 67 | — | 105 | |||||||||||||||
agencies | |||||||||||||||||||
Corporate debt securities | — | 255 | — | 255 | |||||||||||||||
Residential mortgage-backed securities | — | 25 | — | 25 | |||||||||||||||
Commercial mortgage-backed securities | — | 7 | — | 7 | |||||||||||||||
Collateralized debt obligations | — | 10 | — | 10 | |||||||||||||||
Private partnerships | — | — | 159 | 159 | |||||||||||||||
Commingled funds(2) | |||||||||||||||||||
Equity security commingled funds | — | 741 | — | 741 | |||||||||||||||
Debt security commingled funds | — | 248 | — | 248 | |||||||||||||||
Total investments | 189 | 1,353 | 159 | 1,701 | |||||||||||||||
Currency swaps | — | 28 | — | 28 | |||||||||||||||
Commodity contract derivatives | — | — | 3 | 3 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 3 | — | 3 | |||||||||||||||
Total | $ | 189 | $ | 1,384 | $ | 162 | $ | 1,735 | |||||||||||
Liabilities | Quoted Prices in Active Markets for Identical Liabilities | Significant Other | Significant | Total | |||||||||||||||
(Level 1) | Observable Inputs | Unobservable | |||||||||||||||||
(Level 2) | Inputs | ||||||||||||||||||
(Level 3) | |||||||||||||||||||
Currency swaps | $ | — | $ | 15 | $ | — | 15 | ||||||||||||
Interest rate swaps | — | 1,199 | — | 1,199 | |||||||||||||||
Commodity contract derivatives | — | 1 | 143 | 144 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 69 | — | 69 | |||||||||||||||
Total | $ | — | $ | 1,284 | $ | 143 | $ | 1,427 | |||||||||||
Notes | |||||||||||||||||||
(1) Due to the right of setoff and method of settlement, TVA elects to record commodity derivatives under the FTP based on its net commodity position with the counterparty or FCM. Deposits are made to TVA's margin cash accounts held with each FCM to offset any net liability positions in full for derivatives that are transacted with FCMs. TVA records currency swaps net of cash collateral received from or paid to the counterparty. See Note 14 — Offsetting of Derivative Assets and Liabilities. | |||||||||||||||||||
(2) Commingled funds represent investment funds comprising multiple individual financial instruments and are classified in the table based on their existing investment portfolio as of the measurement date. Commingled funds primarily composed of one class of security are classified in that category. | |||||||||||||||||||
TVA uses internal and external valuation specialists for the calculation of its fair value measurements classified as Level 3. Analytical testing is performed on the change in fair value measurements each period to ensure the valuation is reasonable based on changes in general market assumptions. Significant changes to the estimated data used for unobservable inputs, in isolation or combination, may result in significant variations to the fair value measurement reported. | |||||||||||||||||||
The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): | |||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||
Private | Commodity Contract Derivatives | Private | Commodity Contract Derivatives | ||||||||||||||||
Partnerships | Partnerships | ||||||||||||||||||
Balance at beginning of period | $ | 137 | $ | (148 | ) | $ | 53 | $ | (267 | ) | |||||||||
Purchases | 9 | — | 93 | — | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||
Sales | (1 | ) | — | (3 | ) | — | |||||||||||||
Settlements | — | — | — | — | |||||||||||||||
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 5 | 39 | 7 | 158 | |||||||||||||||
Balance at June 30, 2013 | $ | 150 | $ | (109 | ) | $ | 150 | $ | (109 | ) | |||||||||
Balance at beginning of period | $ | 180 | $ | (131 | ) | $ | 159 | $ | (140 | ) | |||||||||
Purchases | 7 | — | 23 | — | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||
Sales | (6 | ) | — | (7 | ) | — | |||||||||||||
Settlements | — | — | — | — | |||||||||||||||
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 7 | (15 | ) | 13 | (6 | ) | |||||||||||||
Balance at June 30, 2014 | $ | 188 | $ | (146 | ) | $ | 188 | $ | (146 | ) | |||||||||
There were no realized gains or losses related to the instruments measured at fair value using significant unobservable inputs that affected net income during the three and nine months ended June 30, 2014. All unrealized gains and losses related to these instruments have been reflected as increases or decreases in regulatory assets and liabilities. See Note 7. | |||||||||||||||||||
The following table presents quantitative information related to the significant unobservable inputs used in the measurement of fair value of TVA's assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||
Fair Value at | Valuation Technique(s) | Unobservable Inputs | Range | ||||||||||||||||
30-Jun-14 | |||||||||||||||||||
Assets | |||||||||||||||||||
Commodity contract derivatives | $ | 5 | Discounted cash flow | Credit risk | 26 | % | * | ||||||||||||
Pricing model | Coal supply and demand | 0.9 - 1.1 billion tons/year | |||||||||||||||||
Long-term market prices | $12.00 - $67.07/ton | ||||||||||||||||||
Liabilities | |||||||||||||||||||
Commodity contract derivatives | $ | 151 | Pricing model | Coal supply and demand | 0.9 - 1.1 billion tons/year | ||||||||||||||
Long-term market prices | $12.00 - $67.07/ton | ||||||||||||||||||
* Applies to only one contract. | |||||||||||||||||||
Other Financial Instruments Not Recorded at Fair Value | |||||||||||||||||||
TVA uses the methods and assumptions described below to estimate the fair value of each significant class of financial instrument. The fair values of the financial instruments held at June 30, 2014, and September 30, 2013, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated fair values of TVA's financial instruments not recorded at fair value at June 30, 2014, and September 30, 2013, were as follows: | |||||||||||||||||||
Estimated Values of Financial Instruments Not Recorded at Fair Value | |||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||
Valuation Classification | Carrying | Fair | Carrying | Fair | |||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||
EnergyRight® receivables (including current portion) | Level 2 | $ | 152 | $ | 152 | $ | 150 | $ | 150 | ||||||||||
Loans and other long-term receivables, net | Level 2 | $ | 105 | $ | 96 | $ | 73 | $ | 67 | ||||||||||
EnergyRight® purchase obligation (including current portion) | Level 2 | $ | 187 | $ | 204 | $ | 186 | $ | 210 | ||||||||||
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | Level 2 | $ | 39 | $ | 50 | $ | 40 | $ | 50 | ||||||||||
Long-term outstanding power bonds (including current maturities), net | Level 2 | $ | 22,044 | $ | 25,603 | $ | 22,347 | $ | 24,603 | ||||||||||
Long-term debt of variable interest entities (including current maturities) | Level 2 | $ | 1,326 | $ | 1,441 | $ | 1,341 | $ | 1,386 | ||||||||||
Due to the short-term maturity of Cash and cash equivalents, Restricted cash and investments, and Short-term debt, net, each considered a Level 1 valuation classification, the carrying amounts of these instruments approximate their fair values. | |||||||||||||||||||
The fair values of the EnergyRight® Solutions receivables and loans and other long-term receivables are estimated by determining the present values of future cash flows using discount rates equal to lending rates for similar loans made to borrowers with similar credit ratings and similar remaining maturities, where applicable. | |||||||||||||||||||
The fair value of the long-term debt traded in the public market is determined by multiplying the par value of the debt by the indicative market price at the balance sheet date. The fair values of the EnergyRight® Solutions purchase obligation and other long-term debt are estimated by determining the present value of future cash flows using current market rates for similar obligations, giving effect to credit ratings and remaining maturities. |
Other_Income_Expense_Net
Other Income (Expense), Net | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||||||
Other Income (Expense), Net | ' | ||||||||||||||||
Other Income (Expense), Net | |||||||||||||||||
Income and expenses not related to TVA’s operating activities are summarized in the following table: | |||||||||||||||||
Other Income (Expense), Net | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
External services | $ | 3 | $ | 6 | $ | 15 | $ | 17 | |||||||||
Interest income | 6 | 5 | 17 | 17 | |||||||||||||
Gains (losses) on investments | 2 | — | 4 | 2 | |||||||||||||
Miscellaneous | (1 | ) | (1 | ) | 1 | — | |||||||||||
Total other income (expense), net | $ | 10 | $ | 10 | $ | 37 | $ | 36 | |||||||||
Benefit_Plans
Benefit Plans | 9 Months Ended | ||||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Benefit Plans | ' | ||||||||||||||||||||||||||||||||
Benefit Plans | |||||||||||||||||||||||||||||||||
TVA sponsors a qualified defined benefit pension plan (the "Plan") that covers most of its full-time employees, a qualified defined contribution plan that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other postemployment benefits, such as workers' compensation, and the SERP. | |||||||||||||||||||||||||||||||||
On April 11, 2014, the Tennessee Valley Authority Retirement System ("TVARS") Board approved amendments to the qualified defined benefit plan effective June 30, 2014. These amendments close the defined benefit plan to new employees and certain rehires. These employees will be eligible for a retirement benefit as participants in the defined contribution plan only. | |||||||||||||||||||||||||||||||||
The benefit structures of the qualified defined benefit plan for current employees and retirees — Original Benefit Structure and Cash Balance Benefit Structure — have not been changed. The provisions of the defined contribution plan for these employees will also remain unchanged. | |||||||||||||||||||||||||||||||||
For those employees who are eligible to participate in the new defined contribution plan only, TVA will provide an automatic, non-elective contribution equal to 4.5 percent of base compensation. In addition, TVA will contribute 75 cents to a matching account for each dollar contributed on a before- and/or after-tax basis, with maximum matching contributions of 4.5 percent of base compensation. | |||||||||||||||||||||||||||||||||
The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and nine months ended June 30, 2014, and 2013, were as follows: | |||||||||||||||||||||||||||||||||
Components of TVA’s Benefit Plans | |||||||||||||||||||||||||||||||||
For the Three Months Ended June 30 | For the Nine Months Ended June 30 | ||||||||||||||||||||||||||||||||
Pension Benefits | Other Post-Retirement Benefits | Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Service cost | $ | 33 | $ | 38 | $ | 5 | $ | 6 | $ | 98 | $ | 115 | $ | 14 | $ | 18 | |||||||||||||||||
Interest cost | 139 | 117 | 8 | 8 | 418 | 351 | 24 | 23 | |||||||||||||||||||||||||
Expected return on plan assets | (109 | ) | (107 | ) | — | — | (326 | ) | (321 | ) | — | — | |||||||||||||||||||||
Amortization of prior service cost | (5 | ) | (6 | ) | (2 | ) | (2 | ) | (16 | ) | (17 | ) | (5 | ) | (5 | ) | |||||||||||||||||
Recognized net actuarial loss | 71 | 95 | 3 | 6 | 214 | 283 | 8 | 19 | |||||||||||||||||||||||||
Total net periodic benefit cost recognized | $ | 129 | $ | 137 | $ | 14 | $ | 18 | $ | 388 | $ | 411 | $ | 41 | $ | 55 | |||||||||||||||||
TVA contributes to the Plan such amounts as are necessary on an actuarial basis to provide the Plan with assets sufficient to meet TVA-funded benefit obligations to be paid to members. In consideration of TVA’s $1.0 billion contribution to the Plan in September 2009, the Plan's Rules and Regulations ("Plan's Rules") were amended to temporarily suspend the minimum annual contribution requirements for a four year period from 2010 through 2013. In August 2013, the TVA Board approved a $250 million contribution to the Plan for 2014, which exceeds the minimum required by the Plan's Rules. As of June 30, 2014, TVA had contributed $126 million and will contribute the remaining $124 million by September 30, 2014. TVA does not separately set aside assets to fund other benefit costs, but rather funds such costs on an as-paid basis. For the nine months ended June 30, 2014, TVA provided approximately $23 million, net of rebates and subsidies, to other post-retirement benefit plans and approximately $6 million to the SERP. For the nine months ended June 30, 2013, TVA provided approximately $34 million, net of rebates and subsidies, to other post-retirement benefit plans and approximately $6 million to the SERP. |
Legal_Proceedings
Legal Proceedings | 9 Months Ended | |
Jun. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Contingencies and Legal Proceedings | ' | |
Contingencies and Legal Proceedings | ||
Contingencies | ||
Nuclear Insurance. The Price-Anderson Act provides a layered framework of protection to compensate for losses arising from a nuclear event in the United States. For the first layer, all of the NRC nuclear plant licensees, including TVA, purchase $375 million of nuclear liability insurance from American Nuclear Insurers for each plant with an operating license. Funds for the second layer, the Secondary Financial Program, would come from an assessment of up to $127 million from the licensees of each of the 104 NRC licensed reactors in the United States. The assessment for any nuclear accident would be limited to $19 million per year per unit. American Nuclear Insurers, under a contract with the NRC, administers the Secondary Financial Program. With its six licensed units, TVA could be required to pay a maximum of $764 million per nuclear incident, but it would have to pay no more than $114 million per incident in any one year. When the contributions of the nuclear plant licensees are added to the insurance proceeds of $375 million, over $13.0 billion, including a five percent surcharge for legal expenses, would be available. Under the Price-Anderson Act, if the first two layers are exhausted, the U.S. Congress is required to take action to provide additional funds to cover the additional losses. | ||
TVA carries property, decommissioning, and decontamination insurance of $4.6 billion for its licensed nuclear plants, with up to $2.1 billion available for a loss at any one site, to cover the cost of stabilizing or shutting down a reactor after an accident. Some of this insurance, which is purchased from Nuclear Electric Insurance Limited ("NEIL"), may require the payment of retrospective premiums up to a maximum of approximately $120 million. | ||
TVA purchases accidental outage (business interruption) insurance for TVA’s nuclear sites from NEIL. In the event that an accident covered by this policy takes a nuclear unit offline or keeps a nuclear unit offline, NEIL will pay TVA, after a waiting period, an indemnity (a set dollar amount per week) up to a maximum indemnity of $490 million per unit. This insurance policy may require the payment of retrospective premiums up to a maximum of approximately $35 million. | ||
Decommissioning Costs. TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to coal-fired generating plants and nuclear generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. | ||
Nuclear. At June 30, 2014, the present value of the estimated future decommissioning cost of $2.0 billion was included in AROs. The actual decommissioning costs may vary from TVA's estimates because of, among other things, changes in current assumptions, such as decommissioning method, the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. Utilities that own and operate nuclear plants are required to use different procedures in calculating nuclear decommissioning obligations under GAAP than those that are used in calculating nuclear decommissioning obligations when reporting to the NRC for the purposes of the NRC minimum funding requirements calculation. The estimated decommissioning obligations as calculated using the NRC methodology differ from the AROs recorded by TVA under GAAP primarily due to differences in the type of costs included in the estimates, the basis for estimating such costs, and assumptions regarding the decommissioning alternatives to be used, potential license renewals, and decommissioning cost escalation rates. | ||
TVA maintains a NDT to provide funding for the ultimate decommissioning of its nuclear power plants. Under NRC regulations, if the minimum funding requirements calculated under the NRC methodology are less than the future value of the NTD funds, also calculated under the NRC methodology, then the NRC requires either further funding or other financial assurance. TVA monitors the value of its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments will be available to support decommissioning. TVA’s nuclear power units are currently authorized to operate until 2020-2036, depending on the unit. It may be possible to extend the operating life of some of the units with approval from the NRC. See Note 7 and Note 11. | ||
Non-Nuclear Decommissioning. The present value of the estimated future non-nuclear decommissioning ARO was $1.1 billion at June 30, 2014. This decommissioning cost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. | ||
TVA maintains an ART to help fund the ultimate decommissioning of its non-nuclear power assets. Estimates involved in determining if additional funding will be made to the ART include inflation rate and rate of return projections on the fund investments. See Note 7 and Note 11. | ||
Environmental Matters. TVA’s power generation activities, like those across the utility industry and in other industrial sectors, are subject to most federal, state, and local environmental laws and regulations. Major areas of regulation affecting TVA’s activities include air quality control, water quality control, and management and disposal of solid and hazardous wastes. In the future, regulations in all of these areas are expected to become more stringent. Regulations are also expected to apply to new emissions and sources, with a particular emphasis on climate change, renewable generation, and energy efficiency. | ||
TVA has incurred, and expects to continue to incur, substantial capital and operating and maintenance costs to comply with evolving environmental requirements primarily associated with, but not limited to, the operation of TVA’s coal-fired generating units. It is likely that environmental requirements placed on the operation of TVA’s coal-fired and other generating units will continue to become more restrictive and potentially apply to new emissions and sources. Litigation over emissions or discharges from coal-fired generating units is also occurring, including litigation against TVA. Failure to comply with environmental and safety laws can result in TVA being subject to enforcement actions, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or the shutting down of non-compliant facilities. | ||
TVA estimates that compliance with future Clean Air Act ("CAA") requirements (excluding greenhouse gas ("GHG") requirements) could lead to costs of $1.1 billion from 2014 to 2025. There could be additional material costs if reductions of GHGs, including carbon dioxide, are mandated under the CAA or by legislation or regulation, or if future legislative, regulatory, or judicial actions lead to more stringent emission reduction requirements for conventional pollutants. These costs cannot reasonably be predicted at this time because of the uncertainty of such potential actions. | ||
Liability for releases and cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and other federal and parallel state statutes. In a manner similar to many other industries and power systems, TVA has generated or used hazardous substances over the years. | ||
TVA operations at some TVA facilities have resulted in oil spills and other contamination that TVA is addressing. At June 30, 2014, TVA’s estimated liability for cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was approximately $16 million on a non-discounted basis and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheet. | ||
Legal Proceedings | ||
From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities, as a result of a catastrophic event or otherwise. | ||
General. At June 30, 2014, TVA had accrued approximately $254 million of probable losses with respect to Legal Proceedings and estimated the range of these losses to be from $254 million to $256 million. Of the accrued amount, $139 million is included in Other long-term liabilities, $87 million is included in Accounts payable and accrued liabilities, and $28 million is included in Regulatory assets. TVA is currently unable to estimate any amount or any range of amounts of reasonably possible losses, and no assurance can be given that TVA will not be subject to significant additional claims and liabilities. If actual liabilities significantly exceed the estimates made, TVA's results of operations, liquidity, and financial condition could be materially adversely affected. | ||
Environmental Agreements. In April 2011, TVA entered into two substantively similar agreements, a Federal Facilities Compliance Agreement with the EPA and a consent decree with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups: the Sierra Club, National Parks Conservation Association, and Our Children's Earth Foundation (collectively, the "Environmental Agreements"). They became effective in June 2011. Under the Environmental Agreements, TVA committed to (1) retire on a phased schedule 18 coal-fired units with a combined summer net dependable capability of 2,200 MW, (2) control, convert, or retire additional coal-fired units with a combined summer net dependable capability of 3,500 MW, (3) comply with annual, declining emission caps for sulfur dioxide ("SO2") and nitrogen oxides ("NOx"), (4) invest $290 million in certain TVA environmental projects, (5) provide $60 million to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects, and (6) pay civil penalties of $10 million. In exchange for these commitments, most existing and possible claims against TVA based on alleged New Source Review and associated violations were waived and cannot be brought against TVA. Some possible claims for sulfuric acid mist and GHG emissions can still be brought against TVA, and claims for increases in particulates can also be pursued at many of TVA’s coal-fired units. Additionally, the Environmental Agreements do not address compliance with new laws and regulations or the cost associated with such compliance. | ||
The liabilities related to the Environmental Agreements are included in Accounts payable and accrued liabilities and Other long-term liabilities on the June 30, 2014 Consolidated Balance Sheet. In conjunction with the approval of the Environmental Agreements, the TVA Board determined that it was appropriate to record TVA's liabilities under the Environmental Agreements as regulatory assets, and they are included as such on the June 30, 2014 Consolidated Balance Sheet and will be recovered in rates in future periods. | ||
Several legal and administrative clean air proceedings have already been terminated in connection with the Environmental Agreements. Additionally, the proceeding discussed below involving the John Sevier Fossil Plant ("John Sevier") CAA permit is expected to be narrowed in scope. | ||
Legal Proceedings Related to the Kingston Ash Spill. Seventy-eight lawsuits based on the Kingston ash spill were filed in the United States District Court for the Eastern District of Tennessee. The plaintiffs - residents, businesses, and property owners in the Kingston area - sought unspecified compensatory and punitive damages for various tort claims, court orders to clean up properties, and other relief. Fifteen of these lawsuits were dismissed prior to the third quarter of 2014. On August 4, 2014, the court issued an agreed order that implements a mediated global resolution of pending claims. Under the order, the 63 pending cases were dismissed with prejudice and TVA was directed to pay $28 million to the court, which will disburse the funds. The order anticipates that further legal proceedings will be required to resolve the claims of nine of the plaintiffs, and a portion of the $28 million has been set aside under the order to cover the anticipated costs of resolving these claims. | ||
TVA has received several notices of intent to sue under various environmental statutes from both individuals and environmental groups, but no such suits have been filed. | ||
Civil Penalty and Natural Resource Damages for the Kingston Ash Spill. In June 2010, TDEC issued a civil penalty order of approximately $12 million to TVA for the Kingston ash spill, citing violations of the Tennessee Solid Waste Disposal Act and the Tennessee Water Quality Control Act. Of the $12 million, TVA initially paid $10 million, and agreed to undertake environmental projects valued at $2 million as a credit against the remaining penalty amount. TVA completed several of those projects and has now decided to pay TDEC the remaining difference rather than do more projects. TVA has paid TDEC $750 thousand toward the remaining amount and still must pay another small amount. | ||
Case Involving Tennessee Valley Authority Retirement System. In March 2010, eight current and former participants in and beneficiaries of TVARS filed suit in the United States District Court for the Middle District of Tennessee against the six then-current members of the TVARS Board. The lawsuit challenged the TVARS Board's decision to suspend the TVA contribution requirements for 2010 through 2013, and to amend the TVARS Rules and Regulations to (1) reduce the calculation for COLA benefits for CY 2010 through CY 2013, (2) reduce the interest crediting rate for the fixed fund accounts, and (3) increase the eligibility age to receive COLAs from age 55 to 60. The plaintiffs allege that these actions violated the TVARS Board members' fiduciary duties to the plaintiffs (and the purported class) and the plaintiffs' contractual rights, among other claims. The plaintiffs sought, among other things, unspecified damages, an order directing the TVARS Board to rescind the amendments, and the appointment of a seventh TVARS Board member. Five of the six individual defendants filed motions to dismiss the lawsuit, while the remaining defendant filed an answer to the complaint. In July 2010, TVA moved to intervene in the suit in the event it was not dismissed. In September 2010, the district court dismissed the breach of fiduciary duty claim against the directors without prejudice, allowing the plaintiffs to file an amended complaint within 14 days against TVARS and TVA but not the individual directors. The plaintiffs previously had voluntarily withdrawn their constitutional claims, so the court also dismissed those claims without prejudice. The court dismissed with prejudice the plaintiffs' claims for breach of contract, violation of the Internal Revenue Code, and appointment of a seventh TVARS Board member. | ||
In September 2010, the plaintiffs filed an amended complaint against TVARS and TVA. The plaintiffs allege, among other things, violations of their constitutional rights (due process, equal protection, and property rights), violations of the Administrative Procedure Act, and breach of statutory duties owed to the plaintiffs. They seek a declaratory judgment and appropriate relief for the alleged statutory and constitutional violations and breaches of duty. TVA filed its answer to the amended complaint in December 2010. In May 2012, the court granted the parties' joint motion to administratively close the case subject to reopening to allow the parties the opportunity to engage in mediation. In July 2013, the court granted the plaintiffs' motion to reopen the lawsuit, and in November 2013, TVA filed a motion for summary judgment. The motion is still pending. | ||
Case Involving Paradise Fossil Plant. In July 2014, the Kentucky Coal Association, Inc., and a group of individuals and businesses filed suit against TVA in the United States District Court for the Western District of Kentucky. The plaintiffs allege, among other things, that TVA violated the National Environmental Policy Act ("NEPA") in various ways, including not preparing an Environmental Impact Statement ("EIS") for the retirement of two of the three units at Paradise and the construction of a natural gas power plant, and violated the TVA Act by not choosing the least-cost alternative. The plaintiffs seek, among other things, an injunction barring TVA from taking any action with regard to retiring and replacing the two Paradise units until TVA complies with NEPA. | ||
Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage. In June 2012, the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") vacated the NRC's updated Waste Confidence Decision ("WCD"). The WCD, a key component of NRC licensing activities since 1984, is a generic determination by the NRC that spent nuclear fuel can be safely managed until a permanent off-site repository is established. The most recent update provided that the permanent repository would be available when necessary and that spent fuel could be stored for 60 years after a plant's nuclear license had been terminated. The D.C. Circuit vacated this update on the grounds that, among other things, the NRC failed to support it with an adequate NEPA review and the NRC did not evaluate what would happen if the repository was never built. | ||
In June 2012, multiple intervenor groups submitted a petition to the NRC to (1) hold in abeyance all pending reactor licensing decisions that would depend upon the WCD and (2) establish a process for ensuring that the remanded proceeding complies with the public participation requirements of Section 189a of the Atomic Energy Act. In August 2012, the NRC issued an order (the "August 2012 NRC Order") preventing the issuance of a final licensing decision in all proceedings affected by the petition, including Watts Bar Unit 2 and Bellefonte Units 3 and 4. While resolution of unrelated contentions can proceed, the NRC stated that it will not issue final licensing decisions until it has “appropriately addressed” the D.C. Circuit decision, and all pending contentions concerning the WCD are being held in abeyance pending the NRC's completion of an environmental review and generic rulemaking addressing the shortcomings identified by the D.C. Circuit. A draft final rule and Environmental Impact Statement addressing the D.C. Circuit decision were issued by the NRC staff in July 2014. The NRC is currently scheduled to publish the final rule in early October 2014. | ||
Administrative Proceeding Regarding Renewal of Operating License for Sequoyah Nuclear Plant. In May 2013, the Blue Ridge Environmental Defense League ("BREDL"), the Bellefonte Efficiency and Sustainability Team ("BEST"), and Mothers Against Tennessee River Radiation filed a petition with the NRC opposing the renewal of the operating license for Sequoyah Nuclear Plant Units 1 and 2. The petition contains eight specific contentions challenging the adequacy of the license renewal application that TVA submitted to the NRC in January 2013. TVA filed a response with the Atomic Safety and Licensing Board ("ASLB") opposing the admission of all eight of the petitioners' contentions. In July 2013, the ASLB concluded that BREDL is the only one of the three petitioners that has standing to intervene in this proceeding. The ASLB also held that seven of the contentions were inadmissible, and held one portion of the remaining contention related to the WCD in abeyance pending further direction from the NRC. See Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage. | ||
Administrative Proceedings Regarding Bellefonte Units 3 and 4. TVA submitted its combined construction and operating license application ("CCOLA") for two Advanced Passive 1000 reactors at Bellefonte Units 3 and 4 to the NRC in October 2007. In June 2008, BEST, BREDL, and Southern Alliance for Clean Energy ("SACE") submitted a joint petition for intervention and a request for a hearing. The ASLB denied standing to BEST and admitted four of the 20 contentions submitted by BREDL and SACE. The NRC reversed the ASLB's decision to admit two of the four contentions, leaving only two contentions (concerning the estimated costs of the new nuclear plant and the impact of the facility's operations on aquatic ecology) to be litigated in a future hearing. In January 2012, TVA notified the ASLB that the NRC had placed the CCOLA in "suspended" status indefinitely at TVA's request, and TVA requested that the ASLB hold the proceeding in abeyance pending a decision by TVA regarding the best path forward with regards to the CCOLA. | ||
In July 2012, BREDL petitioned for the admission of another new, late-filed contention stemming from the D.C. Circuit's order vacating the WCD. This contention is being held in abeyance pursuant to the August 2012 NRC Order. See Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage. | ||
Administrative Proceedings Regarding Watts Bar Unit 2. In July 2009, SACE, the Tennessee Environmental Council, the Sierra Club, We the People, and BREDL filed a request for a hearing and petition to intervene in the NRC administrative process reviewing TVA's application for an operating license for Watts Bar Unit 2. In November 2009, the ASLB granted SACE's request for hearing, admitted two of SACE's seven contentions for hearing, and denied the request for hearing submitted on behalf of the other four petitioners. The ASLB subsequently dismissed one contention, leaving one aquatic impact contention. In July 2013, SACE filed a motion to withdraw its aquatic impact contention. The ASLB granted this motion. | ||
In July 2012, SACE petitioned for the admission of another new, late-filed contention, similar to the one filed in the Bellefonte Units 3 and 4 proceeding, stemming from the D.C. Circuit's order vacating the WCD. Similarly, this contention is being held in abeyance pursuant to the August 2012 NRC Order. See Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage. | ||
John Sevier Fossil Plant Clean Air Act Permit. In September 2010, the Environmental Integrity Project, the Southern Environmental Law Center, and the Tennessee Environmental Council filed a petition with the EPA, requesting that the EPA Administrator object to the CAA permit issued to TVA for operation of John Sevier. Among other things, the petitioners allege that repair, maintenance, or replacement activities undertaken at John Sevier Unit 3 in 1986 triggered the Prevention of Significant Deterioration ("PSD") requirements for SO2 and NOx. The CAA permit, issued by TDEC, remains in effect pending the disposition of the petition. The Environmental Agreements should narrow the scope of this proceeding. See Environmental Agreements. TVA has now retired two of the four John Sevier coal-fired units and has idled the remaining two units. | ||
NEPA Challenge at Gallatin Fossil Plant. To comply with the Environmental Agreements and the Mercury and Air Toxics Standards, TVA chose to reduce emissions at the Gallatin Fossil Plant by installing controls and an associated landfill. Pursuant to the NEPA, TVA completed an Environmental Assessment in March 2013 to assess the impact of installing these emission controls. In April 2013, the Tennessee Environmental Council, Tennessee Scenic Rivers Association, Sierra Club, and Center for Biological Diversity filed suit in the United States District Court for the Middle District of Tennessee alleging that TVA violated NEPA when it decided to install additional emission controls and construct an associated landfill at the Gallatin Fossil Plant. Plaintiffs are demanding that TVA prepare an Environmental Impact Statement, and are asking the court to enjoin TVA from taking any further action relating to these matters pending compliance with NEPA. This case was transferred to the United States District Court for the Eastern District of Tennessee, and in August 2014, the court granted TVA's motion for summary judgment and dismissed all of the plaintiffs' claims. | ||
Kingston Fossil Plant NPDES Permit Administrative Appeal. The Sierra Club filed a challenge to the National Pollutant Discharge Elimination System ("NPDES") permit issued by Tennessee for the scrubber-gypsum pond discharge at Kingston in November 2009 before the Tennessee Board of Water Quality, Oil and Gas ("TN Board"). TDEC is the defendant in the challenge, and TVA has intervened in support of TDEC's decision to issue the permit. The matter was set for a hearing before the TN Board in February 2011, but has since been stayed by agreement of the parties. | ||
Bull Run Fossil Plant NPDES Permit Administrative Appeal. SACE and the Tennessee Clean Water Network ("TCWN") filed a challenge to the NPDES permit for the Bull Run Fossil Plant in November 2010. TDEC is the defendant in the challenge, and TVA's motion to intervene to support TDEC's decision to issue the permit was granted in January 2011. At the contested case hearing in October 2013, the TN Board granted TDEC's and TVA's joint motion for involuntary dismissal following the conclusion of the petitioners' presentation of evidence. On December 18, 2013, TCWN and SACE filed a petition for review of the TN Board's decision in the Chancery Court for Davidson, County, Tennessee. | ||
Johnsonville Fossil Plant NPDES Permit Administrative Appeal. SACE and TCWN filed a challenge to the NPDES permit for the Johnsonville Fossil Plant in March 2011. TDEC is the defendant in the challenge. TVA's motion to intervene was granted in August 2011. The matter has not yet been given a hearing date before the TN Board. | ||
John Sevier Fossil Plant NPDES Permit Administrative Appeal. SACE and TCWN filed a challenge to the NPDES permit for John Sevier in May 2011. TDEC is the defendant in the challenge. TVA's motion to intervene was granted in August 2011. The matter has not yet been given a hearing date before the TN Board. | ||
Gallatin Fossil Plant NPDES Permit Administrative Appeal. SACE, TCWN, and the Sierra Club filed a challenge to the NPDES permit for the Gallatin Fossil Plant in June 2012. TDEC is the defendant in the challenge. TVA's motion to intervene was granted in September 2012. Petitioners subsequently voluntarily dismissed all but one of their claims, and TVA has moved to dismiss that claim. The matter has been set for a hearing before the TN Board in September 2014. | ||
Petitions Resulting from Japanese Nuclear Events. As a result of events that occurred at the Fukushima Daiichi Nuclear Power Plant in March 2011, petitions have been filed with the NRC which could impact TVA's nuclear program. While some petitions have been dismissed after review, petitions that remain open include the following: | ||
• | Petition to Immediately Suspend the Operating Licenses of GE BWR Mark I Units Pending the Full NRC Review With Independent Expert and Public Participation From Affected Emergency Planning Zone Communities | |
Beyond Nuclear filed a petition in April 2011, requesting that the NRC take emergency enforcement action against all nuclear reactor licensees that operate units that use the General Electric Mark I BWR design. TVA uses this design at Browns Ferry Units 1, 2, and 3. The petition requests the NRC to take several actions, including the suspension of the operating licenses at the affected nuclear units, including Browns Ferry, until several milestones have been met. In December 2011, the NRC provided its initial response to the petition. The NRC accepted five specific requests that would apply directly or indirectly to Browns Ferry, including issues relating to spent fuel pool use and location, Mark I containment hardened vent systems and design, and backup electrical power. Each of these items was accepted for further investigation, but the requests for immediate action were rejected. The NRC has not yet rendered a decision regarding the petition. | ||
• | Twelve separate petitions on various issues | |
In August 2011, the Natural Resources Defense Council submitted twelve separate letters to the NRC requesting action on various health and safety aspects of operating nuclear facilities in the United States. The NRC is treating these as a single 10 CFR 2.206 Petition. The NRC has not yet rendered a decision regarding the petition. | ||
• | Petition Pursuant to 10 CFR 2.206 - Demand For Information Regarding Compliance with 10 CFR 50, Appendix A, General Design Criterion 44, Cooling Water, and 10 CFR 50.49, Environmental Qualification of Electric Equipment Important to Safety for Nuclear Power Plants | |
A petition was filed by the Union of Concerned Scientists in July 2011, requesting that a demand for information be issued for affected licensees, including TVA with regards to Browns Ferry, describing how the facilities comply with General Design Criterion 44, Cooling Water, within Appendix A to 10 CFR Part 50, and with 10 CFR 50.49, Environmental Qualification of Electric Equipment Important to Safety for Nuclear Power Plants, for all applicable design and licensing bases events. The NRC has not yet rendered a decision regarding the petition. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
General | ' |
General | |
The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States that was created in 1933 by legislation enacted by the United States ("U.S.") Congress in response to a request by President Franklin D. Roosevelt. TVA was created to, among other things, improve navigation on the Tennessee River, reduce the damage from destructive flood waters within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers, further the economic development of TVA's service area in the southeastern United States, and sell the electricity generated at the facilities TVA operates. | |
Today, TVA operates the nation's largest public power system and supplies power in most of Tennessee, northern Alabama, northeastern Mississippi, and southwestern Kentucky and in portions of northern Georgia, western North Carolina, and southwestern Virginia to a population of over nine million people. | |
TVA also manages the Tennessee River, its tributaries, and certain shorelines to provide, among other things, year-round navigation, flood damage reduction, and affordable and reliable electricity. Consistent with these primary purposes, TVA also manages the river system to provide recreational opportunities, adequate water supply, improved water quality, natural resource protection, and economic development. | |
The power program has historically been separate and distinct from the stewardship programs. It is required to be self-supporting from power revenues and proceeds from power financings, such as proceeds from the issuance of bonds, notes, or other evidences of indebtedness ("Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the U.S. Treasury in repayment of and as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment. | |
Power rates are established by the TVA Board of Directors (the "TVA Board") as authorized by the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee (as amended, the “TVA Act”). The TVA Act requires TVA to charge rates for power that will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to states and counties in lieu of taxes ("tax equivalents"); debt service on outstanding indebtedness; payments to the U.S. Treasury in repayment of and as a return on the Power Program Appropriation Investment; and such additional margin as the TVA Board may consider desirable for investment in power system assets, retirement of outstanding Bonds in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA's power business. In setting TVA's rates, the TVA Board is charged by the TVA Act to have due regard for the primary objectives of the TVA Act, including the objective that power shall be sold at rates as low as are feasible. Rates set by the TVA Board are not subject to review or approval by any state or other federal regulatory body. | |
Fiscal Year | ' |
Fiscal Year | |
TVA's fiscal year ends September 30. Years (2014, 2013, etc.) refer to TVA's fiscal years unless they are preceded by “CY,” in which case the references are to calendar years. | |
Cost-Based Regulation | ' |
Cost-Based Regulation | |
Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. In view of demand for electricity and the level of competition, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of future recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. Most regulatory asset write offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable. | |
Basis of Presentation | ' |
Basis of Presentation | |
TVA prepares its consolidated interim financial statements in conformity with GAAP for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2013, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2013 (the “Annual Report”). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included in the interim financial statements. | |
The accompanying consolidated interim financial statements include the accounts of TVA and three variable interest entities ("VIEs"), of which TVA is the primary beneficiary. See Note 8. Intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are deemed critical either when a different estimate could have reasonably been used or where changes in the estimate are reasonably likely to occur from period to period and such use or change would materially impact TVA's financial condition, results of operations, or cash flows. | |
Reclassifications | ' |
Reclassifications | |
Certain reclassifications have been made to the Consolidated Statement of Cash Flows for the nine months ended June 30, 2014 in the Cash flows from operating activities section as $(14) million previously reported as Other, net was reclassified to $(8) million of Regulatory assets costs and $(6) million of Pension contributions. In addition, $5 million previously reported as Environmental cleanup costs — Kingston ash spill, net was reclassified to $5 million of Insurance recoveries. | |
Allowance for Uncollectible Accounts | ' |
Allowance for Uncollectible Accounts | |
The allowance for uncollectible accounts reflects TVA's estimate of probable losses inherent in its accounts and loans receivable balances. TVA determines the allowance based on known accounts, historical experience, and other currently available information including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements after 90 days. It also reflects TVA's corporate credit department's assessment of the financial condition of customers and the credit quality of the receivables. | |
The allowance for uncollectible accounts was $1 million at both June 30, 2014 and September 30, 2013 for accounts receivable. Additionally, loans receivable of $105 million and $73 million at June 30, 2014 and September 30, 2013, respectively, are included in Other long-term assets and reported net of allowances for uncollectible accounts of $10 million. | |
Depreciation [Policy Text Block] | ' |
Depreciation | |
Depreciation expense was $391 million and $341 million for the three months ended June 30, 2014, and 2013, and $1.1 billion and $1.0 billion for the nine months ended June 30, 2014, and 2013, respectively. On November 14, 2013, TVA determined that Paradise Fossil Plant ("Paradise") Units 1 and 2 will be idled on March 31, 2017, and depreciation expense is being accelerated over the remaining useful life. This resulted in additional depreciation expense of $21 million and $34 million during the three and nine months ended June 30, 2014, respectively. It is expected that the decision to idle Paradise Units 1 and 2 on March 31, 2017, will increase depreciation expense by approximately $21 million for the remainder of 2014. | |
Asset Retirement Obligations, Policy [Policy Text Block] | ' |
Asset Retirement Obligations | |
TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to nuclear generating plants, fossil fuel-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site reclamation. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 11 — Asset Retirement Obligations. | |
To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. Prior to June 30, 2014, TVA based its decommissioning cost estimates on cost elements prescribed by the Nuclear Regulatory Commission ("NRC") to dismantle and decommission the radioactive portion of each site with the assumption that decommissioning would occur within the first seven years after plant shut down, which approximates the DECON method of decommissioning. The DECON method requires that radioactive contamination is removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. On June 30, 2014, TVA recorded a change in estimate based on site-specific decommissioning cost studies. Additionally, TVA determined it appropriate to reflect an increase in the probability that certain of its nuclear operating licenses will be extended and that there is a probability that it will be able to delay ultimate decommissioning activities under a SAFSTOR method of decommissioning. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use. As such, TVA ascribed probabilities to both the SAFSTOR and DECON methods of decommissioning in order to estimate its decommissioning obligation. Decommissioning cost studies will be updated for each of TVA’s nuclear units at least every five years. | |
Blended Low-Enriched Uranium Program [Policy Text Block] | ' |
Blended Low-Enriched Uranium Program | |
Under the blended low-enriched uranium ("BLEU") program, TVA, the Department of Energy ("DOE"), and certain nuclear fuel contractors have entered into agreements providing for the DOE's surplus of enriched uranium to be blended with other uranium down to a level that allows the blended uranium to be fabricated into fuel that can be used in nuclear power plants. Under the terms of an interagency agreement between TVA and the DOE, in exchange for supplying highly enriched uranium materials to the appropriate third-party fuel processors for processing into usable BLEU fuel for TVA, the DOE participates to a degree in the savings generated by TVA’s use of this blended nuclear fuel. Over the life of the program, TVA projects that the DOE’s share of savings generated by TVA’s use of this blended nuclear fuel could result in payments to the DOE of as much as $160 million. TVA accrues an obligation with each BLEU reload batch related to the portion of the ultimate future payments estimated to be attributable to the BLEU fuel currently in use. At June 30, 2014, TVA had paid out approximately $101 million for this program, and the obligation recorded was $16 million. |
Variable_Interest_Entities_Pol
Variable Interest Entities (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Text Block [Abstract] | ' |
Variable Interest Entity Policy | ' |
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. The analysis to determine whether an entity is a VIE considers factors such as contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity, the extent of an entity's activities that either involve or are conducted on behalf of an investor with disproportionate voting rights, and the relationship of voting power to the amount of equity invested in an entity. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The determination of the primary beneficiary requires continual reassessment. | |
When TVA determines that it has a variable interest in a variable interest entity, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. | |
Southaven | |
On August 9, 2013, TVA entered into a lease financing arrangement with Southaven Combined Cycle Generation, LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the “SCCG notes”) and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco, LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests of SCCG. A non-controlling interest in SHLLC is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated. | |
The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the “SHLLC notes”) and are subject to mandatory redemption pursuant to scheduled amortizing, semi-annual payments due each August 15 and February 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The sale of the SCCG notes, the membership interests in SCCG, and the SHLLC notes all closed on August 9, 2013. The SCCG notes are secured by TVA’s lease payments, and the SHLLC notes are secured by SHLLC’s investment in, and amounts receivable from, SCCG. TVA’s lease payments to SCCG are payable on the same dates as SCCG’s and SHLLC’s semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG’s semi-annual debt service payments, (ii) the amount of SHLLC’s semi-annual debt service payments, and (iii) the amount of scheduled pre-determined payments to be made to Seven States Southaven, LLC on each lease payment date by SHLLC as agreed in SHLLC’s formation documents. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions. | |
TVA participated in the design, business conduct, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis. | |
John Sevier | |
On January 17, 2012, TVA entered into a $1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF"). JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $900 million secured note issuance (the “JSCCG notes”) and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated. | |
The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the “Holdco notes") and are subject to mandatory redemption pursuant to scheduled amortizing, semi-annual payments due each January 15 and July 15, with a final payment due on January 15, 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes all closed on January 17, 2012. The JSCCG notes are secured by TVA’s lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA’s lease payments to JSCCG are equal to and payable on the same dates as JSCCG’s and Holdco’s semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions. | |
Due to its participation in the design, business conduct, and credit and financial support of JSCCG and Holdco, TVA has determined that it has a variable interest in both of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco’s membership interests in JSCCG are eliminated in consolidation. |
Kingston_Fossil_Plant_Ash_Spil1
Kingston Fossil Plant Ash Spill (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Environmental Remediation Obligations [Abstract] | ' |
Kingston Fossil Plant Ash Spill Policy | ' |
Financial Impact | |
Because of the uncertainty at this time of the final costs to complete the work prescribed by the ash disposal plan, a range of reasonable estimates has been developed by cost category. Known amounts, most likely scenarios, or the low end of the range for each category have been accumulated and evaluated to determine the total estimate. The range of costs varies from approximately $1.1 billion to approximately $1.2 billion. | |
TVA recorded an estimate of $1.1 billion for the cost of cleanup related to this event. In August 2009, TVA began using regulatory accounting treatment to defer all actual costs already incurred and expected future costs related to the ash spill. The cost is being charged to expense as it is collected in rates over 15 years, beginning October 1, 2009. As the estimate changes, additional costs may be deferred and charged to expense prospectively as they are collected in future rates. | |
As work continues to progress and more information is available, TVA will review its estimates and revise them as appropriate. Amounts spent since the event through June 30, 2014, totaled $1.0 billion. The remaining estimated liability at June 30, 2014, was $82 million and is included in Current liabilities. | |
TVA has not included the following categories of costs in the above estimate since it has been determined that these costs are currently either not probable or not reasonably estimable: penalties (other than the penalties set out in a June 2010 TDEC order), regulatory directives, natural resources damages (other than payments required under a memorandum of agreement with TDEC and the U.S. Fish and Wildlife Service establishing a process and a method for resolving the natural resource damages claim), future lawsuits, future claims, long-term environmental impact costs, final long-term disposition of the ash processing area, and costs associated with new laws and regulations. There are certain other costs that will be incurred that have not been included in the estimate as they are appropriately accounted for in other areas of the consolidated financial statements. Associated capital asset purchases are recorded in property, plant, and equipment. Ash handling and disposition costs from current plant operations are recorded in operating expenses. A portion of the dredge cell closure costs are also excluded from the estimate, as they are included in the non-nuclear ARO liability. | |
Asset_Retirement_Obligations_A
Asset Retirement Obligations Asset Retirement Obligations (Policies) | 9 Months Ended |
Jun. 30, 2014 | |
Asset Retirement Obligations [Abstract] | ' |
Asset Retirement Obligations, Policy [Policy Text Block] | ' |
Asset Retirement Obligations | |
TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to nuclear generating plants, fossil fuel-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. These other property-related assets include, but are not limited to, easements and coal rights. Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site reclamation. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 11 — Asset Retirement Obligations. | |
To estimate its decommissioning obligation related to its nuclear generating stations, TVA uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimations and assumptions. Those assumptions include (1) estimates of the cost of decommissioning, (2) the method of decommissioning and the timing of the related cash flows, (3) the license period of the nuclear plant, considering the probability of license extensions, (4) cost escalation factors, and (5) the credit adjusted risk free rate to measure the obligation at the present value of the future estimated costs. Prior to June 30, 2014, TVA based its decommissioning cost estimates on cost elements prescribed by the Nuclear Regulatory Commission ("NRC") to dismantle and decommission the radioactive portion of each site with the assumption that decommissioning would occur within the first seven years after plant shut down, which approximates the DECON method of decommissioning. The DECON method requires that radioactive contamination is removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. On June 30, 2014, TVA recorded a change in estimate based on site-specific decommissioning cost studies. Additionally, TVA determined it appropriate to reflect an increase in the probability that certain of its nuclear operating licenses will be extended and that there is a probability that it will be able to delay ultimate decommissioning activities under a SAFSTOR method of decommissioning. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use. As such, TVA ascribed probabilities to both the SAFSTOR and DECON methods of decommissioning in order to estimate its decommissioning obligation. Decommissioning cost studies will be updated for each of TVA’s nuclear units at least every five years. |
Restructuring_Tables
Restructuring (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | ' | |||||||
The table below summarizes the activity related to severance costs: | ||||||||
Severance Cost Liability Activity | ||||||||
Three Months Ended June 30, 2014 | Nine Months Ended | |||||||
30-Jun-14 | ||||||||
Severance cost liability at beginning of period | $ | 32 | $ | — | ||||
Liabilities incurred during the period | 21 | 56 | ||||||
Actual costs paid during the period | (7 | ) | (10 | ) | ||||
Severance cost liability at end of period | $ | 46 | $ | 46 | ||||
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Accounts Receivable, Net [Abstract] | ' | |||||||
Accounts Receivable, Net | ' | |||||||
The table below summarizes the types and amounts of TVA’s accounts receivable: | ||||||||
Accounts Receivable, Net | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Power receivables | $ | 1,484 | $ | 1,495 | ||||
Other receivables | 67 | 73 | ||||||
Allowance for uncollectible accounts | (1 | ) | (1 | ) | ||||
Accounts receivable, net | $ | 1,550 | $ | 1,567 | ||||
Inventories_Net_Tables
Inventories, Net (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories, Net | ' | |||||||
The table below summarizes the types and amounts of TVA’s inventories: | ||||||||
Inventories, Net | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Materials and supplies inventory | $ | 611 | $ | 620 | ||||
Fuel inventory | 479 | 494 | ||||||
Emission allowance inventory | 13 | 14 | ||||||
Allowance for inventory obsolescence | (40 | ) | (37 | ) | ||||
Inventories, net | $ | 1,063 | $ | 1,091 | ||||
Other_LongTerm_Assets_Tables
Other Long-Term Assets (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Other Long-Term Assets | ' | |||||||
The table below summarizes the types and amounts of TVA’s other long-term assets: | ||||||||
Other Long-Term Assets | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
EnergyRight® receivables | $ | 119 | $ | 117 | ||||
Unamortized debt issue cost of power bonds | 65 | 75 | ||||||
Loans and other long-term receivables, net | 105 | 73 | ||||||
Prepaid capacity payments | 55 | 62 | ||||||
Restricted cash | 56 | — | ||||||
Currency swap asset, net | 15 | 28 | ||||||
Coal contract derivative assets | 2 | 1 | ||||||
Other | 87 | 89 | ||||||
Other long-term assets | $ | 504 | $ | 445 | ||||
Regulatory_Assets_and_Liabilit1
Regulatory Assets and Liabilities (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | ' | |||||||
Regulatory Assets and Liabilities | ' | |||||||
Components of regulatory assets and regulatory liabilities are summarized in the table below: | ||||||||
Regulatory Assets and Liabilities | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Current regulatory assets | ||||||||
Deferred nuclear generating units | $ | 237 | $ | 237 | ||||
Unrealized losses on commodity derivatives | 137 | 183 | ||||||
Environmental agreements | 77 | 73 | ||||||
Environmental cleanup costs - Kingston ash spill | 53 | 68 | ||||||
Fuel cost adjustment receivable | 62 | — | ||||||
Total current regulatory assets | 566 | 561 | ||||||
Non-current regulatory assets | ||||||||
Deferred pension costs and other post-retirement benefits costs | 3,875 | 4,076 | ||||||
Unrealized losses on interest rate derivatives | 898 | 808 | ||||||
Nuclear decommissioning costs | 898 | 893 | ||||||
Environmental cleanup costs - Kingston ash spill | 449 | 681 | ||||||
Non-nuclear decommissioning costs | 577 | 571 | ||||||
Deferred nuclear generating units | 1,308 | 1,438 | ||||||
Environmental agreements | 139 | 189 | ||||||
Unrealized losses on commodity derivatives | 112 | 139 | ||||||
Other non-current regulatory assets | 310 | 336 | ||||||
Total non-current regulatory assets | 8,566 | 9,131 | ||||||
Total regulatory assets | $ | 9,132 | $ | 9,692 | ||||
Current regulatory liabilities | ||||||||
Fuel cost adjustment tax equivalents | $ | 177 | $ | 176 | ||||
Fuel cost adjustment liability | — | 29 | ||||||
Unrealized gains on commodity derivatives | 4 | 7 | ||||||
Total current regulatory liabilities | 181 | 212 | ||||||
Non-current regulatory liabilities | ||||||||
Unrealized gains on commodity derivatives | 2 | 1 | ||||||
Total non-current regulatory liabilities | 2 | 1 | ||||||
Total regulatory liabilities | $ | 183 | $ | 213 | ||||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ' | |||||||
Variable Interest Entities | ' | |||||||
The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of June 30, 2014 and September 30, 2013, as reflected in the Consolidated Balance Sheets are as follows: | ||||||||
Summary of Impact of VIEs on Consolidated Balance Sheets | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Current liabilities of VIE | ||||||||
Accrued interest of VIE | $ | 27 | $ | 12 | ||||
Current portion of membership interests of VIE subject to mandatory redemption | 2 | 2 | ||||||
Current maturities of long-term debt of VIE | 31 | 30 | ||||||
Total current liabilities of VIE | 60 | 44 | ||||||
Other liabilities of VIE | ||||||||
Membership interests of VIE subject to mandatory redemption | 37 | 38 | ||||||
Long-term debt of VIE, net | ||||||||
Long-term debt of VIE | 1,295 | 1,311 | ||||||
Total liabilities of VIE | $ | 1,392 | $ | 1,393 | ||||
Other_LongTerm_Liabilities_Tab
Other Long-Term Liabilities (Tables) | 9 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Other Liabilities, Noncurrent [Abstract] | ' | |||||||
Other Long-Term Liabilities | ' | |||||||
The table below summarizes the types and amounts of Other long-term liabilities: | ||||||||
Other Long-Term Liabilities | ||||||||
At June 30, 2014 | At September 30, 2013 | |||||||
Interest rate swap liabilities | $ | 1,289 | $ | 1,199 | ||||
Environmental agreements liability | 139 | 190 | ||||||
EnergyRight® purchase obligation | 150 | 149 | ||||||
Coal contract derivative liabilities | 53 | 35 | ||||||
Membership interests of VIE subject to mandatory redemption | 37 | 38 | ||||||
Commodity swap derivative liabilities | 18 | 36 | ||||||
Currency swap liabilities | 2 | 15 | ||||||
Other | 223 | 199 | ||||||
Total other long-term liabilities | $ | 1,911 | $ | 1,861 | ||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 9 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ' | |||||||||||||
Asset Retirement Obligations | ' | |||||||||||||
Asset Retirement Obligation Activity | ||||||||||||||
Nuclear | Non-Nuclear | Total | ||||||||||||
Balance at September 30, 2013 | $ | 2,399 | $ | 1,089 | $ | 3,488 | ||||||||
Settlements (ash storage areas) | — | (10 | ) | (10 | ) | |||||||||
Change in estimate as a result of nuclear site-specific studies | (471 | ) | — | (471 | ) | |||||||||
Change in estimate (ash storage areas) | — | (10 | ) | (10 | ) | |||||||||
Accretion (recorded as regulatory asset) | 100 | 39 | 139 | |||||||||||
Balance at June 30, 2014 | $ | 2,028 | $ | 1,108 | $ | 3,136 | (1 | ) | ||||||
Note | ||||||||||||||
(1) The current portion of ARO in the amount of $69 million is included in Accounts payable and accrued liabilities at June 30, 2014. |
Debt_and_Other_Obligations_Tab
Debt and Other Obligations (Tables) | 9 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Debt and Other Obligations [Abstract] | ' | ||||||||||||||
Debt Outstanding | ' | ||||||||||||||
Total debt outstanding at June 30, 2014, and September 30, 2013, consisted of the following: | |||||||||||||||
Debt Outstanding | |||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||
Short-term debt | |||||||||||||||
Short-term debt, net | $ | 1,759 | $ | 2,432 | |||||||||||
Current maturities of long-term debt of variable interest entities | 31 | 30 | |||||||||||||
Current maturities of power bonds | 1,032 | 32 | |||||||||||||
Total current debt outstanding, net | 2,822 | 2,494 | |||||||||||||
Long-term debt | |||||||||||||||
Long-term debt of variable interest entities | 1,295 | 1,311 | |||||||||||||
Long-term power bonds(1) | 21,092 | 22,400 | |||||||||||||
Unamortized discounts, premiums, and other | (80 | ) | (85 | ) | |||||||||||
Total long-term debt, net | 22,307 | 23,626 | |||||||||||||
Total outstanding debt | $ | 25,129 | $ | 26,120 | |||||||||||
Note | |||||||||||||||
(1) Includes net exchange losses from currency transactions of $98 million at June 30, 2014 and $43 million at September 30, 2013. | |||||||||||||||
Debt Securities Activity | ' | ||||||||||||||
The table below summarizes the long-term debt securities activity for the period from October 1, 2013, to June 30, 2014. | |||||||||||||||
Debt Securities Activity | |||||||||||||||
Date | Amount | Interest Rate | |||||||||||||
Redemptions/Maturities(1) | |||||||||||||||
electronotes® | First Quarter 2014 | $ | 4 | 3.56 | % | ||||||||||
electronotes® | Second Quarter 2014 | 326 | 4.52 | % | |||||||||||
electronotes® | Third Quarter 2014 | 3 | 3.14 | % | |||||||||||
2009 Series A | Nov-13 | 2 | 2.25 | % | |||||||||||
2009 Series B | Dec-13 | 1 | 3.77 | % | |||||||||||
2009 Series A | May-14 | 2 | 2.25 | % | |||||||||||
2009 Series B | Jun-14 | 25 | 3.77 | % | |||||||||||
Total redemptions/maturities of power bonds | 363 | ||||||||||||||
Variable interest entities | Second Quarter 2014 | 15 | 4.3 | % | |||||||||||
Total redemptions/maturities of debt | $ | 378 | |||||||||||||
Note | |||||||||||||||
(1) All redemptions were at 100 percent of par. |
Risk_Management_Activities_and1
Risk Management Activities and Derivative Transactions (Tables) | 9 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | ' | ||||||||||||||||||||||
The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive: | |||||||||||||||||||||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) | |||||||||||||||||||||||
Amount of Mark-to-Market Gain (Loss) Recognized in OCI | |||||||||||||||||||||||
Three Months Ended June 30 | Nine Months Ended June 30 | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Objective of Hedge Transaction | Accounting for Derivative | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Hedging Instrument | |||||||||||||||||||||||
Currency swaps | To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk) | Unrealized gains and losses are recorded in AOCI and reclassified to interest expense to the extent they are offset by gains and losses on the hedged transaction | $ | 1 | $ | 9 | $ | 23 | $ | (7 | ) | ||||||||||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) | |||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | |||||||||||||||||||||||
Three Months Ended June 30 | Nine Months Ended June 30 | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Currency swaps | $ | 26 | $ | 1 | $ | 55 | $ | (57 | ) | ||||||||||||||
Note | |||||||||||||||||||||||
There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt. | |||||||||||||||||||||||
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment | ' | ||||||||||||||||||||||
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income on Derivatives | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
June 30(1) | June 30(1) | ||||||||||||||||||||||
Derivative Type | Objective of Derivative | Accounting for Derivative Instrument | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Interest rate swaps | To fix short-term debt variable rate to a fixed rate (interest rate risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities until settlement, at which time the gains/losses are recognized in gain/loss on derivative contracts. | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Commodity contract derivatives | To protect against fluctuations in market prices of purchased coal or natural gas (price risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses due to contract settlements are recognized in fuel expense as incurred. | — | (2 | ) | — | (2 | ) | |||||||||||||||
Commodity derivatives | To protect against fluctuations in market prices of purchased commodities (price risk) | Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production. | (6 | ) | — | (21 | ) | (29 | ) | (99 | ) | ||||||||||||
under financial trading program ("FTP") | |||||||||||||||||||||||
Note | |||||||||||||||||||||||
(1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income | |||||||||||||||||||||||
but instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months and nine months ended June 30, 2014 and 2013. | |||||||||||||||||||||||
Mark-to-Market Value of TVA Derivatives | ' | ||||||||||||||||||||||
Mark-to-Market Values of TVA Derivatives | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Derivatives that Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Balance | Balance Sheet Presentation | Balance | Balance Sheet Presentation | ||||||||||||||||||||
Currency swaps | |||||||||||||||||||||||
£200 million Sterling | $ | (2 | ) | Other long-term liabilities | $ | (15 | ) | Other long-term liabilities | |||||||||||||||
£250 million Sterling | 64 | Other long-term assets | 51 | Other long-term assets | |||||||||||||||||||
£150 million Sterling | 7 | Other long-term assets | 10 | Other long-term assets | |||||||||||||||||||
Derivatives that Do Not Receive Hedge Accounting Treatment | |||||||||||||||||||||||
Balance | Balance Sheet Presentation | Balance | Balance Sheet Presentation | ||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||
$1.0 billion notional | (946 | ) | Other long-term liabilities | (886 | ) | Other long-term liabilities | |||||||||||||||||
$476 million notional | (331 | ) | Other long-term liabilities | (300 | ) | Other long-term liabilities | |||||||||||||||||
$42 million notional | (12 | ) | Other long-term liabilities | (13 | ) | Other long-term liabilities | |||||||||||||||||
Commodity contract derivatives | (150 | ) | Other long-term assets $2; Other current assets $3; Other long-term liabilities $(54); Accounts payable and accrued liabilities $(101) | (141 | ) | Other long-term assets $1; Other current assets $2; Other long-term liabilities $(35); Accounts payable and accrued liabilities $(109) | |||||||||||||||||
Derivatives under FTP(1) | (90 | ) | Other current assets $(56); Other long-term liabilities $(18); Accounts payable and accrued liabilities $(16) | (166 | ) | Other current assets $(97); Other long-term liabilities $(36); Accounts payable and accrued liabilities $(33) | |||||||||||||||||
Note | |||||||||||||||||||||||
(1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $57 million and $100 million at June 30, 2014 and September 30, 2013, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. | |||||||||||||||||||||||
Currency Swaps Outstanding | ' | ||||||||||||||||||||||
TVA had the following currency swaps outstanding as of June 30, 2014: | |||||||||||||||||||||||
Currency Swaps Outstanding | |||||||||||||||||||||||
At June 30, 2014 | |||||||||||||||||||||||
Effective Date of Currency Swap Contract | Associated TVA Bond Issues Currency Exposure | Expiration Date of Swap | Overall Effective | ||||||||||||||||||||
Cost to TVA | |||||||||||||||||||||||
1999 | £200 million | 2021 | 5.81% | ||||||||||||||||||||
2001 | £250 million | 2032 | 6.59% | ||||||||||||||||||||
2003 | £150 million | 2043 | 4.96% | ||||||||||||||||||||
Commodity Contract Derivatives | ' | ||||||||||||||||||||||
Commodity Contract Derivatives | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Number of Contracts | Notional Amount | Fair Value (MtM) | Number of Contracts | Notional Amount | Fair Value (MtM) | ||||||||||||||||||
Coal contract derivatives | 34 | 47 million tons | $ | (146 | ) | 19 | 43 million tons | $ | (140 | ) | |||||||||||||
Natural gas contract derivatives | 33 | 63 million mmBtu | $ | (4 | ) | 13 | 39 million mmBtu | $ | (1 | ) | |||||||||||||
Derivatives Under Financial Trading Program | ' | ||||||||||||||||||||||
Derivatives Under Financial Trading Program | |||||||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||||||
Notional Amount | Fair Value (MtM) | Notional Amount | Fair Value (MtM) | ||||||||||||||||||||
(in millions) | (in millions) | ||||||||||||||||||||||
Natural gas (in mmBtu) | |||||||||||||||||||||||
Futures contracts | — | $ | — | — | $ | — | |||||||||||||||||
Swap contracts | 117,575,000 | (91 | ) | 152,922,500 | (169 | ) | |||||||||||||||||
Option contracts | — | — | — | — | |||||||||||||||||||
Natural gas financial positions | 117,575,000 | $ | (91 | ) | 152,922,500 | $ | (169 | ) | |||||||||||||||
Fuel oil/crude oil (in barrels) | |||||||||||||||||||||||
Futures contracts | — | $ | — | — | $ | — | |||||||||||||||||
Swap contracts | — | 1 | 1,205,000 | 3 | |||||||||||||||||||
Option contracts | — | — | — | — | |||||||||||||||||||
Fuel oil/crude oil financial positions | — | $ | 1 | 1,205,000 | $ | 3 | |||||||||||||||||
Note | |||||||||||||||||||||||
Fair value amounts presented are based on net commodity position with the futures commission merchant or other counterparty. Notional amounts disclosed represent the net absolute value of contractual amounts. | |||||||||||||||||||||||
FTP Unrealized Gains (Losses) | ' | ||||||||||||||||||||||
Unrealized gains and losses related to the FTP at June 30, 2014 and September 30, 2013 were as follows: | |||||||||||||||||||||||
Financial Trading Program Unrealized Gains (Losses) | |||||||||||||||||||||||
FTP unrealized gains (losses) deferred as regulatory liabilities (assets) | At June 30, 2014 | At September 30, 2013 | |||||||||||||||||||||
Natural gas | $ | (91 | ) | $ | (169 | ) | |||||||||||||||||
Fuel oil/crude oil | 1 | 3 | |||||||||||||||||||||
FTP Realized Gains (Losses) | ' | ||||||||||||||||||||||
Realized gains and losses related to the FTP for the three and nine months ended June 30, 2014 and 2013 were as follows: | |||||||||||||||||||||||
Financial Trading Program Realized Gains (Losses) | |||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||||||
Decrease (increase) in fuel expense | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Natural gas | $ | (5 | ) | $ | (13 | ) | $ | (23 | ) | $ | (60 | ) | |||||||||||
Fuel oil/crude oil | — | — | 2 | 2 | |||||||||||||||||||
Coal | — | — | — | (1 | ) | ||||||||||||||||||
Financial Trading Program Realized Gains (Losses) | |||||||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||||||
Decrease (increase) in purchased power expense | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Natural gas | $ | (1 | ) | $ | (8 | ) | $ | (9 | ) | $ | (40 | ) | |||||||||||
Offsetting Assets and Liabilities [Table Text Block] | ' | ||||||||||||||||||||||
The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets as of June 30, 2014, and September 30, 2013, are shown in the table below. | |||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||
Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Balance Sheet (1) | Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Currency swaps | $ | 71 | $ | (56 | ) | $ | 15 | ||||||||||||||||
Commodity derivatives under FTP | 56 | (55 | ) | 1 | |||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | 127 | (111 | ) | 16 | |||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | 5 | — | 5 | ||||||||||||||||||||
Total | $ | 132 | $ | (111 | ) | $ | 21 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||
Currency swap (3) | $ | (2 | ) | $ | — | $ | (2 | ) | |||||||||||||||
Interest rate swaps (3) | (1,289 | ) | — | (1,289 | ) | ||||||||||||||||||
Commodity derivatives under FTP | (146 | ) | 112 | (34 | ) | ||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | (1,437 | ) | 112 | (1,325 | ) | ||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | (155 | ) | — | (155 | ) | ||||||||||||||||||
Total | $ | (1,592 | ) | $ | 112 | $ | (1,480 | ) | |||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||||
Gross Amounts of Recognized Assets/Liabilities | Gross Amounts Offset in the Balance Sheet (1) | Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Currency swaps | $ | 61 | $ | (33 | ) | $ | 28 | ||||||||||||||||
Commodity derivatives under FTP | 101 | (98 | ) | 3 | |||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | 162 | (131 | ) | 31 | |||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | 3 | — | 3 | ||||||||||||||||||||
Total | $ | 165 | $ | (131 | ) | $ | 34 | ||||||||||||||||
Liabilities | |||||||||||||||||||||||
Currency swap (3) | $ | (15 | ) | $ | — | $ | (15 | ) | |||||||||||||||
Interest rate swaps (3) | (1,199 | ) | — | (1,199 | ) | ||||||||||||||||||
Commodity derivatives under FTP | (267 | ) | 198 | (69 | ) | ||||||||||||||||||
Total derivatives subject to master netting or similar arrangement | (1,481 | ) | 198 | (1,283 | ) | ||||||||||||||||||
Total derivatives not subject to master netting or similar arrangement | (144 | ) | — | (144 | ) | ||||||||||||||||||
Total | $ | (1,625 | ) | $ | 198 | $ | (1,427 | ) | |||||||||||||||
Notes | |||||||||||||||||||||||
(1) Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions. | |||||||||||||||||||||||
(2) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the balance sheets. | |||||||||||||||||||||||
(3) Letters of credit of approximately $900 million and $800 million were posted as collateral at June 30, 2014 and September 30, 2013, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||
Valuation Techniques | ' | ||||||||||||||||||
The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows: | |||||||||||||||||||
Level 1 | — | Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing. | |||||||||||||||||
Level 2 | — | Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means. | |||||||||||||||||
Level 3 | — | Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. | |||||||||||||||||
Unrealized Investments Gains (Losses) | ' | ||||||||||||||||||
TVA recorded unrealized gains and losses related to its trading securities held as of the end of each period as follows: | |||||||||||||||||||
Unrealized Investment Gains (Losses) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||
Financial Statement Presentation | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
SERP | Other income (expense) | $ | 1 | $ | (1 | ) | $ | 2 | $ | — | |||||||||
NDT | Regulatory asset | 36 | (42 | ) | 72 | 16 | |||||||||||||
ART | Regulatory asset | 9 | (6 | ) | 27 | 16 | |||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
At June 30, 2014 | |||||||||||||||||||
Assets | Quoted Prices in Active | Significant Other | Significant | Total | |||||||||||||||
Markets for | Observable Inputs | Unobservable | |||||||||||||||||
Identical Assets | (Level 2) | Inputs | |||||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||||
Investments | |||||||||||||||||||
Equity securities | $ | 177 | $ | — | $ | — | $ | 177 | |||||||||||
Debt securities | |||||||||||||||||||
U.S. government corporations and | 58 | 42 | — | 100 | |||||||||||||||
agencies | |||||||||||||||||||
Corporate debt securities | — | 313 | — | 313 | |||||||||||||||
Residential mortgage-backed securities | — | 13 | — | 13 | |||||||||||||||
Commercial mortgage-backed securities | — | 7 | — | 7 | |||||||||||||||
Collateralized debt obligations | — | 26 | — | 26 | |||||||||||||||
Private partnerships | — | — | 188 | 188 | |||||||||||||||
Commingled funds(2) | |||||||||||||||||||
Equity security commingled funds | — | 931 | — | 931 | |||||||||||||||
Debt security commingled funds | — | 147 | — | 147 | |||||||||||||||
Total investments | 235 | 1,479 | 188 | 1,902 | |||||||||||||||
Currency swaps | — | 15 | — | 15 | |||||||||||||||
Commodity contract derivatives | — | — | 5 | 5 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 1 | — | 1 | |||||||||||||||
Total | $ | 235 | $ | 1,495 | $ | 193 | $ | 1,923 | |||||||||||
Liabilities | Quoted Prices in Active Markets for Identical Liabilities | Significant Other | Significant | Total | |||||||||||||||
(Level 1) | Observable Inputs | Unobservable | |||||||||||||||||
(Level 2) | Inputs | ||||||||||||||||||
(Level 3) | |||||||||||||||||||
Currency swaps | $ | — | $ | 2 | $ | — | 2 | ||||||||||||
Interest rate swaps | — | 1,289 | — | 1,289 | |||||||||||||||
Commodity contract derivatives | — | 4 | 151 | 155 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 34 | — | 34 | |||||||||||||||
Total | $ | — | $ | 1,329 | $ | 151 | $ | 1,480 | |||||||||||
Notes | |||||||||||||||||||
(1) Due to the right of setoff and method of settlement, TVA elects to record commodity derivatives under the FTP based on its net commodity position with the counterparty or FCM. Deposits are made to TVA's margin cash accounts held with each FCM to offset any net liability positions in full for derivatives that are transacted with FCMs. TVA records currency swaps net of cash collateral received from or paid to the counterparty. See Note 14 — Offsetting of Derivative Assets and Liabilities. | |||||||||||||||||||
(2) Commingled funds represent investment funds comprising multiple individual financial instruments and are classified in the table based on their existing investment portfolio as of the measurement date. Commingled funds primarily composed of one class of security are classified in that category. | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
At September 30, 2013 | |||||||||||||||||||
Assets | Quoted Prices in Active | Significant Other | Significant | Total | |||||||||||||||
Markets for | Observable Inputs | Unobservable | |||||||||||||||||
Identical Assets | (Level 2)(1) | Inputs | |||||||||||||||||
(Level 1) | (Level 3) | ||||||||||||||||||
Investments | |||||||||||||||||||
Equity securities | $ | 151 | $ | — | $ | — | $ | 151 | |||||||||||
Debt securities | |||||||||||||||||||
U.S. government corporations and | 38 | 67 | — | 105 | |||||||||||||||
agencies | |||||||||||||||||||
Corporate debt securities | — | 255 | — | 255 | |||||||||||||||
Residential mortgage-backed securities | — | 25 | — | 25 | |||||||||||||||
Commercial mortgage-backed securities | — | 7 | — | 7 | |||||||||||||||
Collateralized debt obligations | — | 10 | — | 10 | |||||||||||||||
Private partnerships | — | — | 159 | 159 | |||||||||||||||
Commingled funds(2) | |||||||||||||||||||
Equity security commingled funds | — | 741 | — | 741 | |||||||||||||||
Debt security commingled funds | — | 248 | — | 248 | |||||||||||||||
Total investments | 189 | 1,353 | 159 | 1,701 | |||||||||||||||
Currency swaps | — | 28 | — | 28 | |||||||||||||||
Commodity contract derivatives | — | — | 3 | 3 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 3 | — | 3 | |||||||||||||||
Total | $ | 189 | $ | 1,384 | $ | 162 | $ | 1,735 | |||||||||||
Liabilities | Quoted Prices in Active Markets for Identical Liabilities | Significant Other | Significant | Total | |||||||||||||||
(Level 1) | Observable Inputs | Unobservable | |||||||||||||||||
(Level 2) | Inputs | ||||||||||||||||||
(Level 3) | |||||||||||||||||||
Currency swaps | $ | — | $ | 15 | $ | — | 15 | ||||||||||||
Interest rate swaps | — | 1,199 | — | 1,199 | |||||||||||||||
Commodity contract derivatives | — | 1 | 143 | 144 | |||||||||||||||
Commodity derivatives under FTP | |||||||||||||||||||
Swap contracts | — | 69 | — | 69 | |||||||||||||||
Total | $ | — | $ | 1,284 | $ | 143 | $ | 1,427 | |||||||||||
Notes | |||||||||||||||||||
(1) Due to the right of setoff and method of settlement, TVA elects to record commodity derivatives under the FTP based on its net commodity position with the counterparty or FCM. Deposits are made to TVA's margin cash accounts held with each FCM to offset any net liability positions in full for derivatives that are transacted with FCMs. TVA records currency swaps net of cash collateral received from or paid to the counterparty. See Note 14 — Offsetting of Derivative Assets and Liabilities. | |||||||||||||||||||
(2) Commingled funds represent investment funds comprising multiple individual financial instruments and are classified in the table based on their existing investment portfolio as of the measurement date. Commingled funds primarily composed of one class of security are classified in that category. | |||||||||||||||||||
The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2014, and September 30, 2013. | |||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ' | ||||||||||||||||||
The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): | |||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||||
Private | Commodity Contract Derivatives | Private | Commodity Contract Derivatives | ||||||||||||||||
Partnerships | Partnerships | ||||||||||||||||||
Balance at beginning of period | $ | 137 | $ | (148 | ) | $ | 53 | $ | (267 | ) | |||||||||
Purchases | 9 | — | 93 | — | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||
Sales | (1 | ) | — | (3 | ) | — | |||||||||||||
Settlements | — | — | — | — | |||||||||||||||
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 5 | 39 | 7 | 158 | |||||||||||||||
Balance at June 30, 2013 | $ | 150 | $ | (109 | ) | $ | 150 | $ | (109 | ) | |||||||||
Balance at beginning of period | $ | 180 | $ | (131 | ) | $ | 159 | $ | (140 | ) | |||||||||
Purchases | 7 | — | 23 | — | |||||||||||||||
Issuances | — | — | — | — | |||||||||||||||
Sales | (6 | ) | — | (7 | ) | — | |||||||||||||
Settlements | — | — | — | — | |||||||||||||||
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 7 | (15 | ) | 13 | (6 | ) | |||||||||||||
Balance at June 30, 2014 | $ | 188 | $ | (146 | ) | $ | 188 | $ | (146 | ) | |||||||||
Quantitative Information about Level 3 Fair Value Measurements | ' | ||||||||||||||||||
The following table presents quantitative information related to the significant unobservable inputs used in the measurement of fair value of TVA's assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||
Fair Value at | Valuation Technique(s) | Unobservable Inputs | Range | ||||||||||||||||
30-Jun-14 | |||||||||||||||||||
Assets | |||||||||||||||||||
Commodity contract derivatives | $ | 5 | Discounted cash flow | Credit risk | 26 | % | * | ||||||||||||
Pricing model | Coal supply and demand | 0.9 - 1.1 billion tons/year | |||||||||||||||||
Long-term market prices | $12.00 - $67.07/ton | ||||||||||||||||||
Liabilities | |||||||||||||||||||
Commodity contract derivatives | $ | 151 | Pricing model | Coal supply and demand | 0.9 - 1.1 billion tons/year | ||||||||||||||
Long-term market prices | $12.00 - $67.07/ton | ||||||||||||||||||
* Applies to only one contract. | |||||||||||||||||||
Estimated Values of Financial Instruments Not Recorded at Fair Value | ' | ||||||||||||||||||
The estimated fair values of TVA's financial instruments not recorded at fair value at June 30, 2014, and September 30, 2013, were as follows: | |||||||||||||||||||
Estimated Values of Financial Instruments Not Recorded at Fair Value | |||||||||||||||||||
At June 30, 2014 | At September 30, 2013 | ||||||||||||||||||
Valuation Classification | Carrying | Fair | Carrying | Fair | |||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||||
EnergyRight® receivables (including current portion) | Level 2 | $ | 152 | $ | 152 | $ | 150 | $ | 150 | ||||||||||
Loans and other long-term receivables, net | Level 2 | $ | 105 | $ | 96 | $ | 73 | $ | 67 | ||||||||||
EnergyRight® purchase obligation (including current portion) | Level 2 | $ | 187 | $ | 204 | $ | 186 | $ | 210 | ||||||||||
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | Level 2 | $ | 39 | $ | 50 | $ | 40 | $ | 50 | ||||||||||
Long-term outstanding power bonds (including current maturities), net | Level 2 | $ | 22,044 | $ | 25,603 | $ | 22,347 | $ | 24,603 | ||||||||||
Long-term debt of variable interest entities (including current maturities) | Level 2 | $ | 1,326 | $ | 1,441 | $ | 1,341 | $ | 1,386 | ||||||||||
Other_Income_Expense_Net_Table
Other Income (Expense), Net (Tables) | 9 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||||||
Other Income (Expense), Net | ' | ||||||||||||||||
Income and expenses not related to TVA’s operating activities are summarized in the following table: | |||||||||||||||||
Other Income (Expense), Net | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
30-Jun | 30-Jun | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
External services | $ | 3 | $ | 6 | $ | 15 | $ | 17 | |||||||||
Interest income | 6 | 5 | 17 | 17 | |||||||||||||
Gains (losses) on investments | 2 | — | 4 | 2 | |||||||||||||
Miscellaneous | (1 | ) | (1 | ) | 1 | — | |||||||||||
Total other income (expense), net | $ | 10 | $ | 10 | $ | 37 | $ | 36 | |||||||||
Benefit_Plans_Tables
Benefit Plans (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Benefit Plans | ' | ||||||||||||||||||||||||||||||||
The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and nine months ended June 30, 2014, and 2013, were as follows: | |||||||||||||||||||||||||||||||||
Components of TVA’s Benefit Plans | |||||||||||||||||||||||||||||||||
For the Three Months Ended June 30 | For the Nine Months Ended June 30 | ||||||||||||||||||||||||||||||||
Pension Benefits | Other Post-Retirement Benefits | Pension Benefits | Other Post-Retirement Benefits | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Service cost | $ | 33 | $ | 38 | $ | 5 | $ | 6 | $ | 98 | $ | 115 | $ | 14 | $ | 18 | |||||||||||||||||
Interest cost | 139 | 117 | 8 | 8 | 418 | 351 | 24 | 23 | |||||||||||||||||||||||||
Expected return on plan assets | (109 | ) | (107 | ) | — | — | (326 | ) | (321 | ) | — | — | |||||||||||||||||||||
Amortization of prior service cost | (5 | ) | (6 | ) | (2 | ) | (2 | ) | (16 | ) | (17 | ) | (5 | ) | (5 | ) | |||||||||||||||||
Recognized net actuarial loss | 71 | 95 | 3 | 6 | 214 | 283 | 8 | 19 | |||||||||||||||||||||||||
Total net periodic benefit cost recognized | $ | 129 | $ | 137 | $ | 14 | $ | 18 | $ | 388 | $ | 411 | $ | 41 | $ | 55 | |||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies General and Basis of Presentation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 |
variable_interest_entities | variable_interest_entities | Other Noncurrent Assets [Member] | Other Noncurrent Assets [Member] | Scenario, Forecast [Member] | ||||
People | People | |||||||
General and Basis of Presentation | ' | ' | ' | ' | ' | ' | ' | ' |
Population of TVA's service area | 9,000,000 | ' | 9,000,000 | ' | ' | ' | ' | ' |
Number of variable interest entities | 3 | ' | 3 | ' | ' | ' | ' | ' |
Period of time for customers to fulfill payment arrangements | ' | ' | '90 days | ' | ' | ' | ' | ' |
Allowance for uncollectible accounts, accounts receivable | $1 | ' | $1 | ' | $1 | ' | ' | ' |
Loans and other long-term receivables, net | 96 | ' | 96 | ' | 67 | 105 | 73 | ' |
Loans and other long-term receivables, allowance | 10 | ' | 10 | ' | 10 | ' | ' | ' |
Depreciation expense | 391 | 341 | 1,100 | 1,000 | ' | ' | ' | ' |
Accelerated depreciation | 21 | ' | 34 | ' | ' | ' | ' | 21 |
Total possible amount of payments | 160 | ' | 160 | ' | ' | ' | ' | ' |
Payments attributable to BLEU fuel program | 101 | ' | 101 | ' | ' | ' | ' | ' |
BLEU fuel obligation | $16 | ' | $16 | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Reclassificatons (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2013 |
Accounting Policies [Abstract] | ' |
Reclassification from Other, net to Regulatory assets costs and Pension contributions | ($14) |
Reclassification to Regulatory Assets from Other, net | -8 |
Reclassification to Pension contributions from Other, net | -6 |
Reclassification from Environmental cleanup costs-Kingston ash spill to Insurance recoveries | 5 |
Reclassification to Insurance recoveries from Environmental cleanup costs-Kingston ash spill | $5 |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 |
Restructuring and Related Activities [Abstract] | ' | ' | ' | ' |
Expected increase (decrease) in operation and maintenance expense | ' | $500 | ' | ' |
Severance cost liability | 46 | 46 | 32 | 0 |
Liabilities incurred during the period | 21 | 56 | ' | ' |
Actual costs paid during the period | ($7) | ($10) | ' | ' |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Accounts Receivable, Net | ' | ' |
Power receivables | $1,484 | $1,495 |
Other receivables | 67 | 73 |
Allowance for uncollectible accounts | -1 | -1 |
Accounts receivable, net | $1,550 | $1,567 |
Inventories_Net_Details
Inventories, Net (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Inventories, Net | ' | ' |
Materials and supplies inventory | $611 | $620 |
Fuel inventory | 479 | 494 |
Emission allowance inventory | 13 | 14 |
Allowance for inventory obsolescence | -40 | -37 |
Inventories, net | $1,063 | $1,091 |
Other_LongTerm_Assets_Details
Other Long-Term Assets (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Energy Right Program | Other Noncurrent Assets [Member] | Other Noncurrent Assets [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | ||
Other Long-Term Assets | ' | ' | ' | ' | ' | ' | ' |
EnergyRight receivables | ' | ' | ' | $119 | $117 | $33 | $33 |
Unamortized debt issue cost of power bonds | ' | ' | ' | 65 | 75 | ' | ' |
Loans and other long-term receivables, net | 96 | 67 | ' | 105 | 73 | ' | ' |
Prepaid capacity payments | ' | ' | ' | 55 | 62 | ' | ' |
Restricted cash | ' | ' | ' | 56 | 0 | ' | ' |
Currency swap asset, net | 15 | 28 | ' | 15 | 28 | ' | ' |
Coal contract derivative assets | ' | ' | ' | 2 | 1 | ' | ' |
Other | ' | ' | ' | 87 | 89 | ' | ' |
Total other long-term assets | $504 | $445 | ' | ' | ' | ' | ' |
Number of days in default | ' | ' | '180 days | ' | ' | ' | ' |
Regulatory_Assets_and_Liabilit2
Regulatory Assets and Liabilities (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | $566 | $561 |
Non-current regulatory assets | 8,566 | 9,131 |
Regulatory assets | 9,132 | 9,692 |
Current regulatory liabilities | 181 | 212 |
Non-current regulatory liabilities | 2 | 1 |
Regulatory liabilities | 183 | 213 |
Fuel cost adjustment tax equivalents | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory liabilities | 177 | 176 |
Fuel cost adjustment receivable/liability | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory liabilities | 0 | 29 |
Unrealized gains/losses on commodity derivatives | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory liabilities | 4 | 7 |
Non-current regulatory liabilities | 2 | 1 |
Deferred nuclear generating units | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | 237 | 237 |
Non-current regulatory assets | 1,308 | 1,438 |
Unrealized gains/losses on commodity derivatives | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | 137 | 183 |
Non-current regulatory assets | 112 | 139 |
Environmental agreements | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | 77 | 73 |
Non-current regulatory assets | 139 | 189 |
Environmental cleanup costs - Kingston ash spill | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | 53 | 68 |
Non-current regulatory assets | 449 | 681 |
Fuel cost adjustment receivable/liability | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Current regulatory assets | 62 | 0 |
Deferred pension costs and other post-retirement benefits costs | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Non-current regulatory assets | 3,875 | 4,076 |
Unrealized losses on interest rate derivatives | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Non-current regulatory assets | 898 | 808 |
Nuclear decommissioning costs | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Non-current regulatory assets | 898 | 893 |
Non-nuclear decommissioning costs | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Non-current regulatory assets | 577 | 571 |
Other non-current regulatory assets | ' | ' |
Regulatory Assets and Liabilities | ' | ' |
Non-current regulatory assets | $310 | $336 |
Variable_Interest_Entities_Var
Variable Interest Entities Variable Interest Entities (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Aug. 09, 2013 | Jan. 17, 2012 |
In Millions, unless otherwise specified | ||||
VIE Financing | ' | ' | ' | ' |
Membership interests of VIE subject to mandatory redemption | $50 | $50 | $40 | ' |
Total liabilities of VIE | 1,392 | 1,393 | ' | 1,000 |
SCCG | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Face amount | ' | ' | 360 | ' |
JSCCG | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Face amount | ' | ' | ' | 900 |
Holdco | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Face amount | ' | ' | ' | 100 |
Accrued interest of VIE | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | 27 | 12 | ' | ' |
Current portion of membership interests of VIE subject to mandatory redemption | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | 2 | 2 | ' | ' |
Current maturities of long-term debt of VIE | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | 31 | 30 | ' | ' |
Total current liabilities of VIE | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | 60 | 44 | ' | ' |
Membership interests of VIE subject to mandatory redemption | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | 37 | 38 | ' | ' |
Long-term debt of VIE | ' | ' | ' | ' |
VIE Financing | ' | ' | ' | ' |
Total liabilities of VIE | $1,295 | $1,311 | ' | ' |
Kingston_Fossil_Plant_Ash_Spil2
Kingston Fossil Plant Ash Spill (Details) (USD $) | 3 Months Ended | 9 Months Ended | 27 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2008 | |
Dredge_cells | ||||
Cubic_yards | ||||
Kingston Fossil Plant Ash Spill | ' | ' | ' | ' |
Number of dredge cells that failed | ' | ' | ' | 1 |
Cubic yards of water and coal fly ash that flowed out of the cell | ' | ' | ' | 5,000,000 |
Kingston cost estimate low end of range | $1,100,000,000 | $1,100,000,000 | $1,100,000,000 | ' |
Kingston cost estimate high end of range | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | ' |
Total recorded estimate of Kingston cleanup costs | 1,100,000,000 | 1,100,000,000 | 1,100,000,000 | ' |
Period collected in rates | ' | '15 years | ' | ' |
Kingston cleanup amounts spent to date | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ' |
Remaining estimated Kingston liability | 82,000,000 | 82,000,000 | 82,000,000 | ' |
Kingston insurance recoveries | $14,000,000 | $175,000,000 | $267,000,000 | ' |
Other_LongTerm_Liabilities_Det
Other Long-Term Liabilities (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Other Long-Term Liabilities | ' | ' |
Interest rate swap liabilities | $1,289 | $1,199 |
Currency swap liabilities | 2 | 15 |
Total other long-term liabilities | 1,911 | 1,861 |
Other Noncurrent Liabilities [Member] | ' | ' |
Other Long-Term Liabilities | ' | ' |
Interest rate swap liabilities | 1,289 | 1,199 |
Environmental agreements liability | 139 | 190 |
EnergyRightB. purchase obligation | 150 | 149 |
Coal contract derivative liabilities | 53 | 35 |
Membership interests of VIE subject to mandatory redemption | 37 | 38 |
Commodity swap derivative liabilities | 18 | 36 |
Currency swap liabilities | 2 | 15 |
Other | 223 | 199 |
Accounts Payable and Accrued Liabilities [Member] | ' | ' |
Other Long-Term Liabilities | ' | ' |
EnergyRightB. purchase obligation | $37 | $37 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | |
Asset Retirement Obligations | ' | |
Asset retirement obligations, period increase (decrease) | $352 | |
Initial decommissioning estimate for nuclear | '7 years | |
Decommissioning study update - ARO nuclear | '5 years | |
Accretion expense | 30 | |
Balance at September 30, 2013 | 3,488 | [1] |
Settlements (ash storage areas) | -10 | [1] |
Change in estimate as a result of adoption of nuclear site-specific studies | -471 | [1] |
Change in estimate (ash storage areas) | -10 | [1] |
Accretion (recorded as regulatory asset) | 139 | [1] |
Balance at June 30, 2014 | 3,136 | [1] |
Current portion of ARO | 69 | |
Nuclear | ' | |
Asset Retirement Obligations | ' | |
Balance at September 30, 2013 | 2,399 | [1] |
Settlements (ash storage areas) | 0 | [1] |
Change in estimate as a result of adoption of nuclear site-specific studies | -471 | [1] |
Change in estimate (ash storage areas) | 0 | |
Accretion (recorded as regulatory asset) | 100 | [1] |
Balance at June 30, 2014 | 2,028 | [1] |
Non-nuclear | ' | |
Asset Retirement Obligations | ' | |
Balance at September 30, 2013 | 1,089 | [1] |
Settlements (ash storage areas) | -10 | [1] |
Change in estimate as a result of adoption of nuclear site-specific studies | 0 | [1] |
Change in estimate (ash storage areas) | -10 | [1] |
Accretion (recorded as regulatory asset) | 39 | [1] |
Balance at June 30, 2014 | $1,108 | [1] |
[1] | The current portion of ARO in the amount of $69 million is included in Accounts payable and accrued liabilities at JuneB 30, 2014. |
Debt_and_Other_Obligations_Deb
Debt and Other Obligations Debt Outstanding (Details) (USD $) | 9 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2003 | ||
Units | |||||
Debt Instrument | ' | ' | ' | ||
Foreign Currency Transaction Gain (Loss), before Tax | $98 | $43 | ' | ||
Proceeds prior to 2004 | ' | ' | 945 | ||
Leaseback transaction, number of units | ' | ' | 24 | ||
Proceeds in 2003 | ' | ' | 389 | ||
CT and QTE outstanding leaseback obligation | 692 | 761 | ' | ||
Short-term debt | ' | ' | ' | ||
Short-term debt, net | 1,759 | 2,432 | ' | ||
Current maturities of long-term debt of variable interest entities | 31 | 30 | ' | ||
Current maturities of power bonds | 1,032 | 32 | ' | ||
Total current debt outstanding, net | 2,822 | 2,494 | ' | ||
Long-term debt | ' | ' | ' | ||
Long-term debt of variable interest entities | 1,295 | 1,311 | ' | ||
Long-term power bonds | 21,092 | [1] | 22,400 | [1] | ' |
Unamortized discounts, premiums and other | -80 | -85 | ' | ||
Total long-term debt, net | 22,307 | 23,626 | ' | ||
Total outstanding debt | $25,129 | $26,120 | ' | ||
[1] | Includes net exchange losses from currency transactions of $98 million at JuneB 30, 2014 and $43 million at SeptemberB 30, 2013. |
Debt_and_Other_Obligations_Deb1
Debt and Other Obligations Debt Securities Activity (Details) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | 31-May-14 | Nov. 30, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | ||||||||
2009 Series A [Member] | 2009 Series A [Member] | electronotes | electronotes | electronotes | Total | 2009 Series B [Member] | 2009 Series B [Member] | |||||||||||
Debt Instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Redemptions/maturities of power bonds | $363 | $1,417 | $2 | [1] | $2 | [1] | $3 | [1] | $326 | [1] | $4 | [1] | ' | $25 | [1] | $1 | [1] | |
Interest rate of power bonds | ' | ' | 2.25% | [1] | 2.25% | [1] | 3.14% | [1] | 4.52% | [1] | 3.56% | [1] | ' | 3.77% | [1] | 3.77% | [1] | |
Percent of par value | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ||||||||
Variable interest entities | 15 | [1] | 6 | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Interest rate of variable interest entities | 4.30% | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total redemptions/maturities of debt | $378 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
[1] | All redemptions were at 100 percent of par. |
Debt_and_Other_Obligations_Cre
Debt and Other Obligations Credit Facility Agreements (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 |
Line of Credit | ' | ' |
Credit Facility Agreements | ' | ' |
Current borrowing capacity | $150,000,000 | ' |
Amount of letters of credit outstanding | 900,000,000 | 800,000,000 |
Credit facility agreements borrowings outstanding | 0 | ' |
Revolving Credit Facilities | ' | ' |
Credit Facility Agreements | ' | ' |
Current borrowing capacity | 2,500,000,000 | ' |
Number of revolving credit facilities | 3 | ' |
Revolving Credit Facility 1 | 1,000,000,000 | ' |
Revolving Credit Facility 2 | 1,000,000,000 | ' |
Revolving Credit Facility 3 | 500,000,000 | ' |
Credit facility agreements borrowings outstanding | $0 | $0 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Equity [Abstract] | ' | ' | ' | ' | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | $26 | [1] | $1 | [1] | $55 | [1] | ($57) | [1] |
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt. |
Risk_Management_Activities_and2
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | ' | ' | ' | ' | ||||
Net unrealized gain (loss) on cash flow hedges | $1,000,000 | $9,000,000 | $23,000,000 | ($7,000,000) | ||||
Reclassification to earnings from cash flow hedges | -26,000,000 | [1] | -1,000,000 | [1] | -55,000,000 | [1] | 57,000,000 | [1] |
Ineffective portion excluded from testing | 0 | 0 | 0 | 0 | ||||
Reclassification to earnings from cash flow hedges in the future | ' | ' | $30,000,000 | ' | ||||
Reclassification to earnings from cash flow hedges estimated time to transfer | ' | ' | '12 months | ' | ||||
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to exchange gain on the debt. |
Risk_Management_Activities_and3
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 | ||||||
Derivative | ' | ' | ' | ' | ' | |||||
Change in Unrealized gains (losses) on Interest Rate Derivatives | ($65,000,000) | $252,000,000 | ($90,000,000) | $465,000,000 | ' | |||||
Amount of gain (loss) recognized in income on derivatives | 0 | ' | 0 | ' | ' | |||||
Unrealized gain (loss) on derivatives | 0 | 0 | 0 | 0 | ' | |||||
Interest Rate Swap | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Amount of gain (loss) recognized in income on derivatives | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' | |
Commodity Contract Derivatives | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Amount of gain (loss) recognized in income on derivatives | 0 | [1] | -2,000,000 | [1] | 0 | [1] | -2,000,000 | [1] | ' | |
Fair value | -150,000,000 | ' | -150,000,000 | ' | -141,000,000 | |||||
Commodity derivatives under the financial trading program | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Amount of gain (loss) recognized in income on derivatives | -6,000,000 | [1] | -21,000,000 | [1] | -29,000,000 | [1] | -99,000,000 | [1] | ' | |
Fair value | -90,000,000 | [2] | ' | -90,000,000 | [2] | ' | -166,000,000 | [2] | ||
Coal Contract Derivatives | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Number of contracts | 34 | ' | 34 | ' | 19 | |||||
Notional amount | 47,000,000 | ' | 47,000,000 | ' | 43,000,000 | |||||
Fair value | -146,000,000 | ' | -146,000,000 | ' | -140,000,000 | |||||
Natural gas contract derivatives | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Number of contracts | 33 | ' | 33 | ' | 13 | |||||
Notional amount | 63,000,000 | ' | 63,000,000 | ' | 39,000,000 | |||||
Fair value | ($4,000,000) | ' | ($4,000,000) | ' | ($1,000,000) | |||||
Maximum | Coal Contract Derivatives | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Derivative, Term of Contract | ' | ' | '4 years | ' | ' | |||||
Maximum | Natural gas contract derivatives | ' | ' | ' | ' | ' | |||||
Derivative | ' | ' | ' | ' | ' | |||||
Derivative, Term of Contract | ' | ' | '2 years | ' | ' | |||||
[1] | All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in incomebut instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months and nine months ended JuneB 30, 2014 and 2013. | |||||||||
[2] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $57 million and $100 million at JuneB 30, 2014 and SeptemberB 30, 2013, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. |
Risk_Management_Activities_and4
Risk Management Activities and Derivative Transactions Mark-to-Market Values of TVA Derivatives (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Derivatives, Fair Value | ' | ' | ||
Gross amounts of recognized liabilities | $1,437 | $1,481 | ||
200 million Sterling currency swap | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -2 | -15 | ||
250 million Sterling currency swap | Other long-term assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | 64 | 51 | ||
150 million Sterling currency swap | Other long-term assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | 7 | 10 | ||
$1.0 billion notional interest rate swap | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -946 | -886 | ||
$476 million notional interest rate swap | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -331 | -300 | ||
$42 million notional interest rate swap | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -12 | -13 | ||
Commodity contract derivatives | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -150 | -141 | ||
Commodity contract derivatives | Other long-term assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | 2 | 1 | ||
Commodity contract derivatives | Other current assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | 3 | 2 | ||
Commodity contract derivatives | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -54 | -35 | ||
Commodity contract derivatives | Accounts Payable and Accrued Liabilities [Member] | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -101 | -109 | ||
Commodity derivatives under FTP | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -90 | [1] | -166 | [1] |
Commodity derivatives under FTP | Other current assets | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Gross amounts of recognized liabilities | 57 | 100 | ||
Fair value | -56 | -97 | ||
Commodity derivatives under FTP | Other long-term liabilities | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | -18 | -36 | ||
Commodity derivatives under FTP | Accounts Payable and Accrued Liabilities [Member] | ' | ' | ||
Derivatives, Fair Value | ' | ' | ||
Fair value | ($16) | ($33) | ||
[1] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $57 million and $100 million at JuneB 30, 2014 and SeptemberB 30, 2013, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. |
Risk_Management_Activities_and5
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) (GBP £) | 9 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
1999 Currency Swap Contract | ' |
Derivative | ' |
Effective Date of Currency Swap Contract | '1999 |
Associated TVA bond issues currency exposure | £ 200 |
Expiration Date of Swap | '2021 |
Overall effective cost to TVA | 5.81% |
2001 Currency Swap Contract | ' |
Derivative | ' |
Effective Date of Currency Swap Contract | '2001 |
Associated TVA bond issues currency exposure | 250 |
Expiration Date of Swap | '2032 |
Overall effective cost to TVA | 6.59% |
2003 Currency Swap Contract | ' |
Derivative | ' |
Effective Date of Currency Swap Contract | '2003 |
Associated TVA bond issues currency exposure | £ 150 |
Expiration Date of Swap | '2043 |
Overall effective cost to TVA | 4.96% |
Risk_Management_Activities_and6
Risk Management Activities and Derivative Transactions Derivatives Under FTP (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Swap contracts | Coal Contract Derivatives | Coal Contract Derivatives | |
Derivative | ' | ' | ' | ' |
FTP transaction limit | $130 | ' | ' | ' |
Maximum hedge volume | 75.00% | ' | ' | ' |
Market value limitation of outstanding construction materials hedging transactions | 100 | ' | ' | ' |
Portfolio value at risk limit for foreign currency transactions | 5 | ' | ' | ' |
Fair value | ' | ' | $0 | $0 |
Remaining terms | ' | '4 years | ' | ' |
Risk_Management_Activities_and7
Risk Management Activities and Derivative Transactions Derivatives Under Financial Trading Program (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2013 |
Natural Gas Futures | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 0 |
Fair value | $0 | ' | $0 | ' | $0 |
Fuel Oil and Crude Oil Futures | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 0 |
Fair value | 0 | ' | 0 | ' | 0 |
Natural Gas Swap | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 117,575,000 | ' | 117,575,000 | ' | 152,922,500 |
Fair value | -91 | ' | -91 | ' | -169 |
Fuel Oil and Crude Oil Swap | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 1,205,000 |
Fair value | 1 | ' | 1 | ' | 3 |
Natural Gas Option | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 0 |
Fair value | 0 | ' | 0 | ' | 0 |
Fuel Oil and Crude Oil Option | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 0 |
Fair value | 0 | ' | 0 | ' | 0 |
Natural Gas Total Contracts | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 117,575,000 | ' | 117,575,000 | ' | 152,922,500 |
Fair value | -91 | ' | -91 | ' | -169 |
Decrease (increase) in fuel expense | -5 | -13 | -23 | -60 | ' |
Decrease (increase) in purchased power expense | -1 | -8 | -9 | -40 | ' |
Fuel Oil and Crude Oil Total Contracts | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Notional amount | 0 | ' | 0 | ' | 1,205,000 |
Fair value | 1 | ' | 1 | ' | 3 |
Decrease (increase) in fuel expense | 0 | 0 | 2 | 2 | ' |
Coal Contract Total Contracts | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Fair value | 0 | ' | 0 | ' | 0 |
Decrease (increase) in fuel expense | 0 | 0 | 0 | -1 | ' |
Closed derivative contracts | ' | ' | ' | ' | ' |
Derivative | ' | ' | ' | ' | ' |
Fair value | ($3) | ' | ($3) | ' | ($8) |
Risk_Management_Activities_and8
Risk Management Activities and Derivative Transactions Collateral (Details) (Collateral, USD $) | 9 Months Ended |
Jun. 30, 2014 | |
Collateral | ' |
Derivative | ' |
Derivative, net liability position, aggregate fair value | $1,300,000,000 |
Collateral obligations | 900,000,000 |
Collateral already posted | 900,000,000 |
Likely cash collateral obligation increase | $22,000,000 |
Risk_Management_Activities_and9
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) | Jun. 30, 2014 | Sep. 30, 2013 |
Customers | Customers | |
Derivative | ' | ' |
Number of active future commission merchants | 2 | ' |
Credit of Customers [Member] | ' | ' |
Derivative | ' | ' |
Number of customers that represent the percent of outstanding accounts receivable | 3 | 3 |
Percent of total outstanding accounts receivables | 27.00% | 27.00% |
Power Purchase Agreement | ' | ' |
Derivative | ' | ' |
Megawatts | 440 | ' |
Recovered_Sheet1
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets and Liabilities (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Offsetting Assets [Line Items] | ' | ' | ||
Gross Amounts of Recognized Assets | $127 | $162 | ||
Gross Amounts Offset in the Balance Sheet | -111 | [1] | -131 | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 21 | [2] | 34 | [2] |
Total derivatives not subject to master netting or similar arrangement | 5 | [2] | 3 | [2] |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 132 | 165 | ||
Offsetting Liabilities [Line Items] | ' | ' | ||
Gross amounts of recognized liabilities | -1,437 | -1,481 | ||
Gross Amounts Offset in the Balance Sheet | 112 | [1] | 198 | [1] |
Net Amounts of Liabilities Presented in the Balance Sheet | -1,480 | [2] | -1,427 | [2] |
Total derivatives not subject to master netting or similar arrangement | -155 | [2] | -144 | [2] |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 1,592 | 1,625 | ||
Letter of Credit | ' | ' | ||
Offsetting Liabilities [Line Items] | ' | ' | ||
Amount of letters of credit outstanding | 900 | 800 | ||
Currency Swap [Member] | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross Amounts of Recognized Assets | 71 | 61 | ||
Gross Amounts Offset in the Balance Sheet | -56 | [1] | -33 | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 15 | [2] | 28 | [2] |
Offsetting Liabilities [Line Items] | ' | ' | ||
Gross amounts of recognized liabilities | -2 | [3] | -15 | [3] |
Gross Amounts Offset in the Balance Sheet | 0 | [1],[3] | 0 | [1],[3] |
Net Amounts of Liabilities Presented in the Balance Sheet | -2 | [2],[3] | -15 | [2],[3] |
Interest Rate Contract [Member] | ' | ' | ||
Offsetting Liabilities [Line Items] | ' | ' | ||
Gross amounts of recognized liabilities | -1,289 | [3] | -1,199 | [3] |
Gross Amounts Offset in the Balance Sheet | 0 | [1],[3] | 0 | [1],[3] |
Net Amounts of Liabilities Presented in the Balance Sheet | -1,289 | [2],[3] | -1,199 | [2],[3] |
Commodity derivatives under FTP | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross Amounts of Recognized Assets | 56 | 101 | ||
Gross Amounts Offset in the Balance Sheet | -55 | [1] | -98 | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 1 | [2] | 3 | [2] |
Offsetting Liabilities [Line Items] | ' | ' | ||
Gross amounts of recognized liabilities | -146 | -267 | ||
Gross Amounts Offset in the Balance Sheet | 112 | [1] | 198 | [1] |
Net Amounts of Liabilities Presented in the Balance Sheet | -34 | [2] | -69 | [2] |
Total derivatives subject to master netting or similar arrangement [Member] | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Net Amounts of Assets Presented in the Balance Sheet | 16 | [2] | 31 | [2] |
Offsetting Liabilities [Line Items] | ' | ' | ||
Net Amounts of Liabilities Presented in the Balance Sheet | ($1,325) | [2] | ($1,283) | [2] |
[1] | Amounts primarily include counterparty netting of derivative contracts, margin account deposits for futures commission merchants transactions, and cash collateral received or paid in accordance with the accounting guidance for derivatives and hedging transactions. | |||
[2] | There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the balance sheets. | |||
[3] | Letters of credit of approximately $900 million and $800 million were posted as collateral at JuneB 30, 2014 and SeptemberB 30, 2013, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Fair_Value_Measurements_Invest
Fair Value Measurements Investments Gains (Losses) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Investment Gains (Losses) | ' | ' | ' | ' |
Securities classified as trading and measured at fair value | $1,900,000,000 | ' | $1,900,000,000 | ' |
Equity investments not required to be measured at fair value | 1,000,000 | ' | 1,000,000 | ' |
NDT unfunded commitments related to private partnerships | 128,000,000 | ' | 128,000,000 | ' |
SERP | ' | ' | ' | ' |
Investment Gains (Losses) | ' | ' | ' | ' |
Unrealized gains (losses) on investments | 1,000,000 | -1,000,000 | 2,000,000 | 0 |
NDT | ' | ' | ' | ' |
Investment Gains (Losses) | ' | ' | ' | ' |
Unrealized gains (losses) on investments | 36,000,000 | -42,000,000 | 72,000,000 | 16,000,000 |
ART | ' | ' | ' | ' |
Investment Gains (Losses) | ' | ' | ' | ' |
Unrealized gains (losses) on investments | $9,000,000 | ($6,000,000) | $27,000,000 | $16,000,000 |
Fair_Value_Measurements_Nonper
Fair Value Measurements Nonperformance Risk (Details) (USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
Nonperformance Risk | ' |
Derivative credit valuation adjustment, assets | $3 |
Derivative credit valuation adjustment, liabilities | $1 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements Fair Value Measurements (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Investments | ' | ' | ||
Equity securities | $177 | $151 | ||
U.S. government corporations and agencies | 100 | 105 | ||
Corporate debt securities | 313 | 255 | ||
Residential mortgage-backed securities | 13 | 25 | ||
Commercial mortgage-backed securities | 7 | 7 | ||
Collateralized debt obligations | 26 | 10 | ||
Private partnerships | 188 | 159 | ||
Equity security commingled funds | 931 | [1] | 741 | [1] |
Debt security commingled funds | 147 | [1] | 248 | [1] |
Total investments | 1,902 | 1,701 | ||
Currency swaps | 15 | 28 | ||
Commodity contract derivatives | 5 | 3 | ||
Swap contracts | 1 | 3 | ||
Total | 1,923 | 1,735 | ||
Currency swaps | 2 | 15 | ||
Interest rate swaps | 1,289 | 1,199 | ||
Commodity contract derivatives | 155 | 144 | ||
Swap contracts | 34 | 69 | ||
Total | 1,480 | 1,427 | ||
Fair Value, Inputs, Level 1 | ' | ' | ||
Investments | ' | ' | ||
Equity securities | 177 | 151 | ||
U.S. government corporations and agencies | 58 | 38 | ||
Corporate debt securities | 0 | 0 | ||
Residential mortgage-backed securities | 0 | 0 | ||
Commercial mortgage-backed securities | 0 | 0 | ||
Collateralized debt obligations | 0 | 0 | ||
Private partnerships | 0 | 0 | ||
Equity security commingled funds | 0 | [1] | 0 | [1] |
Debt security commingled funds | 0 | [1] | 0 | [1] |
Total investments | 235 | 189 | ||
Currency swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 0 | 0 | ||
Total | 235 | 189 | ||
Currency swaps | 0 | 0 | ||
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 0 | 0 | ||
Total | 0 | 0 | ||
Fair Value, Inputs, Level 2 | ' | ' | ||
Investments | ' | ' | ||
Equity securities | 0 | 0 | ||
U.S. government corporations and agencies | 42 | 67 | ||
Corporate debt securities | 313 | 255 | ||
Residential mortgage-backed securities | 13 | 25 | ||
Commercial mortgage-backed securities | 7 | 7 | ||
Collateralized debt obligations | 26 | 10 | ||
Private partnerships | 0 | 0 | ||
Equity security commingled funds | 931 | [1] | 741 | [1] |
Debt security commingled funds | 147 | [1] | 248 | [1] |
Total investments | 1,479 | 1,353 | ||
Currency swaps | 15 | [2] | 28 | [2] |
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 1 | [2] | 3 | [2] |
Total | 1,495 | 1,384 | ||
Currency swaps | 2 | 15 | ||
Interest rate swaps | 1,289 | 1,199 | ||
Commodity contract derivatives | 4 | 1 | ||
Swap contracts | 34 | [2] | 69 | [2] |
Total | 1,329 | 1,284 | ||
Fair Value, Inputs, Level 3 | ' | ' | ||
Investments | ' | ' | ||
Equity securities | 0 | 0 | ||
U.S. government corporations and agencies | 0 | 0 | ||
Corporate debt securities | 0 | 0 | ||
Residential mortgage-backed securities | 0 | 0 | ||
Commercial mortgage-backed securities | 0 | 0 | ||
Collateralized debt obligations | 0 | 0 | ||
Private partnerships | 188 | 159 | ||
Equity security commingled funds | 0 | [1] | 0 | [1] |
Debt security commingled funds | 0 | [1] | 0 | [1] |
Total investments | 188 | 159 | ||
Currency swaps | 0 | 0 | ||
Commodity contract derivatives | 5 | 3 | ||
Swap contracts | 0 | 0 | ||
Total | 193 | 162 | ||
Currency swaps | 0 | 0 | ||
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 151 | 143 | ||
Swap contracts | 0 | 0 | ||
Total | $151 | $143 | ||
[1] | Commingled funds represent investment funds comprising multiple individual financial instruments and are classified in the table based on their existing investment portfolio as of the measurement date. Commingled funds primarily composed of one class of security are classified in that category. | |||
[2] | Due to the right of setoff and method of settlement, TVA elects to record commodity derivatives under the FTP based on its net commodity position with the counterparty or FCM. Deposits are made to TVA's margin cash accounts held with each FCM to offset any net liability positions in full for derivatives that are transacted with FCMs. TVA records currency swaps net of cash collateral received from or paid to the counterparty. See Note 14 b Offsetting of Derivative Assets and Liabilities. |
Fair_Value_Measurements_Fair_V1
Fair Value Measurements Fair Value Measurements Using Significant Unobservable Inputs (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | ||
ASSETS | ' | ' | ' | ' | ' | ' | ' | ' | |
Commodity contract derivatives | $5,000,000 | ' | $5,000,000 | ' | ' | $3,000,000 | ' | ' | |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | |
Commodity contract derivatives | 155,000,000 | ' | 155,000,000 | ' | ' | 144,000,000 | ' | ' | |
Number of contracts | 1 | ' | 1 | ' | ' | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | |
Amount of gain (loss) recognized in income | 0 | ' | 0 | ' | ' | ' | ' | ' | |
Partnership Interest | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | |
Balance | 188,000,000 | 150,000,000 | 188,000,000 | 150,000,000 | 180,000,000 | 159,000,000 | 137,000,000 | 53,000,000 | |
Purchases | 7,000,000 | 9,000,000 | 23,000,000 | 93,000,000 | ' | ' | ' | ' | |
Issuances | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Sales | -6,000,000 | -1,000,000 | 7,000,000 | 3,000,000 | ' | ' | ' | ' | |
Settlements | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 7,000,000 | 5,000,000 | -13,000,000 | -7,000,000 | ' | ' | ' | ' | |
Commodity Contract Derivatives | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | |
Balance | -146,000,000 | -109,000,000 | -146,000,000 | -109,000,000 | -131,000,000 | -140,000,000 | -148,000,000 | -267,000,000 | |
Purchases | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Issuances | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Sales | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Settlements | 0 | 0 | 0 | 0 | ' | ' | ' | ' | |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | 15,000,000 | 39,000,000 | 6,000,000 | -158,000,000 | ' | ' | ' | ' | |
Maximum | ' | ' | ' | ' | ' | ' | ' | ' | |
ASSETS | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value inputs, counterparty credit risk | ' | ' | 26.00% | [1] | ' | ' | ' | ' | ' |
Fair value measurements tons per year | 1,100,000,000 | ' | 1,100,000,000 | ' | ' | ' | ' | ' | |
Price per ton | 67.07 | ' | 67.07 | ' | ' | ' | ' | ' | |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value measurements tons per year | 1,100,000,000 | ' | 1,100,000,000 | ' | ' | ' | ' | ' | |
Price per ton | 67.07 | ' | 67.07 | ' | ' | ' | ' | ' | |
Minimum | ' | ' | ' | ' | ' | ' | ' | ' | |
ASSETS | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value inputs, counterparty credit risk | ' | ' | 26.00% | [1] | ' | ' | ' | ' | ' |
Fair value measurements tons per year | 900,000,000 | ' | 900,000,000 | ' | ' | ' | ' | ' | |
Price per ton | 12 | ' | 12 | ' | ' | ' | ' | ' | |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | |
Fair value measurements tons per year | 900,000,000 | ' | 900,000,000 | ' | ' | ' | ' | ' | |
Price per ton | 12 | ' | 12 | ' | ' | ' | ' | ' | |
Fair Value, Inputs, Level 3 | ' | ' | ' | ' | ' | ' | ' | ' | |
ASSETS | ' | ' | ' | ' | ' | ' | ' | ' | |
Commodity contract derivatives | 5,000,000 | ' | 5,000,000 | ' | ' | 3,000,000 | ' | ' | |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | |
Commodity contract derivatives | $151,000,000 | ' | $151,000,000 | ' | ' | $143,000,000 | ' | ' | |
[1] | Applies to only one contract. |
Fair_Value_Measurements_Estima
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2013 | Aug. 09, 2013 |
In Millions, unless otherwise specified | |||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ' | ' | ' |
EnergyRight receivables | $152 | $150 | ' |
Notes, Loans and Financing Receivable, Net, Noncurrent | 96 | 67 | ' |
EnergyRight purchase obligaiton | 204 | 210 | ' |
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | 50 | 50 | 40 |
Long-term power bonds (including current maturities), net | 25,603 | 24,603 | ' |
Long-term debt of variable interest entities (including current maturities), net | 1,441 | 1,386 | ' |
Carrying Value | ' | ' | ' |
Estimated Values of Financial Intruments Not Recorded at Fair Value | ' | ' | ' |
EnergyRight receivables | 152 | 150 | ' |
Notes, Loans and Financing Receivable, Net, Noncurrent | 105 | 73 | ' |
EnergyRight purchase obligaiton | 187 | 186 | ' |
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | 39 | 40 | ' |
Long-term power bonds (including current maturities), net | 22,044 | 22,347 | ' |
Long-term debt of variable interest entities (including current maturities), net | $1,326 | $1,341 | ' |
Other_Income_Expense_Net_Detai
Other Income (Expense), Net (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Other Income (Expense), Net | ' | ' | ' | ' |
External services | $3 | $6 | $15 | $17 |
Interest income | 6 | 5 | 17 | 17 |
Gains (losses) on investments | 2 | 0 | 4 | 2 |
Miscellaneous | -1 | -1 | 1 | 0 |
Total other income (expense), net | $10 | $10 | $37 | $36 |
Benefit_Plans_Components_of_Be
Benefit Plans Components of Benefit Plans (Details) (USD $) | 0 Months Ended | 9 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
plans | ||
Defined Benefit Plan Disclosure | ' | ' |
Number of defined benefit plans | ' | 1 |
Number of defined contribution plans | ' | 1 |
Number of unfunded post-retirement health care plans | ' | 2 |
Defined Contribution Plan, Automatic Employer Contribution | 4.50% | ' |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | $0.75 | ' |
Maximum | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.50% | ' |
Benefit_Plans_Components_of_Ne
Benefit Plans Components of Net Periodic Benefit Cost (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Pension Benefits | ' | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' | ' |
Service cost | $33 | $38 | $98 | $115 |
Interest cost | 139 | 117 | 418 | 351 |
Expected return on plan assets | -109 | -107 | -326 | -321 |
Amortization of prior service cost | -5 | -6 | -16 | -17 |
Recognized net actuarial loss | 71 | 95 | 214 | 283 |
Total net periodic benefit cost recognized | 129 | 137 | 388 | 411 |
Other Post-retirement Benefits | ' | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' | ' |
Service cost | 5 | 6 | 14 | 18 |
Interest cost | 8 | 8 | 24 | 23 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | -2 | -2 | -5 | -5 |
Recognized net actuarial loss | 3 | 6 | 8 | 19 |
Total net periodic benefit cost recognized | $14 | $18 | $41 | $55 |
Benefit_Plans_Contributions_De
Benefit Plans Contributions (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Sep. 30, 2009 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 |
Other Pension Plans, Defined Benefit | Other Pension Plans, Defined Benefit | Other Post-retirement Benefits | Other Post-retirement Benefits | Supplemental Employee Retirement Plan, Defined Benefit [Member] | Supplemental Employee Retirement Plan, Defined Benefit [Member] | Scenario, Forecast [Member] | Scenario, Forecast [Member] | |
Other Pension Plans, Defined Benefit | Other Pension Plans, Defined Benefit | |||||||
Defined Benefit Plan Disclosure | ' | ' | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Contributions by Employer | $126 | $1,000 | $23 | $34 | $6 | $6 | $124 | $250 |
Contingencies_and_Legal_Procee
Contingencies and Legal Proceedings Contingencies (Details) (USD $) | 9 Months Ended |
Jun. 30, 2014 | |
reactors | |
Insurance_layers | |
Sites | |
Units | |
Loss Contingencies [Line Items] | ' |
Nuclear liability insurance | $375,000,000 |
Number of sites | 1 |
Assessment from licensees for each licensed reactor | 127,000,000 |
Number of licensed reactors in US | 104 |
Nuclear accident assessment limitation per year per unit | 19,000,000 |
Number of licensed nuclear units | 6 |
Maximum assessment per nuclear incident | 764,000,000 |
Maximum payment required per accident in any one year | 114,000,000 |
Total amount of protection available | 13,000,000,000 |
Surcharge for legal expenses | 5.00% |
The U.S. Congress is required to take action if these layes are exhausted | 2 |
Amount of property, decommissioning, and decontamination insurance carried | 4,600,000,000 |
Amount of insurance available for loss at any one site | 2,100,000,000 |
Maximum amount of retrospecitve premiums | 120,000,000 |
Maximum idemnity if a covered accident tasks or keeps a nuclear unit offline | 490,000,000 |
Retrospective premiums | 35,000,000 |
Possible additional future costs for compliance with Clean Air Act requirements | 1,100,000,000 |
Accrual for Environmental Loss Contingencies, Gross | 16,000,000 |
Nuclear [Member] | ' |
Loss Contingencies [Line Items] | ' |
Present value of future decommissioning cost | 2,000,000,000 |
Non-nuclear [Member] | ' |
Loss Contingencies [Line Items] | ' |
Present value of future decommissioning cost | $1,100,000,000 |
Contingencies_and_Legal_Procee1
Contingencies and Legal Proceedings Legal Proceedings (Details) (USD $) | 9 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||
Jun. 30, 2014 | Oct. 31, 2007 | Jun. 30, 2014 | Apr. 30, 2011 | Jun. 30, 2011 | Jun. 30, 2014 | Jun. 30, 2010 | Sep. 30, 2010 | Mar. 31, 2010 | Dec. 31, 2010 | Jun. 30, 2012 | Jul. 31, 2013 | 31-May-13 | Aug. 31, 2011 | Jun. 30, 2008 | Sep. 30, 2012 | Nov. 30, 2009 | Sep. 30, 2012 | Jun. 30, 2014 | Dec. 31, 2011 | Aug. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Aug. 01, 2014 | |
reactors | General | Environmental Agreements | Environmental Agreements | Kingston Ash Spill | Kingston Ash Spill | Case Involving Tennessee Valley Authority Retirement System | Case Involving Tennessee Valley Authority Retirement System | Case Involving Tennessee Valley Authority Retirement System | Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage | Administrative Proceedings Regarding Sequoyah U1 and U2 [Member] | Administrative Proceedings Regarding Sequoyah U1 and U2 [Member] | Administrative Proceedings Regarding Bellefonte Units 3 and 4 | Administrative Proceedings Regarding Bellefonte Units 3 and 4 | Administrative Proceedings Regarding Bellefonte Units 3 and 4 | Administrative Proceedings Regarding Watts Bar Nuclear Plant Unit 2 | Administrative Proceedings Regarding Watts Bar Nuclear Plant Unit 2 | Gallatin Fossil Plant NPDES Permit Administrative Appeal [Member] | Petitions Resulting from Japanese Nuclear Events | Petitions Resulting from Japanese Nuclear Events | Other Noncurrent Liabilities [Member] | Accounts Payable and Accrued Liabilities [Member] | Other Regulatory Assets (Liabilities) [Member] | Scenario, Forecast [Member] | ||
Groups | Megawatts | Legal_actions | People | Years | Legal_actions | Legal_actions | People | Legal_actions | Legal_actions | Legal_actions | Legal_actions | General | General | General | Kingston Ash Spill | ||||||||||
Agreements | Units | Legal_actions | Legal_actions | ||||||||||||||||||||||
Legal Proceedings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal loss contingency accrual | ' | ' | $254,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $139,000,000 | $87,000,000 | $28,000,000 | ' |
Loss Contingency, Range of Possible Loss, Minimum | 1,100,000,000 | ' | 254,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Range of Possible Loss, Maximum | 1,200,000,000 | ' | 256,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of similar environmental agreements entered into | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of environmental agreements entered into with the EPA | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of environmental agreements entered into with Alabama, Kentucky, North Carolina, and Tennessee | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Board Members Appointed | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of environmental agreements entered into with environmental advocacy groups | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units to be idled | ' | ' | ' | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Megawatts option 1 | ' | ' | ' | ' | 2,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Megawatts option 2 | ' | ' | ' | ' | 3,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount to be invested in certain TVA environmental projects | ' | ' | ' | ' | 290,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount to be provided to fund environmental projects | ' | ' | ' | ' | 60,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount to pay civil penalties | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits filed | ' | ' | ' | ' | ' | 78 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits dismissed | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of active lawsuits | ' | ' | ' | ' | ' | 63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9 |
Number of lawsuits filed under various environmental statutes | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Civil penalty order issued June 1, 2010 | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of civil penalty order satisfied | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit against civil penalty order | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Down payment on natural resource damages | ' | ' | ' | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of participants that filed suit | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of TVARS Board members | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Retirement age of eligibility for cost of living adjustment before January 1, 2010 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Retirement age of eligibility for cost of living adjustment after January 1, 2010 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of defendants that filed a motion to dismiss | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of individual defendants | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining defendant | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days to file an ammended complaint | ' | ' | ' | ' | ' | ' | ' | '14 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units Affected by Paradise Case | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units at Paradise Fossil Plants | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of years that spent fuel can be stored after a plant's license is terminated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions submitted by BREDL BEST and MATRR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Opposed contentions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of petitioners with standing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of petitioners | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions left | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of nuclear reactors | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of admitted contentions submitted by BREDL and SACE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions submitted by BREDL and SACE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions no longer admitted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of BREDL contentions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions admitted for hearing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of SACE contentions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | 7 | 1 | ' | ' | ' | ' | ' | ' | ' |
Number of other petitioners | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contentions remaining | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of John Sevier units retired | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units at John Sevier Fossil | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of John Sevier units idled | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims not dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' |
Number of requests accepted by the NRC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' |
Number of separate petitions filed by the Natural Resources Defense Council | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12 | ' | ' | ' | ' |