DEI Document
DEI Document shares in Millions, $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($)shares | |
Document Information [Line Items] | |
Entity Registrant Name | Tennessee Valley Authority |
Entity Central Index Key | 1,376,986 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-K |
Document Period End Date | Sep. 30, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
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 OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Operating revenues | |||
Revenue from sales of electricity | $ 10,847 | $ 10,999 | $ 10,829 |
Other revenue | 156 | 138 | 127 |
Total operating revenues | 11,003 | 11,137 | 10,956 |
Operating expenses | |||
Fuel | 2,444 | 2,730 | 2,820 |
Purchased power | 950 | 1,094 | 1,027 |
Operating and maintenance | 2,838 | 3,341 | 3,428 |
Depreciation and amortization | 2,031 | 1,843 | 1,680 |
Tax equivalents | 525 | 540 | 548 |
Total operating expenses | 8,788 | 9,548 | 9,503 |
Operating income | 2,215 | 1,589 | 1,453 |
Other income (expense), net | 29 | 49 | 44 |
Interest expense | |||
Interest expense | 1,347 | 1,344 | 1,394 |
Allowance for funds used during construction | (214) | (175) | (168) |
Net interest expense | 1,133 | 1,169 | 1,226 |
Net income (loss) | $ 1,111 | $ 469 | $ 271 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Current assets | ||
Cash and cash equivalents | $ 300 | $ 500 |
Restricted cash and investments | 15 | 19 |
Accounts receivable, net | 1,600 | 1,676 |
Inventories, net | 1,031 | 1,056 |
Regulatory assets | 506 | 481 |
Other current assets | 54 | 56 |
Total current assets | 3,506 | 3,788 |
Property, plant, and equipment | ||
Completed plant | 50,069 | 47,564 |
Less accumulated depreciation | (26,318) | (24,589) |
Net completed plant | 23,751 | 22,975 |
Construction in progress | 7,147 | 5,951 |
Nuclear fuel | 1,415 | 1,322 |
Capital leases | 94 | 102 |
Total property, plant, and equipment, net | 32,407 | 30,350 |
Investment funds | 2,011 | 1,981 |
Regulatory and other long-term assets | ||
Regulatory assets | 10,418 | 8,994 |
Other long-term assets | 483 | 483 |
Total regulatory and other long-term assets | 10,901 | 9,477 |
Total assets | 48,825 | 45,596 |
Current liabilities | ||
Accounts payable and accrued liabilities | 2,127 | 2,050 |
Accrued interest | 366 | 380 |
Current portion of leaseback obligations | 79 | 75 |
Current portion of energy prepayment obligations | 100 | 100 |
Regulatory liabilities | 164 | 184 |
Short-term debt, net | 1,034 | 596 |
Current maturities of power bonds | 32 | 1,032 |
Current maturities of long-term debt of variable interest entities | 33 | 32 |
Total current liabilities | 3,935 | 4,449 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 7,107 | 5,839 |
Asset retirement obligations | 3,682 | 3,089 |
Other long-term liabilities | 2,219 | 1,962 |
Leaseback obligations | 537 | 616 |
Energy prepayment obligations | 210 | 310 |
Regulatory liabilities | 2 | 0 |
Total other liabilities | 13,757 | 11,816 |
Long-term debt, net | ||
Long-term power bonds, net | 22,684 | 21,948 |
Long-term debt of variable interest entities | 1,246 | 1,279 |
Total long-term debt, net | 23,930 | 23,227 |
Total liabilities | $ 41,622 | $ 39,492 |
Commitments and contingencies (Note 22) | ||
Proprietary capital | ||
Power program appropriation investment | $ 258 | $ 258 |
Power program retained earnings | 6,357 | 5,240 |
Total power program proprietary capital | 6,615 | 5,498 |
Nonpower programs appropriation investment, net | 590 | 601 |
Accumulated other comprehensive income (loss) | (2) | 5 |
Total proprietary capital | 7,203 | 6,104 |
Total liabilities and proprietary capital | $ 48,825 | $ 45,596 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities | |||
Net income (loss) | $ 1,111 | $ 469 | $ 271 |
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) | 2,077 | 1,888 | 1,723 |
Amortization of nuclear fuel cost | 277 | 279 | 268 |
Non-cash retirement benefit expense | 332 | 572 | 622 |
Prepayment credits applied to revenue | (100) | (100) | (102) |
Fuel cost adjustment deferral | (6) | (38) | 97 |
Fuel cost tax equivalents | (18) | 6 | 2 |
Changes in current assets and liabilities | |||
Accounts receivable, net | 93 | (79) | 114 |
Inventories and other current assets, net | (12) | 34 | 27 |
Accounts payable and accrued liabilities | (121) | 147 | (296) |
Accrued interest | (13) | 2 | 1 |
Regulatory assets costs | (23) | (56) | (21) |
Pension contributions | (282) | (256) | (6) |
Insurance recoveries | 63 | 175 | 47 |
Other, net | (63) | (63) | (150) |
Net cash provided by operating activities | 3,315 | 2,980 | 2,597 |
Cash flows from investing activities | |||
Construction expenditures | (2,850) | (2,384) | (2,051) |
Combustion turbine asset acquisition | (342) | 0 | 0 |
Nuclear fuel expenditures | (350) | (326) | (287) |
Purchases of investments, net | (52) | (48) | (48) |
Loans and other receivables | |||
Advances | (17) | (6) | (6) |
Repayments | 8 | 6 | 9 |
Other, net | 18 | 2 | (2) |
Net cash used in investing activities | (3,585) | (2,756) | (2,385) |
Long-term debt | |||
Issues of power bonds | 973 | 989 | 2,122 |
Issues of variable interest entities | 0 | 0 | 360 |
Redemptions and repurchases of power bonds | (1,180) | (365) | (2,358) |
Payments on debt of variable interest entities | (32) | (30) | (13) |
Short-term debt issues (redemptions), net | 437 | (1,837) | 924 |
Payments on leases and leasebacks | (80) | (73) | (446) |
Financing costs, net | (7) | (4) | (20) |
Payments to U.S. Treasury | (5) | (14) | (27) |
Other, net | (36) | 8 | (20) |
Net cash (used in) provided by financing activities | 70 | (1,326) | 522 |
Net change in cash and cash equivalents | (200) | (1,102) | 734 |
Cash and cash equivalents at beginning of the year | 500 | 1,602 | 868 |
Cash and cash equivalents at end of the year | $ 300 | $ 500 | $ 1,602 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Balance at beginning of year | $ 6,104 | $ 5,647 | $ 6,104 | $ 5,647 | $ 5,326 | ||
Net income (loss) | $ 502 | 81 | $ 322 | (67) | 1,111 | 469 | 271 |
Total other comprehensive income (loss) | (7) | 2 | 77 | ||||
Return on power program appropriation investment | (5) | (4) | (7) | ||||
Return of power program appropriation investment | (10) | (20) | |||||
Balance at end of year | 7,203 | 6,104 | 7,203 | 6,104 | 5,647 | ||
Power Program Appropriation Investment | |||||||
Balance at beginning of year | 258 | 268 | 258 | 268 | 288 | ||
Net income (loss) | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | ||||
Return on power program appropriation investment | 0 | 0 | 0 | ||||
Return of power program appropriation investment | 0 | (10) | (20) | ||||
Balance at end of year | 258 | 258 | 258 | 258 | 268 | ||
Power Program Retained Earnings | |||||||
Balance at beginning of year | 5,240 | 4,767 | 5,240 | 4,767 | 4,492 | ||
Net income (loss) | 1,122 | 477 | 282 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | ||||
Return on power program appropriation investment | (5) | (4) | (7) | ||||
Return of power program appropriation investment | 0 | 0 | |||||
Balance at end of year | 6,357 | 5,240 | 6,357 | 5,240 | 4,767 | ||
Nonpower Programs Appropriation Investment, Net | |||||||
Balance at beginning of year | 601 | 609 | 601 | 609 | 620 | ||
Net income (loss) | (11) | (8) | (11) | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | ||||
Return on power program appropriation investment | 0 | 0 | 0 | ||||
Return of power program appropriation investment | 0 | 0 | |||||
Balance at end of year | 590 | 601 | 590 | 601 | 609 | ||
Accumulated Other Comprehensive Income (Loss) Net Gains (Losses) on Cash Flow Hedges | |||||||
Balance at beginning of year | $ 5 | $ 3 | 5 | 3 | (74) | ||
Net income (loss) | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | (7) | 2 | 77 | ||||
Return on power program appropriation investment | 0 | 0 | 0 | ||||
Return of power program appropriation investment | 0 | 0 | |||||
Balance at end of year | $ (2) | $ 5 | $ (2) | $ 5 | $ 3 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Statement - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 1,111 | $ 469 | $ 271 |
Net unrealized gain (loss) on cash flow hedges | (72) | 4 | 78 |
Reclassification to earnings from cash flow hedges | 65 | (2) | (1) |
Total other comprehensive income (loss) | (7) | 2 | 77 |
Total comprehensive income (loss) | $ 1,104 | $ 471 | $ 348 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2015 | |
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 and public lands to provide recreational opportunities, adequate water supply, improved water quality, cultural and 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 United States Department of the Treasury ("U.S. Treasury") 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 (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. TVA fulfilled its requirement to repay $ 1.0 billion of the Power Program Appropriation Investment in 2014. Fiscal Year TVA's fiscal year ends September 30. Years ( 2015 , 2014 , 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. Based on current projections, 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 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. All 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 The accompanying consolidated financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA and three variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 10 . 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 considered 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 historical amounts have been reclassified in the Consolidated Statements of Cash Flows to conform to the current year presentation. Amounts previously presented in Cash flows from operating activities as Environmental cleanup costs - Kingston ash spill - non cash of $ 68 million and $ 72 million and Environmental cleanup costs – Kingston ash spill of $ (109) million and $ (99) million for the years ended September 30, 2014 and 2013 , respectively, are currently reported in Other, net. Cash and Cash Equivalents Cash includes cash on hand and non-interest bearing cash and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Restricted Cash and Investments Restricted cash and investments reflect amounts related to collateral posted with TVA by a swap counterparty. 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 September 30, 2015 , and 2014 , for accounts receivable. Additionally, loans receivable of $ 129 million and $ 92 million at September 30, 2015 , and 2014 , respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively, and reported net of allowances for uncollectible accounts of $8 million and $ 9 million at September 30, 2015 , and 2014 , respectively. Revenues Revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to six customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying consolidated statements of operations as a component of Sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. (Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve.) From time to time TVA transfers fiber optic capacity on TVA’s network to telecommunications service carriers and local power company customers of TVA ("LPCs") . These transactions are structured as indefeasible rights of use ("IRUs") , which are the exclusive right to use a specified amount of fiber optic capacity for a specified term. TVA accounts for the consideration received on transfers of fiber optic capacity for cash and on all of the other elements deliverable under an IRU as revenue ratably over the term of the agreement. TVA does not recognize revenue on any contemporaneous exchanges of its fiber optic capacity for an IRU of fiber optic capacity of the counterparty to the exchange. TVA engages in a wide array of arrangements in addition to power sales. TVA records revenue when it is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price or fee is fixed or determinable; and collectability is reasonably assured. Revenues from activities related to TVA’s overall mission are recorded as other operating revenue versus those that are not related to the overall mission, which are recorded in Other income (expense), net. Inventories Certain Fuel, Materials, and Supplies . Materials and supplies inventories are valued using an average unit cost method. A new average cost is computed after each inventory purchase transaction, and inventory issuances are priced at the latest moving weighted average unit cost. Coal, fuel oil, and natural gas inventories are valued using an average cost method. A new weighted average cost is computed monthly, and monthly issues are priced accordingly. Allowance for Inventory Obsolescence . TVA reviews material and supplies inventories by category and usage on a periodic basis. Each category is assigned a probability of becoming obsolete based on the type of material and historical usage data. Based on the estimated value of the inventory, TVA adjusts its allowance for inventory obsolescence. Emission Allowances . TVA has emission allowances for sulfur dioxide ("SO 2 ") and nitrogen oxides ("NO x ") which are accounted for as inventory. The average cost of allowances used each month is charged to operating expense based on tons of SO 2 and NO x emitted during the respective compliance periods. Allowances granted to TVA by the Environmental Protection Agency ("EPA") are recorded at zero cost. Property, Plant, and Equipment, and Depreciation Property, Plant, and Equipment. Additions to plant are recorded at cost, which includes direct and indirect costs and may include an allowance for funds used during construction ("AFUDC") , if eligible. The cost of current repairs and minor replacements is charged to operating expense. Nuclear fuel inventories, which are included in Property, plant, and equipment, are valued using the average cost method for raw materials and the specific identification method for nuclear fuel in a reactor. Amortization of nuclear fuel in a reactor is calculated on a units-of-production basis and is included in fuel expense. Depreciation. TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Accordingly, the original cost of property retired is charged to accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. Depreciation expense for the years ended September 30, 2015 , 2014 , and 2013 was $ 1.7 billion , $ 1.6 billion , and $ 1.4 billion , respectively. Depreciation expense expressed as a percentage of the average annual depreciable completed plant was 3.71 percent for 2015 , 3.42 percent for 2014 , and 3.12 percent for 2013 . Average depreciation rates by asset class are as follows: Property, Plant, and Equipment Depreciation Rates At September 30 (percent) 2015 2014 2013 Asset Class Nuclear 2.81 2.90 2.86 Coal-fired 5.50 4.37 3.47 Hydroelectric 1.30 1.44 1.30 Gas and oil-fired 3.18 3.23 3.21 Transmission 2.78 2.76 2.76 Other 8.65 8.40 8.14 In April 2011, TVA entered into two substantively similar agreements, one with the EPA and the other with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups (collectively, the "Environmental Agreements”). See Note 22 — Legal Proceedings — Environmental Agreements . Under the Environmental Agreements, TVA committed, among other things, to retire, on a phased schedule, 18 coal-fired units. Consistent with the Environmental Agreements, Units 1 and 2 at John Sevier Fossil Plant ("John Sevier") were retired on December 31, 2012, and Units 3 and 4 were idled on December 31, 2012 and subsequently retired on June 25, 2014. Units 3 and 5 at Widows Creek Fossil Plant ("Widows Creek") were retired on July 31, 2013, and Units 1, 2, 4, and 6 at Widows Creek were retired on July 31, 2014. On October 1, 2013, Colbert Fossil Plant ("Colbert") Unit 5 and Johnsonville Fossil Plant ("Johnsonville") Units 5, 6, 9, and 10 were idled. In addition, Units 7 and 8 at Johnsonville were idled on March 1, 2012, and Unit 10 at Shawnee Fossil Plant ("Shawnee") was idled in October 2010 and subsequently retired on June 30, 2014. On November 14, 2013, the TVA Board of Directors (the "TVA Board") approved the retirement of Colbert Units 1-5 no later than June 30, 2016, and the retirement of Widows Creek Unit 8. Additionally, the TVA Board approved the retirement of Paradise Fossil Plant ("Paradise") Units 1 and 2 upon the completion of a natural gas-fired plant at the Paradise location. On August 21, 2014, the TVA Board approved the retirement of Allen Fossil Plant ("Allen") Units 1-3 upon the completion of a natural gas-fired plant at the Allen location, but no later than December 31, 2018. On May 7, 2015, the TVA Board approved the retirement of Widows Creek Unit 7 no later than October 31, 2015, and Johnsonville Units 1-4 by December 31, 2017. TVA retired Widows Creek Units 7 and 8 on September 30, 2015. Depreciation rates are adjusted to reflect current assumptions so that the units will be fully depreciated by the applicable idle dates. As a result of TVA's decision to idle or retire units, TVA recognized $ 383 million , $ 206 million , and $ 49 million in accelerated depreciation expense related to the units during the years ended September 30, 2015 , 2014 , and 2013 , respectively. Capital Lease Agreements. Property, plant, and equipment also includes assets recorded under capital lease agreements. These primarily consist of a natural gas lateral pipeline, power production facilities, water treatment assets, and land of $ 94 million and $ 102 million at September 30, 2015 and 2014 , respectively. Amortization expense related to capital leases is included in Depreciation and amortization in TVA’s statements of operations. Allowance for Funds Used During Construction. AFUDC capitalized during the year ended September 30, 2015 , was $ 214 million , as compared to $ 175 million capitalized during the year ended September 30, 2014 . TVA may capitalize interest on eligible projects as AFUDC, based on the average interest rate of TVA’s outstanding debt. The allowance is applicable to construction in progress related to eligible projects with (1) an expected total project cost of $ 1.0 billion or more, and (2) an estimated construction period of at least three years in duration. During 2015, the TVA Board approved that AFUDC will only be applied to the Watts Bar Unit 2 completion project during 2016. The accumulated balance of costs, which is used to calculate AFUDC, averaged approximately $ 4.1 billion for the year ended September 30, 2015 . Subsequent to August 31, 2013, the accumulated balance of costs for Bellefonte Nuclear Plant ("Bellefonte") was removed from this calculation. Software Costs. TVA capitalizes certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in Property, plant, and equipment on the consolidated balance sheets and are amortized primarily over five years . At September 30, 2015 and 2014 , unamortized computer software costs totaled $ 18 million and $ 22 million , respectively. Amortization expense related to capitalized computer software costs was $ 38 million , $31 million , and $31 million for 2015 , 2014 , and 2013 , respectively. Software costs that do not meet capitalization criteria are expensed as incurred. Impairment of Assets. TVA evaluates long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. For long-lived assets, TVA bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, TVA determines whether an impairment has occurred based on an estimate of undiscounted cash flows attributable to the asset as compared with the carrying value of the asset. If an impairment has occurred, the amount of the impairment recognized is measured as the excess of the asset’s carrying value over its fair value. Additionally, TVA regularly evaluates construction projects. If the project is canceled or deemed to have no future economic benefit, the project is written off as an asset impairment or, upon Board approval, reclassified as a regulatory asset. Decommissioning Costs TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear 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 restoration. 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 9 — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 13 . Blended Low-Enriched Uranium Program Under the blended low-enriched uranium ("BLEU") program, TVA, the U.S. 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 $ 162 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 September 30, 2015 , TVA had paid out approximately $ 131 million for this program, and the obligation recorded was $ 12 million . Investment Funds Investment funds consist primarily of trust funds designated to fund decommissioning requirements (see Note 22 — Contingencies — Decommissioning Costs ), the Supplemental Executive Retirement Plan ("SERP") (see Note 21 — Overview of Plans and Benefits — Supplemental Executive Retirement Plan ), and the Long-Term Deferred Compensation Plan ("LTDCP") . The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds for the costs related to the future closure and retirement of TVA's other long-lived assets. NDT and SERP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity market performance, while ART and LTDCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance. The NDT funds, ART funds, SERP funds, and LTDCP funds are all classified as trading. Energy Prepayment Obligations In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW") , entered into an energy prepayment agreement under which MLGW prepaid TVA $ 1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months . TVA accounted for the prepayment as unearned revenue and is reporting the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2015 and 2014 Consolidated Balance Sheets. TVA expects to recognize approximately $ 100 million of noncash revenue in each year of the arrangement as electricity is delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. At September 30, 2015 , approximately $ 1.2 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $ 100 million of which was recognized as noncash revenue during each of 2015 , 2014 , and 2013 . Discounts, which are recorded as a reduction to electricity sales, amounted to $ 46 million for each of the years ended September 30, 2015 , 2014 , and 2013 . Insurance Although TVA uses private companies to administer its healthcare plans for eligible active and retired employees not covered by Medicare, TVA does not purchase health insurance. Third-party actuarial specialists assist TVA in determining certain liabilities for self-insured claims. TVA recovers the costs of claims through power rates and through adjustments to the participants’ contributions to their benefit plans. These liabilities are included in Other liabilities on the balance sheets. TVA sponsors an Owner Controlled Insurance Program which provides workers' compensation and liability insurance for a select group of contractors performing maintenance, modifications, outage, and new construction activities at TVA facilities. The Federal Employees' Compensation Act ("FECA") governs liability to employees for service-connected injuries. TVA purchases excess workers' compensation insurance above a self-insured retention. In addition to excess workers' compensation insurance, TVA purchases the following types of insurance: • Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See Note 22 — Contingencies — Nuclear Insurance . • Excess liability insurance for aviation, auto, marine, and general liability exposures. • Property insurance for certain conventional (non-nuclear) assets. The insurance policies are subject to the terms and conditions of the specific policy, including deductibles or self-insured retentions. To the extent insurance would not provide either a partial or total recovery of the costs associated with a loss, TVA would have to recover any such costs through other means, including through power rates. Research and Development Costs Research and development costs are expensed when incurred. TVA’s research programs include those related to power delivery technologies, emerging technologies (clean energy, renewables, distributed resources, and energy efficiency), technologies related to generation (fossil fuel, nuclear, and hydroelectric), and environmental technologies. Tax Equivalents The TVA Act requires TVA to make payments to states and counties in which TVA conducts its power operations and in which TVA has acquired power properties previously subject to state and local taxation. The total amount of these payments is five percent of gross revenues from sales of power during the preceding year, excluding sales or deliveries to other federal agencies and off-system sales with other utilities, with a provision for minimum payments under certain circumstances. TVA calculates tax equivalent expense by subtracting the prior year fuel cost-related tax equivalent regulatory asset or liability from the payments made to the states and counties and adding back the current year fuel cost-related tax equivalent regulatory asset or liability. Fuel cost-related tax equivalent expense is recognized in the same accounting period in which the fuel cost-related revenue is recognized. Maintenance Costs TVA records maintenance costs and repairs related to its property, plant, and equipment in the statements of operations as they are incurred except for the recording of certain regulatory assets for retirement and removal costs. |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of New Accounting Standards and Interpretations | Impact of New Accounting Standards and Interpretations The following accounting standard became effective for TVA on October 1, 2014 . Liabilities. In February 2013, the Financial Accounting Standards Board ("FASB") issued guidance on liabilities, 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 became effective for TVA on October 1, 2014, and is applied on a retrospective basis for all comparative periods presented. Adoption of this guidance did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standard was adopted by TVA as of September 30, 2015. Fair Value Measurements . In May 2015, the FASB issued guidance that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Investments measured at net asset value per share using the practical expedient will be presented as a reconciling item between the fair value hierarchy disclosure and the investment line item on the statement of financial position. This guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using the practical expedient. The guidance is effective for fiscal years beginning after December 15, 2015, and for interim periods within those years, and early adoption is permitted. The guidance is required to be applied retrospectively to all prior periods presented. TVA has early adopted this guidance as of September 30, 2015 . Adoption of this guidance 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 September 30, 2015 , 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. In August 2015, the FASB issued a one-year deferral of the effective date. The standard becomes effective for TVA on October 1, 2018, and allows for either a full retrospective or a modified retrospective application. Early adoption of the standard is permitted for TVA on October 1, 2017. 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. Consolidation. In February 2015, the FASB issued guidance that amends the consolidation analysis for VIEs as well as voting interest entities. The standard reduces the number of consolidation models through the elimination of the indefinite deferral for certain entities that was previously allowed and places more emphasis on risk of loss when determining a controlling financial interest. The standard becomes effective for TVA on October 1, 2016, and allows for either a full retrospective or a modified retrospective application. 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. Debt Issuance Costs . In April 2015, the FASB issued guidance that changes the presentation of debt issuance costs in financial statements. This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction of that debt liability, consistent with debt discounts. The guidance does not change the recognition and measurement of debt issuance costs. The standard becomes effective for TVA on October 1, 2016, and early adoption is permitted. The guidance is required to be applied retrospectively to all prior periods presented. TVA has early adopted this guidance as of October 1, 2015. If the guidance had been adopted by TVA as of September 30, 2015 , TVA would have reclassified $ 80 million of debt issuance costs from Other long-term assets as a reduction to Long-term power bonds, net and Long-term debt, net of variable interest entities. Inventory Valuation . In July 2015, the FASB issued guidance that changes the model used for the subsequent measurement of inventory from the previous lower of cost or market model, to the lower of cost or net realizable value. The guidance applies only to inventory valued using methods other than last-in, first out (“LIFO”) or the retail inventory method (for example, first-in, first-out (“FIFO”) or average cost). This amendment is intended to simplify the subsequent measurement of inventory. The standard becomes effective for TVA on October 1, 2017, including interim periods within that fiscal year, and is required to be applied prospectively. Early adoption is permitted. TVA is currently evaluating the potential impact of these changes on its consolidated financial statements. |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Restructuring As part of cost reduction initiatives, an organizational restructuring occurred in 2014, which resulted in approximately 2,000 position reductions achieved through attrition, elimination of vacant positions, and employees leaving TVA either voluntarily or involuntarily. In May 2015, TVA announced an additional limited reduction in force for selected business units of approximately 200 positions. Certain employees were eligible for severance payments as a result of these cost reduction initiatives. These severance amounts are included in Accounts payable and accrued liabilities and Other long-term liabilities, as applicable, on the consolidated balance sheets. The restructuring expenses are included in Operating and maintenance on the consolidated statements of operations. The table below summarizes the activity related to severance costs: Severance Cost Liability Activity For the years ended September 30 2015 2014 Severance cost liability at beginning of period $ 45 $ — Liabilities incurred during the period 9 65 Actual costs paid during the period (45 ) (20 ) Adjustments to estimate during the period (1 ) — Severance cost liability at end of period $ 8 $ 45 |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Sep. 30, 2015 | |
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 September 30 2015 2014 Power receivables $ 1,509 $ 1,576 Other receivables 92 101 Allowance for uncollectible accounts (1 ) (1 ) Accounts receivable, net $ 1,600 $ 1,676 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Sep. 30, 2015 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA’s inventories: Inventories, Net At September 30 2015 2014 Materials and supplies inventory $ 651 $ 616 Fuel inventory 414 473 Emission allowance inventory, net 13 13 Allowance for inventory obsolescence (47 ) (46 ) Inventories, net $ 1,031 $ 1,056 |
Acquisition (Notes)
Acquisition (Notes) | 12 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On April 14, 2015, TVA acquired a 700 -megawatt combined-cycle gas plant located in Ackerman, Mississippi, from Quantum Choctaw Power, an affiliate of Quantum Utility Generation. TVA has purchased the electricity generated by the plant since 2008. TVA acquired the plant for total cash consideration of $342 million . The plant is located within TVA's service area and is already connected to TVA's transmission grid. The plant is expected to provide greater transmission flexibility and system reliability as TVA retires older, coal-burning units. The facility has been renamed Ackerman Combined Cycle Plant. The purchase price allocation of the fair value of the assets acquired consisted of $333 million of Completed plant, $6 million of Other long-term assets, and $3 million of Inventories, net. Transaction costs were expensed as incurred and were not material. |
Net Completed Plant
Net Completed Plant | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |
Net Completed Plant | Net Completed Plant Net completed plant consisted of the following: Net Completed Plant At September 30 2015 2014 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Coal-fired $ 15,202 $ 9,942 $ 5,260 $ 14,078 $ 9,065 $ 5,013 Gas and oil-fired 3,794 1,194 2,600 3,411 1,094 2,317 Nuclear 18,920 10,063 8,857 18,489 9,593 8,896 Transmission 6,803 2,823 3,980 6,519 2,683 3,836 Hydroelectric 2,702 911 1,791 2,547 889 1,658 Other electrical plant 1,678 997 681 1,550 885 665 Subtotal 49,099 25,930 23,169 46,594 24,209 22,385 Multipurpose dams 928 371 557 928 364 564 Other stewardship 42 17 25 42 16 26 Subtotal 970 388 582 970 380 590 Total $ 50,069 $ 26,318 $ 23,751 $ 47,564 $ 24,589 $ 22,975 |
Other Long-Term Assets
Other Long-Term Assets | 12 Months Ended |
Sep. 30, 2015 | |
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 September 30 2015 2014 EnergyRight ® receivables $ 124 $ 123 Unamortized debt issue cost of power bonds and variable interest entities 80 68 Loans and other long-term receivables, net 126 87 Commodity contract derivative assets 1 — Prepaid capacity payments 52 58 Currency swap assets, net 25 — Restricted cash — 64 Other 75 83 Total other long-term assets $ 483 $ 483 In association with the EnergyRight ® Solutions program, LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or ten years . 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 September 30, 2015 and September 30, 2014 , the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $ 32 million and $ 33 million , respectively. See Note 12 for information regarding the associated financing obligation. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Sep. 30, 2015 | |
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 deferral 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 September 30 2015 2014 Current regulatory assets Deferred nuclear generating units $ 237 $ 237 Unrealized losses on commodity derivatives 162 134 Environmental agreements 47 54 Environmental cleanup costs – Kingston ash spill 43 47 Fuel cost adjustment receivable 15 9 Other current regulatory assets 2 — Total current regulatory assets 506 481 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 5,565 4,297 Unrealized losses on interest rate derivatives 1,236 957 Nuclear decommissioning costs 1,003 931 Environmental cleanup costs - Kingston ash spill 348 421 Non-nuclear decommissioning costs 828 645 Deferred nuclear generating units 1,042 1,255 Environmental agreements 55 108 Unrealized losses on commodity derivatives 63 72 Other non-current regulatory assets 278 308 Total non-current regulatory assets 10,418 8,994 Total regulatory assets $ 10,924 $ 9,475 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 164 $ 182 Unrealized gains on commodity derivatives — 2 Total current regulatory liabilities 164 184 Non-current regulatory liabilities Unrealized gains on commodity derivatives 2 — Total non-current regulatory liabilities 2 — Total regulatory liabilities $ 166 $ 184 Unrealized Gains (Losses) on Commodity Derivatives. Unrealized gains (losses) on coal purchase contracts, included as part of unrealized gains (losses) on commodity derivatives, relate to the mark-to-market ("MtM") valuation of coal purchase contracts. These contracts qualify as derivative contracts but do not qualify for cash flow hedge accounting treatment. As a result, TVA recognizes the changes in the market value of these derivative contracts as a regulatory liability or asset. This treatment reflects TVA’s ability and intent to recover the cost of these commodity contracts on a settlement basis for ratemaking purposes through the fuel cost adjustment. TVA recognizes the actual cost of fuel received under these contracts in fuel expense at the time the fuel is used to generate electricity. These contracts expire at various times through 2018. Unrealized gains and losses on contracts with a maturity of less than one year are included as a current regulatory asset or liability on TVA's consolidated balance sheets. See Note 16 . Deferred gains and losses relating to TVA’s Financial Trading Program ("FTP") represent net unrealized gains and losses on swaps, futures, options, and/or combinations of these instruments and are also included as part of unrealized gains (losses) on commodity derivatives. The program is used to reduce TVA’s economic risk exposure associated with purchases and sales of commodities used in electricity generation, purchases, and sales. TVA defers all FTP MtM unrealized gains or losses as regulatory liabilities or assets, respectively, and records realized gains or losses in fuel and purchased power expense to match the delivery period of the underlying commodity product. Net unrealized losses at September 30, 2015 , and September 30, 2014 , were approximately $ 116 million and $ 103 million , respectively. This accounting treatment reflects TVA’s ability and intent to recover the cost of these commodity contracts in future periods through the fuel cost adjustment. The current regulatory asset/liability for net unrealized gains and losses, included as part of the commodity derivatives, represents deferred gains and losses from contracts with a maturity of less than one year. Deferred Nuclear Generating Units . TVA’s 2015 Integrated Resource Plan, adopted by the TVA Board in August 2015, does not envision any immediate needs for significant baseload plants such as Bellefonte. Work on the Bellefonte Unit 1 site was slowed in 2014, and TVA has been focused on preserving Bellefonte for potential future development. In November 2013, the TVA Board approved the treatment of all amounts currently included in Construction in progress related to Bellefonte as a regulatory asset. Additionally, the TVA Board approved combining (1) the amounts related to Bellefonte previously included in Construction in progress, (2) the $ 619 million in Regulatory asset-Construction costs, and (3) the remaining amounts included in Regulatory asset-Deferred nuclear generating units into a single regulatory asset titled Deferred nuclear generating units totaling $ 1.3 billion at September 30, 2015 . Such amounts have been classified as a Regulatory asset in the September 30, 2015 Consolidated Balance Sheet. The TVA Board approved the recovery of this asset in future rates at an amount of $ 237 million per year until fully recovered. The amount to be amortized over the next year is included as a current regulatory asset on TVA's consolidated balance sheets. Environmental Agreements. In conjunction with the Environmental Agreements (see Note 22 — Legal Proceedings — Environmental Agreements ), TVA recorded certain liabilities totaling $ 360 million ($ 290 million investment in energy efficiency projects, demand response projects, renewable energy projects, and other TVA projects; $ 60 million to be provided to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects with preference for projects in the Tennessee River watershed; and $ 10 million in civil penalties). The TVA Board determined that these costs would be collected in customer rates in the future, and, accordingly, the amounts were deferred as a regulatory asset. Through the end of 2015 , $ 188 million has been paid with respect to environmental projects, $ 60 million has been paid to Alabama, Kentucky, North Carolina, and Tennessee, and $ 10 million has been paid with respect to civil penalties. The remaining deferred amounts will be charged to expense and recovered in rates over future periods as payments are made. Environmental Cleanup Costs – Kingston Ash Spill . In August 2009, TVA began using regulatory accounting treatment to defer all actual costs incurred and expected future costs related to the Kingston Fossil Plant ("Kingston") ash spill. The TVA Board approved a plan to amortize these costs over 15 years beginning October 1, 2009. Insurance proceeds are recorded as reductions to the regulatory asset and will reduce amounts collected in future rates. Amounts included as a current regulatory asset on TVA's consolidated balance sheets represent the amount to be amortized in the next 12 months . See Note 11 . Fuel Cost Adjustment Receivable. The fuel cost adjustment provides a mechanism to alter rates monthly to reflect changing fuel and purchased power costs, including realized gains and losses relating to transactions under TVA’s FTP. There is typically a lag between the occurrence of a change in fuel and purchased power costs and the reflection of the change in fuel rates. Balances in the fuel cost adjustment regulatory accounts represent over-collected or under-collected revenues that offset fuel and purchased power costs and are recovered or refunded in fuel rates. Deferred Pension Costs and Other Post-retirement Benefit Costs . TVA measures its benefit obligations related to pension and other post-retirement benefit ("OPEB") costs at each year-end balance sheet date. TVA recognizes the funded status of the plans on TVA's consolidated balance sheets which in an unregulated environment would result in a corresponding offset to accumulated other comprehensive income (loss) ("AOCI") . “Incurred cost” is a cost arising from cash paid out or an obligation to pay for an acquired asset or service, and a loss from any cause that has been sustained and for which payment has been or must be made. In the cases of pension and OPEB costs, the unfunded obligation represents a projected liability to the employee for services rendered, and thus it meets the definition of an incurred cost. Therefore, amounts that otherwise would be charged to AOCI for these costs are recorded as a regulatory asset since TVA has historically recovered pension and OPEB expense in rates. Through historical and current year expense included in ratemaking, the TVA Board has demonstrated the ability and intent to include pension and OPEB costs in allowable costs and in rates for ratemaking purposes. As a result, it is probable that future revenue will result from inclusion of the pension and OPEB regulatory assets in allowable costs for ratemaking purposes. These regulatory assets are classified as long-term, which is consistent with the pension and post-retirement liabilities, and not amortized to the consolidated statements of operations over a specified recovery period. They are adjusted either upward or downward each year in conjunction with the adjustments to the unfunded pension liability, as calculated by the actuaries. Ultimately this regulatory asset will be recognized in the consolidated statements of operations in the form of pension expense as the actuarial liability is eliminated in future periods. See Note 21 — Obligations and Funded Status . Additionally on October 1, 2014, TVA began recognizing pension costs as regulatory assets to the extent that the amount calculated under GAAP as pension expense differs from the amount TVA contributes to the pension plan. Unrealized Losses on Interest Rate Derivatives . TVA uses regulatory accounting treatment to defer the unrealized gains and losses on certain interest rate derivative contracts. When these contracts actually settle, the realized gains or losses are included in the ratemaking formula. The unrealized losses on these interest rate derivatives are recorded on TVA’s consolidated balance sheets as non-current regulatory assets, and the related realized gains or losses, if any, are recorded in TVA’s consolidated statements of operations. Nuclear Decommissioning Costs. Nuclear decommissioning costs include: (1) certain deferred charges related to the future closure and decommissioning of TVA’s nuclear generating units under the Nuclear Regulatory Commission ("NRC") requirements, (2) recognition of changes in the liability, (3) recognition of changes in the value of TVA's Nuclear Decommissioning Trust ("NDT") , and (4) certain other deferred charges under the accounting rules for AROs. These future costs will be funded through a combination of the NDT, future earnings on the NDT, and, if necessary, additional TVA cash contributions to the NDT and future earnings thereon. See Note 1 — Investment Funds. There is not a specified recovery period; therefore, the regulatory asset is classified as long-term consistent with the NDT investments and ARO liability. Non-Nuclear Decommissioning Costs. Non-nuclear decommissioning costs include: (1) certain deferred charges related to the future closure and decommissioning of TVA’s non-nuclear long-lived assets, (2) recognition of changes in the liability, (3) recognition of changes in the value of TVA’s Asset Retirement Trust ("ART") , and (4) certain other deferred charges under the accounting rules for AROs. TVA has established the ART to more effectively segregate, manage, and invest funds to help meet future non-nuclear AROs. The funds from the ART may be used, among other things, to pay the costs related to the future closure and retirement of non-nuclear long-lived assets under various legal requirements. These future costs can be funded through a combination of investment funds already set aside in the ART, future earnings on those investment funds, and future cash contributions to the ART and future earnings thereon. For 2016, TVA will recover in rates a portion of its estimated current year non-nuclear decommissioning costs and contributions to the ART. Deferred charges will be recovered in rates in 2017 and beyond based on an analysis of the expected expenditures, contributions, and investment earnings required to recover the decommissioning costs. Other Non-Current Regulatory Assets. Other non-current regulatory assets consist of the following: Debt Reacquisition Costs . Reacquisition expenses, call premiums, and other related costs, such as unamortized debt issue costs associated with redeemed Bond issues, are deferred and amortized (accreted) on a straight-line basis over the weighted average life of TVA’s debt portfolio. Nuclear Training Costs . As a result of refurbishing and restarting Browns Ferry Unit 1 in 2007 and the construction and startup of Watts Bar Nuclear Plant ("Watts Bar") Unit 2, nuclear training costs associated with these units have been deferred as a regulatory asset and will be amortized over a cost recovery period equivalent to the expected useful life of the operating nuclear units. Retirement Removal Costs . Retirement removal costs that are not legally required are capitalized into fixed assets to be depreciated consistent with the lives in the depreciation study. See Note 1 — Property, Plant, and Equipment, and Depreciation — Depreciation . The TVA Board has consistently set rates to cover the depreciation of these assets; therefore, these assets are probable of future recovery. Fuel Cost Adjustment Tax Equivalents. The fuel cost adjustment includes a provision related to the current funding of the future payments TVA will make. As TVA records the fuel cost adjustment, the percent of the calculation that relates to a future asset or liability for tax equivalent payments is recorded as a current regulatory asset or liability and paid in the following year. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Variable Interest Entities | Variable Interest Entities A VIE is an entity that either (1) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (2) 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 VIE, 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") . Southaven Holdco LLC ("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 a schedule of amortizing, semi-annual payments due each February 15 and August 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 and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is 7.0 percent , which is reflected as interest expense in the consolidated statements of operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC ("SSSL") on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively. 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 the Seven States Return. 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. In the event that TVA were to choose to exercise an early buy out feature of the Southaven Facility Lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven Facility Lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA. 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 is 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 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 each 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 September 30, 2015 and 2014 , as reflected in the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At September 30 2015 2014 Current liabilities of VIE Accrued interest of VIE $ 12 $ 12 Current portion of membership interests of VIE subject to mandatory redemption 2 2 Current maturities of long-term debt of VIE 33 32 Total current liabilities of VIE 47 46 Other liabilities of VIE Membership interests of VIE subject to mandatory redemption 35 37 Long-term debt of VIE, net Long-term debt of VIE 1,246 1,279 Total liabilities of VIE $ 1,328 $ 1,362 Interest expense of $ 63 million , $ 64 million and $ 50 million related to debt of variable interest entities and membership interests of variable interest entity subject to mandatory redemption is included in the Consolidated Statements of Operations for the years ended September 30, 2015 , 2014 , and 2013 , respectively. 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 Spill
Kingston Fossil Plant Ash Spill | 12 Months Ended |
Sep. 30, 2015 | |
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 Kingston failed, and over five million cubic yards of water and coal fly ash flowed out of the cell. TVA, in coordination with federal and state agencies, has completed cleanup and recovery efforts. TVA completed the removal of time-critical ash from the river during the third quarter of 2010. In November 2012, the 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 submitted a final completion report to the EPA on April 22, 2015, for review and approval. The report was approved by the EPA on September 9, 2015. Claims and Litigation See Note 22 — Legal Proceedings — Legal Proceedings Related to the Kingston Ash Spill and — Civil Penalty and Natural Resource Damages for the Kingston Ash Spill . Financial Impact 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 of September 30, 2015, TVA had spent $ 1.1 billion related to the ash spill. The remaining estimated liability at September 30, 2015 was $ 6 million and is included in Accounts payable and accrued liabilities. 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 excess liability insurance companies in accordance with the policies’ dispute resolution provisions. 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 total insurance proceeds of $336 million , of which $63 million was received during the year ended September 30, 2015 , and $7 million was received in November 2015. The insurance proceeds are being recorded as reductions to the regulatory asset and will reduce costs collected in future rates. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Sep. 30, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist primarily of liabilities related to certain derivative agreements as well as liabilities under agreements related to compliance with certain environmental regulations (see Note 22 — Legal Proceedings — Environmental Agreements ). The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities At September 30 2015 2014 Interest rate swap liabilities $ 1,627 $ 1,348 EnergyRight ® financing obligation 148 152 Environmental agreements liability 55 108 Currency swap liabilities 47 15 Membership interests of VIE subject to mandatory redemption 35 37 Commodity contract derivative liabilities 17 17 Commodity swap derivative liabilities 10 14 Other 280 271 Total other long-term liabilities $ 2,219 $ 1,962 EnergyRight ® Purchase Obligation . TVA purchases certain loans receivable from its LPCs in association with the EnergyRight ® Solutions program. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or ten years . 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 September 30, 2015 and September 30, 2014 , the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was approximately $ 37 million and $ 38 million , respectively. See Note 8 for information regarding the associated loans receivable. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the year ended September 30, 2015 , TVA's total ARO liability increased $ 674 million . In April 2015, the EPA published its final rule governing coal combustion residuals, which regulates landfill and impoundment location, design, and operations; dictates certain pond-closure conditions; and establishes groundwater monitoring and closure and post-closure standards. As a result of the ruling, TVA made revisions to the assumptions and estimates used to calculate its coal ash AROs. Increases to estimated project costs, including expansion of work scope and higher costs of materials, resulted in an increase of $469 million of the ARO liability during the year ended September 30, 2015 . TVA continues to evaluate the impact of the rule on its operations, including cost and timing estimates of related projects. As a result, further adjustments to its ARO liabilities may be required as estimates are refined. Also during 2015, TVA recorded additional obligations of $94 million for other new AROs related to TVA’s coal-fired plants and $7 million related to the acquisition of the Ackerman Combined Cycle Plant. See Note 6 . Additionally, an increase of $36 million for estimate revisions resulting from a license extension granted to the Sequoyah Nuclear Plant ("Sequoyah") and a decrease of $25 million for other non-nuclear changes in estimates were recorded. 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 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 . During the years ended September 30, 2015 and 2014 , both the nuclear and non-nuclear liabilities were increased by periodic accretion, partially offset by ash area settlement projects that were conducted during these periods. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During 2015 and 2014, $44 million and $ 40 million , respectively, of the related regulatory assets, were amortized into expense as these amounts were 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) — (14 ) (14 ) Change in estimate (nuclear site - specific studies) (472 ) — (472 ) Change in estimate (other) — (10 ) (10 ) Accretion (recorded to regulatory asset) 125 52 177 Balance at September 30, 2014 $ 2,052 $ 1,117 $ 3,169 (1) Settlements (ash storage areas) — (58 ) (58 ) Change in estimate (coal combustion residuals rule) — 469 469 Change in estimate (nuclear license extension) 36 — 36 Change in estimate (other) — (25 ) (25 ) Additional obligations — 101 101 Accretion (recorded to regulatory asset) 99 52 151 Balance at September 30, 2015 $ 2,187 $ 1,656 $ 3,843 (1) Note (1) The current portions of ARO in the amounts of $ 161 million and $ 80 million as of September 30, 2015 and 2014 , respectively, are included in Accounts payable and accrued liabilities. |
Debt and Other Obligations
Debt and Other Obligations | 12 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | . Debt and Other Obligations General The TVA Act authorizes TVA to issue Bonds in an amount not to exceed $ 30.0 billion at any time. At September 30, 2015 , TVA had only two types of Bonds outstanding: power bonds and discount notes. Power bonds have maturities between one and 50 years , and discount notes have maturities of less than one year . Power bonds and discount notes are both issued pursuant to Section 15d of the TVA Act and pursuant to the Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution") . Bonds are not obligations of the United States, and the United States does not guarantee the payments of principal or interest on Bonds. Power bonds and discount notes rank on parity and have first priority of payment from net power proceeds, which are defined as the remainder of TVA’s gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalent payments, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein. TVA considers its scheduled rent payments under its leaseback transactions, as well as its scheduled payments under its lease financing arrangements involving John Sevier CCF and Southaven CCF, as costs of operating, maintaining, and administering its power properties; however, such treatment is not free from doubt. Costs of operating, maintaining, and administering TVA's power properties have priority over TVA’s payments on the Bonds. Once net power proceeds have been applied to payments on power bonds and discount notes as well as any other Bonds that TVA may issue in the future that rank on parity with or subordinate to power bonds and discount notes, Section 2.3 of the Basic Resolution provides that the remaining net power proceeds shall be used only for minimum payments into the U.S. Treasury required by the TVA Act in repayment of, and as a return on, the Power Program Appropriation Investment, investment in power assets, additional reductions of TVA’s capital obligations, and other lawful purposes related to TVA’s power program. The TVA Act and the Basic Resolution each contain two bond tests: the rate test and the bondholder protection test. Under the rate test, TVA must charge rates for power which will produce gross revenues sufficient to provide funds for, among other things, debt service on outstanding Bonds. As of September 30, 2015 , TVA was in compliance with the rate test. See Note 1 — General. Under the bondholder protection test, TVA must, in successive five -year periods, use an amount of net power proceeds at least equal to the sum of (1) the depreciation accruals and other charges representing the amortization of capital expenditures and (2) the net proceeds from any disposition of power facilities for either the reduction of its capital obligations (including Bonds and the Power Program Appropriation Investment) or investment in power assets. TVA met the bondholder protection test for the five -year period ended September 30, 2015, and must next meet the bondholder protection test for the five -year period ending September 30, 2020 . Secured Debt of VIEs On August 9, 2013, SCCG issued secured notes totaling $ 360 million that bear interest at a rate of 3.846 percent . The SCCG notes require amortizing semi-annual payments on each February 15 and August 15, and mature on August 15, 2033. Also on August 9, 2013, SCCG issued $ 40 million of membership interests subject to mandatory redemption. The proceeds from the secured notes issuance and the issuance of the membership interests was paid to TVA in accordance with the terms of the Southaven head lease. See Note 10 — Southaven . TVA used the proceeds from the transaction primarily to fund the acquisition of the Southaven CCF from SSSL. On January 17, 2012, JSCCG issued secured notes totaling $ 900 million in aggregate principal amount that bear interest at a rate of 4.626 percent . Also on January 17, 2012, Holdco issued secured notes totaling $ 100 million that bear interest at a rate of 7.1 percent . The JSCCG notes and the Holdco notes require amortizing semi-annual payments on each January 15 and July 15, and mature on January 15, 2042. The Holdco notes require a $ 10 million balloon payment upon maturity. See Note 10 — John Sevier . TVA used the proceeds from the transaction to meet its requirements under the TVA Act. Secured debt of VIEs, including current maturities, outstanding at both September 30, 2015 and 2014 totaled approximately $ 1.3 billion . Short-Term Debt The weighted average rates applicable to short-term debt outstanding at September 30, 2015 , 2014 , and 2013 , were 0.055 percent , 0.002 percent , and 0.042 percent , respectively. During 2015 , 2014 , and 2013 , the maximum month-end outstanding balances of TVA short-term borrowings held by the public were $ 2.6 billion , $ 2.4 billion , and $ 3.3 billion , respectively. For these same years, the average amounts (and weighted average interest rates) of TVA short-term borrowings were approximately $ 1.4 billion ( 0.051 percent ), $ 1.7 billion ( 0.051 percent ), and $ 1.9 billion ( 0.078 percent ), respectively. Put and Call Options Bond issues of $ 456 million held by the public are redeemable in whole or in part, at TVA’s option, on call dates ranging from the present to 2020 and at call prices of 100 percent of the principal amount. Twelve Bond issues totaling $ 316 million , with maturity dates ranging from 2025 to 2043, include a “survivor’s option,” which allows for right of redemption upon the death of a beneficial owner in certain specified circumstances. These Bonds were classified as long-term as of September 30, 2015 and 2014 . Additionally, TVA has two issues of Putable Automatic Rate Reset Securities ("PARRS") outstanding. After a fixed-rate period of five years , the coupon rate on the PARRS may automatically be reset downward under certain market conditions on an annual basis. The coupon rate reset on the PARRS is based on a calculation. For both series of PARRS, the coupon rate will reset downward on the reset date if the rate calculated is below the then-current coupon rate on the Bond. The calculation dates, potential reset dates, and terms of the calculation are different for each series. The coupon rate on the 1998 Series D PARRS may be reset on June 1 (annually) if the sum of the five -day average of the 30-Year Constant Maturity Treasury ("CMT") rate for the week ending the last Friday in April, plus 94 basis points, is below the then-current coupon rate. The coupon rate on the 1999 Series A PARRS may be reset on May 1 (annually) if the sum of the five -day average of the 30-Year CMT rate for the week ending the last Friday in March, plus 84 basis points, is below the then-current coupon rate. The coupon rates may only be reset downward, but investors may request to redeem their Bonds at par value in conjunction with a coupon rate reset for a limited period of time prior to the reset dates under certain circumstances. The coupon rate for the 1998 Series D PARRS, which mature in June 2028, has been reset seven times, from an initial rate of 6.750 percent to the current rate of 3.550 percent . In connection with these resets, $ 301 million of the Bonds have been redeemed, so that $ 274 million of the Bonds were outstanding at September 30, 2015 . The coupon rate for the 1999 Series A PARRS, which mature in May 2029, has been reset six times, from an initial rate of 6.50 percent to the current rate of 3.360 percent . In connection with these resets, $ 293 million of the Bonds have been redeemed, so that $ 232 million of the Bonds were outstanding at September 30, 2015 . Due to the contingent nature of the put option on the PARRS, TVA determines whether the PARRS should be classified as long-term debt or current maturities of long-term debt by calculating the expected reset rate for the bonds on the calculation dates, described above. If the reset rate is less than the then-current coupon rate on the PARRS, the PARRS are included in current maturities. Otherwise, the PARRS are included in long-term debt. At September 30, 2015 , TVA has not determined that it is probable that the reset rate will be less than than the current coupon rate on the PARRS on the calculation dates; therefore, the par amount outstanding for each series of PARRS was classified as long-term debt. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2013 , to September 30, 2015 . Debt Securities Activity For the years ended September 30 2015 2014 Issues 2014 Series A (1) — 1,000 2015 Series A (2) 1,000 — Discount on debt issues (27 ) (11 ) Total $ 973 $ 989 Redemptions/Maturities (3) Variable interest entities $ 32 $ 30 electronotes ® 62 335 1998 Series D 50 — 1999 Series A 38 — 2005 Series B 1,000 — 2009 Series A 3 4 2009 Series B 27 26 Total $ 1,212 $ 395 Notes (1) The 2014 Series A bonds were issued at 98.94 percent of par. (2) The 2015 Series A bonds were issued at 97.31 percent of par. (3) All redemptions were at 100 percent of par. Debt Outstanding Total debt outstanding at September 30, 2015 , and 2014 , consisted of the following: Short-Term Debt At September 30 CUSIP or Other Identifier Maturity Call/(Put) Date Coupon Rate 2015 2014 Short-term debt, net of discounts $ 1,034 $ 596 Current maturities of long-term debt of variable interest entities issued at par 33 32 Current maturities of power bonds issued at par 880591EE8 11/15/2015 2.250% 2 3 880591EF5 12/15/2015 3.770% 27 26 880591DY5 6/15/2015 4.375% — 1,000 88059TEL1 11/15/2015 2.650% 3 3 Total current maturities of power bonds issued at par 32 1,032 Total current debt outstanding, net $ 1,099 $ 1,660 Long-Term Debt (1) At September 30 CUSIP or Other Identifier Maturity Coupon Rate Call Date 2015 Par 2014 Par Stock Exchange Listings electronotes ®(2) 05/15/2020 - 02/15/2043 2.375 - 4.375% 2/15/2015 - 02/15/2018 $ 325 $ 387 None 880591EE8 (3) 11/15/2015 2.250% — 2 None 880591DS8 12/15/2016 4.875% 524 524 New York 880591EA6 7/18/2017 5.500% 1,000 1,000 New York, Luxembourg 880591CU4 12/15/2017 6.250% 650 650 New York 880591EC2 4/1/2018 4.500% 1,000 1,000 New York, Luxembourg 880591EQ1 10/15/2018 1.750% 1,000 1,000 New York 880591EL2 2/15/2021 3.875% 1,500 1,500 New York 880591DC3 6/7/2021 5.805% (4) 303 324 New York, Luxembourg 880591EN8 8/15/2022 1.875% 1,000 1,000 New York 880591ER9 9/15/2024 2.875% 1,000 1,000 New York 880591CJ9 11/1/2025 6.750% 1,350 1,350 New York, Hong Kong, Luxembourg, Singapore 880591300 (5) 6/1/2028 3.550% 274 324 New York 880591409 (5) 5/1/2029 3.360% 232 270 New York 880591DM1 5/1/2030 7.125% 1,000 1,000 New York, Luxembourg 880591DP4 6/7/2032 6.587% (4) 378 406 New York, Luxembourg 880591DV1 7/15/2033 4.700% 472 472 New York, Luxembourg 880591EF5 (3) 6/15/2034 3.770% 360 388 None 880591DX7 6/15/2035 4.650% 436 436 New York 880591CK6 4/1/2036 5.980% 121 121 New York 880591CS9 4/1/2036 5.880% 1,500 1,500 New York 880591CP5 1/15/2038 6.150% 1,000 1,000 New York 880591ED0 6/15/2038 5.500% 500 500 New York 880591EH1 9/15/2039 5.250% 2,000 2,000 New York 880591EP3 12/15/2042 3.500% 1,000 1,000 New York 880591DU3 6/7/2043 4.962% (4) 227 243 New York, Luxembourg 880591CF7 7/15/2045 6.235% 7/15/2020 140 140 New York 880591EB4 1/15/2048 4.875% 500 500 New York, Luxembourg 880591DZ2 4/1/2056 5.375% 1,000 1,000 New York 880591EJ7 9/15/2060 4.625 % 1,000 1,000 New York 880591ES7 9/15/2065 4.250% 1,000 — New York Subtotal 22,792 22,037 Unamortized discounts, premiums, and other (108 ) (89 ) Total long-term outstanding power bonds, net 22,684 21,948 Long-term debt of variable interest entities 1,246 1,279 Total long-term debt, net $ 23,930 $ 23,227 Notes (1) Includes net exchange gain (loss) from currency transactions of $ 21 million at September 30, 2015 and $ (44) million at September 30, 2014 . (2) Includes one electronotes ® issue (88059TEL1) with partial maturities of principal for each required annual payment. (3) These Bonds include partial maturities of principal for each required annual payment. (4) The coupon rate represents TVA’s effective interest rate. (5) TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above. Maturities Due in the Year Ending September 30 2016 2017 2018 2019 2020 Thereafter Total Long-term power bonds and long-term debt of variable interest entities including current maturities (1) $ 65 $ 1,590 $ 1,718 $ 1,070 $ 70 $ 19,611 $ 24,124 Short-term debt, net of discounts 1,034 — — — — — 1,034 Note (1) Does not include noncash items of foreign currency exchange gain of $ 21 million and net discount on sale of Bonds of $ 108 million . 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 2016 with a maturity date of September 30, 2016. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue Bonds in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility 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 September 30, 2015 . 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 $ 500 million credit facility matures on February 1, 2020, one $ 1.0 billion credit facility matures on June 2, 2020, and another $ 1.0 billion credit facility matures on September 30, 2020. 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 September 30, 2015 , and September 30, 2014 , there were $ 1.1 billion and $ 1.0 billion , respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 16 — Other Derivative Instruments — Collateral . The following table provides additional information regarding TVA's funding available in the form of three long-term revolving credit facilities: Summary of Long-Term Credit Facilities At September 30, 2015 (in billions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability February 2020 $ 0.5 $ 0.5 $ — $ — June 2020 1.0 0.3 — 0.7 September 2020 1.0 0.3 — 0.7 Total $ 2.5 $ 1.1 $ — $ 1.4 Lease/Leasebacks Prior to 2004, TVA received approximately $ 945 million in proceeds by entering into leaseback transactions for 24 new peaking combustion turbine units ("CTs") . TVA also received approximately $ 389 million in proceeds by entering into lease/leaseback transactions for qualified technological equipment and software ("QTE") 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 September 30, 2015 , and September 30, 2014 , the outstanding leaseback obligations related to CTs and QTE were $ 616 million and $ 691 million , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Disclosure of Reclassification Amount [Text Block] | 15. 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. For the year-ended September 30, 2015 , TVA reclassified $ 65 million of losses related to its cash flow hedges from AOCI to Interest expense. For the year-ended September 30, 2014 , TVA reclassified $ 2 million of gains related to its cash flow hedges from AOCI to Interest expense. See Note 16 . 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 8 , Note 16 — Overview of Accounting Treatment , Note 17 , and Note 21 . |
Risk Management Activities and
Risk Management Activities and Derivative Transactions | 12 Months Ended |
Sep. 30, 2015 | |
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, and inflation as well as 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 its trust investment funds, it is TVA’s policy to enter into these derivative transactions solely for hedging purposes and not for speculative purposes. TVA plans to continue to manage fuel price volatility through various methods, but is currently evaluating the future use of financial instruments. 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 Other Comprehensive Income (Loss) For the years ended September 30 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative Hedging Instrument 2015 2014 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 $ (72 ) $ 4 Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) Amount of Gain (Loss) Reclassified from OCI to Interest Expense For the years ended September 30 Derivatives in Cash Flow Hedging Relationship 2015 2014 Currency swaps $ (65 ) $ 2 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 $14 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 (1) For the years ended September 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2015 2014 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) MtM gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in interest expense when payments are made or received on the swap settlement dates. (2) $ (114 ) $ (114 ) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) MtM 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 . — (64 ) Commodity derivatives under FTP To protect against fluctuations in market prices of purchased commodities (price risk) MtM 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. (98 ) (43 ) Notes (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 years ended September 30, 2015 and 2014 . (2) Generally, TVA maintains a level of outstanding discount notes equal to or greater than the notional amount of the interest rate swaps. However, in September 2015 TVA issued long-term Bonds in anticipation of the maturity of other long-term debt, and used the proceeds to pay down discount notes, which caused the balance of discount notes outstanding at September 30, 2015 , to temporarily fall below the notional amount of the interest rate swaps. Fair Values of TVA Derivatives At September 30 2015 2014 Derivatives that Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (41 ) Other long-term liabilities $ (15 ) Other long-term liabilities £250 million Sterling 25 Other long-term assets 56 Other long-term assets £150 million Sterling (6 ) Other long-term liabilities 8 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 (1,177 ) Other long-term liabilities (987 ) Other long-term liabilities $476 million notional (438 ) Other long-term liabilities (349 ) Other long-term liabilities $42 million notional (12 ) Other long-term liabilities (12 ) Other long-term liabilities Commodity contract derivatives (97 ) Other long-term assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(81) (96 ) Other current assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(80) FTP Derivatives under FTP (1) (116 ) Other current assets $(89); Other long-term liabilities $(10); Accounts payable and accrued liabilities $(17) (103 ) Other current assets $(69); Other long-term liabilities $(14); Accounts payable and accrued liabilities $(20) Note (1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $ 89 million and $ 69 million at September 30, 2015 and September 30, 2014 , 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 at September 30, 2015 : Currency Swaps Outstanding At September 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 exchange gain on the Bond liability is offset by an exchange loss on the swap contract. Conversely, when the dollar weakens against the British pound sterling, the exchange 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 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 years ended September 30, 2015 and 2014 , the changes in market value of the interest rate derivatives resulted in deferred unrealized losses of $ 279 million and $ 149 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 fair values as regulatory assets or liabilities on a gross basis. At September 30, 2015 , TVA's coal and natural gas contract derivatives both had terms of up to three years . Commodity Contract Derivatives At September 30 2015 2014 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 14 19 million tons $ (98 ) 24 31 million tons $ (86 ) Natural gas contract derivatives 33 134 million mmBtu $ 1 46 62 million mmBtu $ (10 ) Derivatives Under FTP. While TVA is currently evaluating the use of financial instruments for price hedging, certain natural gas futures and swaps remain as part of the suspended FTP. TVA has a 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 September 30, 2015 and 2014 , the risks hedged under the FTP were the economic risks associated with the prices of natural gas, fuel oil, and crude oil. At September 30, 2015 and 2014 , TVA had no outstanding coal contract derivatives under the FTP. There were no futures contracts or options contracts outstanding under the FTP at September 30, 2015 or 2014 , and swap contracts under the FTP had remaining terms of three years or less. Derivatives under Financial Trading Program At September 30 2015 2014 Notional Amount Fair Value (MtM) (in millions) Notional Amount Fair Value (MtM) (in millions) Natural gas (in mmBtu) Swap contracts 51,495,000 $ (116 ) 102,227,500 $ (103 ) Note Fair value amounts presented are based on the net commodity position with the 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 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 $ (11) million at September 30, 2015 , and $ (5) million at September 30, 2014 . TVA experienced the following unrealized and realized gains and losses related to the FTP at the dates and during the periods, as applicable, set forth in the tables below: Financial Trading Program Unrealized Gains (Losses) At September 30 FTP unrealized gains (losses) deferred as regulatory liabilities (assets) 2015 2014 Natural gas $ (116 ) $ (103 ) Financial Trading Program Realized Gains (Losses) For the years ended September 30 Decrease (increase) in fuel expense 2015 2014 Natural gas $ (79 ) $ (34 ) Fuel oil/crude oil 1 2 Financial Trading Program Realized Gains (Losses) For the years ended September 30 Decrease (increase) in purchased power expense 2015 2014 Natural gas $ (20 ) $ (11 ) Offsetting of Derivative Assets and Liabilities The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets as of September 30, 2015 , and September 30, 2014 , are shown in the table below. As of September 30, 2015 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 swap(s) (3),(4) $ 25 $ — $ 25 Commodity derivatives under FTP 49 (49 ) — Total derivatives subject to master netting or similar arrangement 74 (49 ) 25 Total derivatives not subject to master netting or similar arrangement 1 — 1 Total $ 75 $ (49 ) $ 26 Liabilities Currency swap(s) (4) $ 47 $ — $ 47 Interest rate swaps (4) 1,627 — 1,627 Commodity derivatives under FTP 165 (138 ) 27 Total derivatives subject to master netting or similar arrangement 1,839 (138 ) 1,701 Total derivatives not subject to master netting or similar arrangement 98 — 98 Total $ 1,937 $ (138 ) $ 1,799 As of September 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 swap(s) $ 64 $ (64 ) $ — Commodity derivatives under FTP 51 (51 ) — Total derivatives subject to master netting or similar arrangement 115 (115 ) — Total derivatives not subject to master netting or similar arrangement 1 — 1 Total $ 116 $ (115 ) $ 1 Liabilities Currency swap(s) (4) $ 15 $ — $ 15 Interest rate swaps (4) 1,348 — 1,348 Commodity derivatives under FTP 154 (120 ) 34 Total derivatives subject to master netting or similar arrangement 1,517 (120 ) 1,397 Total derivatives not subject to master netting or similar arrangement 97 — 97 Total $ 1,614 $ (120 ) $ 1,494 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) At September 30, 2015 , there were no securities posted by a counterparty on TVA's behalf to partially secure the asset position(s) of currency swaps in accordance with the collateral requirements for these derivatives. (4) Letters of credit of approximately $ 1.1 billion and $ 1.0 billion were posted as collateral at September 30, 2015 and September 30, 2014 , 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. TVA held $15 million and $19 million cash collateral in excess of collateral requirements at September 30, 2015 and September 30, 2014 , respectively. Cash collateral held in excess of collateral requirements is recorded in Restricted cash and investments with a corresponding obligation of the same amount recorded in Accounts payable and accrued liabilities. Other Derivative Instruments Investment Fund Derivatives . Investment funds consist primarily of funds held in the NDT, ART, SERP, and LTDCP. All securities in the trusts are classified as trading. See Note 17 — Investments Funds 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 September 30, 2015 and September 30, 2014 , the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in liability positions totaling $ 59 million at September 30, 2015 and asset positions totaling $ 3 million at September 30, 2014 . At September 30, 2015 , and September 30, 2014 , the fair value of other derivative instruments in these trusts was not material to TVA's consolidated financial statements. Collateral . TVA's interest rate swaps, currency swaps, and commodity derivatives under the FTP 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 September 30, 2015 , the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $ 1.7 billion . TVA's collateral obligations at September 30, 2015 , under these arrangements, were approximately $ 1.1 billion , for which TVA had posted approximately $ 1.1 billion 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, which are all located in the Tennessee Valley region. To a lesser extent, TVA is exposed to credit risk from directly served industries and federal agencies, 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 customers that represented 27 percent of total outstanding accounts receivable at both September 30, 2015 and September 30, 2014 . Credit of Derivative Counterparties . TVA has entered into physical and financial contracts that qualify as derivatives for hedging purposes, and TVA's NDT fund and qualified 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 September 30, 2015 , all of TVA's currency swaps, interest rate swaps, and commodity derivatives under the FTP were with banking counterparties whose Moody's credit rating was Baa1 or higher. TVA classifies qualifying forward coal contracts as derivatives. At September 30, 2015 , these contracts were with suppliers whose Moody's credit rating, or TVA’s internal analysis when such information was unavailable, ranged from Ca to Baa3, except for one counterparty whose rating was D. Emerging technologies, environmental regulations, and low gas prices have contributed to weak demand for coal. As a result, coal suppliers are facing increased financial pressure which has led to relatively poor credit ratings. Continued difficulties by coal suppliers could result in consolidations, bankruptcies, restructuring, contract renegotiations, or other alternatives. Under these scenarios and TVA’s potential available responses, TVA does not anticipate a significant financial impact in obtaining continued fuel supply for its coal-fired generation. See Derivatives Not Receiving Hedge Accounting Treatment above. TVA currently utilizes two 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 Fair Values of TVA Derivatives table above. 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 September 30, 2015 . 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. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2015 | |
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 and LTDCP assets, all changes in fair value of these assets and liabilities have been reflected in regulatory assets, regulatory liabilities, or accumulated other comprehensive income (loss) on TVA's consolidated balance sheets, and consolidated statements of comprehensive income (loss). Except for gains and losses on SERP and LTDCP assets, there has been no impact to TVA's consolidated statements of operations or its consolidated statements of cash flows related to these fair value measurements. Investments Funds At September 30, 2015 , Investment funds were composed of $ 2.0 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, SERP, and LTDCP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds 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 ("IRS") rules applicable to the qualified defined benefit pension plan. The LTDCP is designed to provide long-term incentives to executives to encourage them to stay with TVA and to provide competitive levels of total compensation to such executives. The NDT and SERP are invested in securities generally designed to achieve a return in line with overall equity market performance, and the ART and LTDCP are invested in securities generally designed to achieve a return in line with overall debt and equity market performance. The NDT, ART, SERP, and LTDCP 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, 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 $ 89 million at September 30, 2015 . These investments have no redemption or limited redemption options and may also impose restrictions on the NDT’s ability to liquidate its investments. 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 investments measured at net asset value in the fair value hierarchy. Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held by the NDT, ART, SERP, and LTDCP consist of either 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 or measured using observable inputs for similar instruments. 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 investments measured at net asset value in the fair value hierarchy. 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) At September 30 Financial Statement Presentation 2015 2014 SERP Other income (expense) $ (4 ) $ 1 LTDCP Other income (expense) (2 ) — NDT Regulatory asset (47 ) 35 ART Regulatory asset (17 ) 15 Currency and Interest Rate Derivatives See Note 16 — 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 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. Most of these contracts are valued based on market approaches which utilize short- and mid-term market-quoted prices from an external industry brokerage service. A small number of these contracts are valued based on a pricing model using long-term price estimates from TVA's coal price forecast. To value the volume option component of applicable coal contracts, TVA uses a Black-Scholes pricing model which includes inputs from the forecast, contract-specific terms, and other market inputs. These contracts are classified as Level 3 valuations. Commodity Derivatives Under FTP. These contracts are valued based on market approaches which utilize Chicago Mercantile Exchange ("CME") quoted prices and other observable inputs. 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 16 — 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 for 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 2014) 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 $ 1 million decrease in the fair value of both assets and liabilities at September 30, 2015. 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 at September 30, 2015 , and September 30, 2014 . 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 September 30, 2015 Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments Equity securities $ 166 $ — $ — $ 166 Debt securities U.S. government corporations and agencies 203 31 — 234 Corporate debt securities — 225 — 225 Residential mortgage-backed securities — 17 — 17 Commercial mortgage-backed securities — 7 — 7 Collateralized debt obligations — 29 — 29 Institutional mutual funds 91 — — 91 Forward debt securities contracts — (59 ) — (59 ) Private partnerships measured at net asset value (1) — — — 240 Commingled funds measured at net asset value (1) — — — 1,061 Total investments 460 250 — 2,011 Currency swap(s) (2) — 25 — 25 Commodity contract derivatives — — 1 1 Commodity derivatives under FTP (2) Swap contracts — — — — Total $ 460 $ 275 $ 1 $ 2,037 Liabilities Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Currency swap(s) (2) $ — $ 47 $ — $ 47 Interest rate swaps — 1,627 — 1,627 Commodity contract derivatives — — 98 98 Commodity derivatives under FTP (2) Swap contracts — 27 — 27 Total $ — $ 1,701 $ 98 $ 1,799 Notes (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (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, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements At September 30, 2014 Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments Equity securities $ 162 $ — $ — $ 162 Debt securities U.S. government corporations and agencies 46 36 — 82 Corporate debt securities — 290 — 290 Residential mortgage-backed securities — 14 — 14 Commercial mortgage-backed securities — 7 — 7 Collateralized debt obligations — 29 — 29 Institutional mutual funds 101 — — 101 Forward debt securities contracts — 3 — 3 Private partnerships measured at net asset value (1) — — — 214 Commingled funds measured at net asset value (1) — — — 1,079 Total investments 309 379 — 1,981 Currency swap(s) (2) — — — — Commodity contract derivatives — — 1 1 Commodity derivatives under FTP (2) Swap contracts — — — — Total $ 309 $ 379 $ 1 $ 1,982 Liabilities Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Currency swap(s) (2) $ — $ 15 $ — $ 15 Interest rate swaps — 1,348 — 1,348 Commodity contract derivatives — — 97 97 Commodity derivatives under FTP (2) Swap contracts — 34 — 34 Total $ — $ 1,397 $ 97 $ 1,494 Notes (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (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 any cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities . TVA uses internal valuation specialists for the calculation of its commodity contract derivatives 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 commodity contract derivatives measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Fair Value Measurements Using Significant Unobservable Inputs Commodity Contract Derivatives Balance at October 1, 2013 $ (140 ) Purchases — Issuances — Sales — Settlements 33 Net unrealized gains (losses) deferred as regulatory assets and liabilities 11 Balance at September 30, 2014 (96 ) Purchases — Issuances — Sales — Settlements — Net unrealized gains (losses) deferred as regulatory assets and liabilities (1 ) Balance at September 30, 2015 $ (97 ) 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 September 30 2015 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives 1 Pricing model Coal supply and demand 0.8 - 1.0 billion tons/year Long-term market prices $10.64 - $103.41/ton Liabilities Commodity contract derivatives 98 Pricing model Coal supply and demand 0.8 - 1.0 billion tons/year Long-term market prices $10.64 - $103.41/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30 2014 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 1 Discounted cash flow Credit risk 2 - 5 % (1) Pricing model Coal supply and demand 1.0 - 1.1 billion tons/year Long-term market prices $11.24 - $67.07/ton Liabilities Commodity contract derivatives $ 97 Pricing model Coal supply and demand 1.0 - 1.1 billion tons/year Long-term market prices $11.24 - $67.07/ton Note (1) Applies to two contracts. 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 value of the financial instruments held at September 30, 2015 , and September 30, 2014 , 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 values of TVA's financial instruments not recorded at fair value at September 30, 2015 , and September 30, 2014 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At September 30 2015 2014 Valuation Classification Carrying Amount Fair Value Carrying Amount Fair Value EnergyRight ® receivables (including current portion) Level 2 $ 156 $ 162 $ 156 $ 166 Loans and other long-term receivables, net (including current portion) Level 2 $ 129 $ 117 $ 92 $ 81 EnergyRight ® purchase obligation (including current portion) Level 2 $ 185 $ 208 $ 190 $ 215 Unfunded loan commitments Level 2 $ — $ 9 $ — $ 18 Membership interests of variable interest entity subject to mandatory redemption (including current portion) Level 2 $ 37 $ 47 $ 39 $ 50 Long-term outstanding power bonds (including current maturities), net Level 2 $ 22,716 $ 25,468 $ 22,980 $ 26,889 Long-term debt of variable interest entities (including current maturities) Level 2 $ 1,279 $ 1,407 $ 1,311 $ 1,425 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 value for loans and other long-term receivables is estimated by determining the present value of future cash flows using a discount rate equal to lending rates for similar loans made to borrowers with similar credit ratings and for similar remaining maturities, where applicable. The fair value of 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 value of other long-term debt and membership interests of variable interest entity subject to mandatory redemption is 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. |
Proprietary Capital
Proprietary Capital | 12 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Proprietary Capital | Proprietary Capital Appropriation Investment TVA’s power program and stewardship (nonpower) programs were originally funded primarily by appropriations from Congress. In 1959, Congress passed an amendment to the TVA Act that required TVA’s power program to be self-financing from power revenues and proceeds from power program financings. While TVA’s power program did not directly receive appropriated funds after it became self-financing, TVA continued to receive appropriations for certain multipurpose and other nonpower mission-related activities as well as for its stewardship activities. TVA has not received any appropriations from Congress for any activities since 1999, and since that time, TVA has funded stewardship program activities primarily with power revenues. The 1959 amendment to the TVA Act also required TVA, beginning in 1961, to make annual payments to the U.S. Treasury from net power proceeds as a repayment of and as a return on the Power Program Appropriation Investment until an additional $ 1.0 billion of the Power Program Appropriation Investment has been repaid. TVA paid $ 10 million for 2014 as a repayment of the Power Program Appropriation Investment. With the 2014 payment, TVA fulfilled its requirement to repay $ 1.0 billion of the Power Program Appropriation Investment. The TVA Act requires TVA to continue making payments to the U.S. Treasury as a return on the remaining $ 258 million of the Power Program Appropriation Investment. The table below summarizes TVA's activities related to appropriated funds. Summary of Proprietary Capital Activity At or for the years ended September 30 2015 2014 Appropriation Investment Power Program Nonpower Programs Power Program Nonpower Programs Balance at beginning of year $ 258 $ 4,351 $ 268 $ 4,351 Return of power program appropriation investment — — (10 ) — Balance at end of year 258 4,351 258 4,351 Retained Earnings Balance at beginning of year 5,240 (3,750 ) 4,767 (3,742 ) Net income (expense) for year 1,122 (11 ) 477 (8 ) Return on power program appropriation investment (5 ) — (4 ) — Balance at end of year 6,357 (3,761 ) 5,240 (3,750 ) Net proprietary capital at September 30 $ 6,615 $ 590 $ 5,498 $ 601 Payments to the U.S. Treasury TVA paid the U.S. Treasury $ 5 million in 2015 , $ 4 million in 2014 , and $ 7 million in 2013 as a return on the Power Program Appropriation Investment. The amount of the return on the Power Program Appropriation Investment is based on the Power Program Appropriation Investment balance at the beginning of that year and the computed average interest rate payable by the U.S. Treasury on its total marketable public obligations at the same date. The interest rates payable by TVA on the Power Program Appropriation Investment were 2.04 percent , 1.97 percent , and 2.10 percent for 2015 , 2014 , and 2013 , respectively. Accumulated Other Comprehensive Income (Loss) The items included in Accumulated other comprehensive income (loss) consist of market valuation adjustments for certain derivative instruments. See Note 16 . TVA records exchange rate gains and losses on debt in net income and marks its currency swap assets and liabilities to market through other comprehensive income. TVA had unrealized gains (losses) of $ (72) million and $ 4 million in 2015 and 2014 , respectively, on the mark-to-market of currency swaps. TVA then reclassifies an amount out of accumulated other comprehensive income into net income, offsetting the gain/loss from recording the exchange gain/loss on the debt. The amounts reclassified from other comprehensive income into net income resulted in increases (decreases) to net income of $ (65) million , $ 2 million , and $ 1 million in 2015 , 2014 , and 2013 , respectively. These reclassifications, coupled with the recording of the exchange gain/loss on the debt, did not have an impact on net income in 2015 , 2014 , and 2013 . Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $ 14 million of losses from accumulated other comprehensive income 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. |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Sep. 30, 2015 | |
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 years ended September 30 2015 2014 2013 Interest income $ 24 $ 23 $ 23 External services 12 19 18 Gains (losses) on investments (1 ) 6 4 Miscellaneous (6 ) 1 (1 ) Total other income (expense), net $ 29 $ 49 $ 44 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Interest paid was $ 1.3 billion in 2015 , 2014 , and 2013 , respectively. These amounts differ from interest expense due to the timing of payments and interest capitalized of $ 214 million in 2015 , $ 175 million in 2014 , and $ 168 million in 2013 as a part of major capital expenditures. Construction in progress and Nuclear fuel expenditures included in Accounts payable and accrued liabilities at September 30, 2015 , 2014 , and 2013 were $ 530 million , $ 391 million , and $ 270 million , respectively, and are excluded from the Statements of Consolidated Cash Flows for the years ended September 30, 2015 , 2014 , and 2013 as non-cash investing activities. In November 2013, in accordance with the regulated operations property, plant and equipment accounting guidance, the TVA Board approved the treatment of all amounts currently included in Construction in progress related to Bellefonte as a regulatory asset. Bellefonte amounts included in Construction expenditures for 2013 were $ 162 million . Assets acquired through capital leases of $ 70 million and $ 20 million for the years ended September 30, 2014 and 2013 , respectively, were excluded from the Statements of Consolidated Cash Flows for the years ended September 30, 2014 and 2013 as non-cash financing activities. Cash flows from futures contracts, forward contracts, option contracts, and swap contracts that are accounted for as hedges are classified in the same category as the item being hedged or on a basis consistent with the nature of the instrument. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans TVA sponsors a qualified defined benefit pension plan that covers most of its full-time employees hired prior to July 1, 2014, 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. Overview of Plans and Benefits Retirement Plans. TVA sponsors a qualified defined benefit pension plan and a qualified defined contribution 401(k) plan for most of its full-time annual employees hired prior to July 1, 2014, that provides two benefit structures: the Original Benefit Structure and the Cash Balance Benefit Structure. Eligible employees initially hired on or after January 1, 1996, must participate in the Cash Balance Benefit Structure. Employees hired after July 1, 2014, qualify for a retirement benefit as participants in the Employer Automatic Benefit Structure and will be eligible for a defined contribution benefit in the 401(k) plan only. A summary of the benefits provided by each structure is as follows: • Original Benefit Structure. The pension benefit for a member participating in the Original Benefit Structure is based on the member’s creditable service, the member’s average monthly salary for the highest three consecutive years of eligible compensation, and a pension factor based on the member’s age and years of service, less a Social Security offset. In addition, TVA makes matching contributions of 25 cents on the dollar (up to 1.5 percent of eligible compensation) to the 401(k) plan for members participating in the Original Benefit Structure. • Cash Balance Benefit Structure. The pension benefit for a member participating in the Cash Balance Benefit Structure is based on credits accumulated in the member’s account and the member’s age. A member’s account receives pay credits equal to six percent of his or her eligible compensation. The account also receives interest credits at a rate set at the beginning of each calendar year equal to the change in the Consumer Price Index for All Urban Consumers ("CPI-U") plus three percent , with the provision that the rate may not be less than six percent or more than ten percent . The interest crediting rate was six percent for calendar years 2015 and 2014 . In addition, TVA makes matching contributions of 75 cents on the dollar (up to 4.5 percent of eligible compensation) to the 401(k) plan for members participating in the Cash Balance Benefit Structure. • Employer Automatic Benefit Structure. Members participating in the Employer Automatic Benefit Structure receive an automatic, non-elective contribution by TVA to the 401(k) plan equal to 4.5 percent of eligible compensation and matching contributions by TVA to the 401(k) plan of 75 cents on the dollar (up to 4.5 percent of eligible compensation). There are two investment funds within the defined benefit pension plan: the Fixed Benefit Fund and the Variable Fund. TVA's plan contributions are deposited in the Fixed Benefit Fund. Eligible employees in the Original Benefit Structure and Cash Balance Benefit Structure are allowed to make voluntary contributions to either the Variable Fund, the Fixed Fund within the Fixed Benefit Fund, or both. Employee contributions are limited to $10,000 per year per eligible employee. The pension plan pays interest at the lesser of six percent or the actuarial assumed rate of return less 0.5 percent to employees in the Fixed Fund. Employee contributions in the Fixed Fund were credited an annual rate of interest of six percent during 2015 and 2014 , resulting in credit amounts of $ 26 million and $ 33 million , respectively. Employee contributions to the Variable Fund are invested in an S&P 500 Stock Index Fund. The defined benefit pension plan and the defined contribution 401(k) plan are administered by a separate legal entity, TVARS, which is governed by its own board of directors (the "TVARS Board") . Upon notification by the TVARS Board of the minimum required and recommended contributions, TVA determines the level of contribution to make to TVARS to fund the defined benefit pension plan for the upcoming fiscal year. Members of both the Original Benefit Structure and the Cash Balance Benefit Structure can also become eligible for a supplemental pension benefit based on age and years of service at retirement, which is designed to help offset the cost of retiree medical insurance. 401(k) Plan Contributions . TVA made non-elective and matching contributions of approximately $ 36 million to the plan during 2015 , $ 35 million during 2014 , and $ 34 million during 2013 . Supplemental Executive Retirement Plan. TVA has established a SERP for certain executives in critical positions to provide supplemental pension benefits tied to compensation that exceeds limits imposed by IRS rules applicable to the qualified defined benefit pension plan. TVA has historically funded the annual calculated expense. Other Post-Retirement Benefits. TVA sponsors two unfunded post-retirement benefit plans that provide for non-vested contributions toward the cost of certain eligible retirees’ medical coverage. The first plan covers only certain retirees and surviving dependents who do not qualify for TVARS benefits, including the supplemental pension benefit. The second plan is designed to place a limit on the out-of-pocket amount certain eligible retirees pay for medical coverage and provides a credit based on years of TVA service and monthly base pension amount, reduced by any TVARS supplemental pension benefits or any TVA contribution from the first plan, described above. Other Post-Employment Benefits. TVA employees injured in work-related incidents are covered by the workers’ compensation program for federal employees administered through the Department of Labor by the Office of Workers’ Compensation Programs in accordance with the provisions of FECA. FECA provides compensation and medical benefits to federal employees for permanent and temporary disability due to employment-related injury or disease. Accounting Mechanisms Regulatory Accounting. TVA has classified all amounts related to unrecognized prior service costs, net actuarial gains or losses, and the funded status as regulatory assets as such amounts are probable of collection in future rates. On October 1, 2014, TVA began recognizing pension costs as regulatory assets to the extent that the amount calculated under GAAP as pension expense differs from the amount TVA contributes to the pension plan. Cost Method. TVA uses the projected unit credit cost method to determine the service cost and the projected benefit obligation for retirement, termination, and ancillary benefits. Under this method, a “projected accrued benefit” is calculated at the beginning of the year and at the end of the year for each benefit that may be payable in the future. The “projected accrued benefit” is based on the plan’s accrual formula and upon service at the beginning or end of the year, but it uses final average compensation, social security benefits, and other relevant factors projected to the age at which the employee is assumed to leave active service. The projected benefit obligation is the actuarial present value of the “projected accrued benefits” at the beginning of the year for employed participants and is the actuarial present value of all benefits for other participants. The service cost is the actuarial present value of the difference between the “projected accrued benefits” at the beginning and end of the year. Amortization of Net Gain or Loss. TVA utilizes the corridor approach for gain/loss amortization. Differences between actuarial assumptions and actual plan results are deferred and amortized into periodic cost only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees. Asset Method. TVA recognizes the impact of asset performance on pension expense over a three -year phase-in period through a “market-related” value of assets calculation. Since the “market-related” value of assets recognizes investment gains and losses over a three -year period, the future value of assets will be impacted as previously deferred gains or losses are recognized. The “market-related” value is used in calculating expected return on plan assets and net gain or loss for pension cost determination. Obligations and Funded Status The changes in plan obligations, assets, and funded status for the years ended September 30, 2015 and 2014 , were as follows: Obligations and Funded Status For the years ended September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 12,265 $ 11,471 $ 652 $ 656 Service cost 130 130 16 18 Interest cost 540 558 29 32 Plan participants’ contributions 25 28 — — Collections (1) — — 94 93 Amendments — 2 — — Actuarial loss (gain) 556 722 3 (21 ) Net transfers from variable fund/401(k) plan 11 13 — — Expenses paid (6 ) (6 ) — — Benefits paid (697 ) (653 ) (137 ) (126 ) Benefit obligation at end of year 12,824 12,265 657 652 Change in plan assets Fair value of net plan assets at beginning of year 7,507 7,221 — — Actual return on plan assets (325 ) 648 — — Plan participants’ contributions 25 28 — — Collections (1) — — 94 93 Net transfers from variable fund/401(k) plan 11 13 — — Employer contributions (2) 282 256 43 33 Expenses paid (6 ) (6 ) — — Benefits paid (697 ) (653 ) (137 ) (126 ) Fair value of net plan assets at end of year 6,797 7,507 — — Funded status $ (6,027 ) $ (4,758 ) $ (657 ) $ (652 ) Notes (1) Collections include retiree contributions as well as federal reinsurance payments and provider discounts and rebates. (2) Other Post-Retirement Benefits Employer contributions are reduced by federal reinsurance payments and provider discounts and rebates. The $ 556 million pension actuarial loss for 2015 is primarily due to the change in the mortality assumption, which increased the projected benefit obligation by $ 518 million . Additional losses of $ 349 million were due to demographic experience from the impact of TVA’s organization restructuring in 2014 and 2015 and assumptions on the forms of benefit payment elections. These losses were partially offset by assumption changes for the COLA of $ 232 million reflecting a slower than anticipated economic recovery and increasing the discount rate from 4.45 percent to 4.50 percent which decreased the liability by $ 79 million . The discount rate increased primarily due to the longer expected duration as a result of the new mortality assumption. The pension actuarial loss for 2014 primarily reflects the impact of the decrease in the discount rate from 5.00 percent to 4.45 percent, which increased the liability by approximately $ 729 million . Additional losses were due to demographic experience from the impact of TVA’s organizational restructuring in 2014. This increased the projected benefit obligation by $ 36 million . These losses were partially offset by the $ 88 million gain from the change in the retirement rates assumptions based on a five -year experience study. The other post-retirement actuarial loss for 2015 is due primarily to an updated mortality assumption resulting in a longer expected duration of benefit payments which increased the liability by $ 21 million and actuarial losses of $ 20 million due to demographic experience, including assumption changes. These losses were partially offset by assumption changes for updated per capita claims costs and retiree contributions of $ 30 million to reflect observed and anticipated plan experience. Additionally, the discount rate increased from 4.50 percent to 4.65 percent decreasing the liability by $ 13 million . The discount rate increased primarily due to the longer expected duration as a result of the new mortality assumption. The other post-retirement actuarial gain for 2014 was primarily due to demographic experience related to updated per capita claims costs and retiree contributions, which decreased the liability by $ 64 million . The change in the retirement rates assumptions provided an additional gain of $ 16 million . These gains were partially offset by the decrease in the discount rate from 5.05 percent to 4.50 percent and the reduction in force impact, which increased the liability by $ 43 million and $ 17 million , respectively. Amounts related to these benefit plans recognized on TVA's consolidated balance sheets consist of regulatory assets that have not been recognized as components of net periodic benefit cost at September 30, 2015 and 2014 , and the funded status of TVA’s benefit plans, which are included in Accounts payable and accrued liabilities and Post-retirement and post-employment benefit obligations: Amounts Recognized on TVA's Consolidated Balance Sheets At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Regulatory assets $ 5,425 $ 4,157 $ 140 $ 140 Accounts payable and accrued liabilities (6 ) (5 ) (37 ) (38 ) Pension and post-retirement benefit obligations (1) (6,021 ) (4,753 ) (620 ) (614 ) Note (1) Table above excludes $465 million and $472 million of post-employment benefit costs that are recorded in post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2015 and 2014 , respectively. Unrecognized amounts included in regulatory assets yet to be recognized as components of accrued benefit cost at September 30 consisted of: Post-Retirement Benefit Costs Deferred as Regulatory Assets At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Unrecognized prior service credit $ (158 ) $ (180 ) $ (33 ) $ (39 ) Unrecognized net loss 5,355 4,337 173 179 Amount capitalized due to actions of regulator 228 — — — Total regulatory assets $ 5,425 $ 4,157 $ 140 $ 140 The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan at September 30, 2015 , and 2014 , were as follows: Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets At September 30 2015 2014 Projected benefit obligation $ 12,824 $ 12,265 Accumulated benefit obligation 12,626 12,039 Fair value of net plan assets 6,797 7,507 The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the years ended September 30, 2015 , and 2014 , were as follows: Components of Net Periodic Benefit Cost For the years ended September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2013 2015 2014 2013 Service cost $ 130 $ 130 $ 154 $ 16 $ 18 $ 24 Interest cost 540 558 468 29 32 31 Expected return on plan assets (437 ) (435 ) (428 ) — — — Amortization of prior service credit (21 ) (21 ) (22 ) (6 ) (6 ) (6 ) Recognized net actuarial loss 299 285 377 9 11 25 Total net periodic benefit cost as actuarially determined 511 517 549 48 55 74 Amount capitalized due to actions of regulator (228 ) — — — — — Total net period benefit cost $ 283 $ 517 $ 549 $ 48 $ 55 $ 74 The amounts in the regulatory asset that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows: Expected Amortization of Regulatory Assets in 2016 At September 30, 2015 Pension Benefits Other Post-Retirement Benefits Total Prior service credit $ (23 ) $ (6 ) $ (29 ) Net actuarial loss 291 8 299 The amount in the pension net component benefit costs expected to be capitalized due to actions of regulator in the next fiscal year is $ 231 million . Plan Assumptions TVA’s reported costs of providing the plan benefits are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various assumptions, the most significant of which are noted below. Actuarial Assumptions At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Assumptions utilized to determine benefit obligations at September 30 Discount rate 4.50 % 4.45 % 4.65 % 4.50 % Rate of compensation increase 5.70 % 5.70 % N/A N/A Initial health care cost trend rate N/A N/A 7.00 % 7.50 % Ultimate health care cost trend rate N/A N/A 5.00 % 5.00 % Ultimate trend rate is reached in year beginning N/A N/A 2019 2019 Assumptions utilized to determine net periodic benefit cost for the years ended September 30 Discount rate 4.45 % 5.00 % 4.50 % 5.05 % Expected return on plan assets 7.00 % 7.25 % N/A N/A Rate of compensation increase 5.70 % 5.72 % N/A N/A Initial health care cost trend rate N/A N/A 7.50 % 8.00 % Ultimate health care cost trend rate N/A N/A 5.00 % 5.00 % Ultimate trend rate is reached in year beginning N/A N/A 2019 2019 Discount Rate. In selecting the assumed discount rate, TVA reviews market yields on high-quality corporate debt and long-term obligations of the U.S. Treasury and endeavors to match, through the use of a hypothetical bond portfolio, instrument maturities with the maturities of its pension obligations in accordance with the prevailing accounting standards. The selected bond portfolio is derived from a universe of high quality corporate bonds of Aa-rated quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan's projected benefit payments discounted at this rate with the market value of the bonds selected. Based on recent market trends and due to the updated mortality assumption resulting in a slightly longer duration of benefits, TVA increased its discount rate used to determine the pension benefit obligation and other post-retirement benefit obligation. At September 30, 2015 , the discount rates used to determine the pension and other post-retirement benefit obligations for 2015 were 4.50 percent and 4.65 percent , respectively. At September 30, 2014 , the discount rates used to determine the pension and other post-retirement benefit obligations were 4.45 percent and 4.50 percent , respectively. The discount rate assumptions used to determine the obligations at year-end are used to determine the net periodic benefit costs for the following year. Rate of Return. The qualified defined benefit pension plan is the only plan that is funded with qualified plan assets. In determining its expected long-term rate of return on pension plan assets, TVA uses a process that incorporates actual historical asset class returns and an assessment of expected future performance and takes into consideration external actuarial advice and asset class factors. Asset allocations are periodically updated using the pension plan asset/liability studies, and are part of the determination of the estimates of long-term rates of return. The current asset allocation policy approved by the TVARS Board diversifies plan assets across multiple asset classes so as to minimize the risk of large losses. The asset allocation policy is designed to be dynamic in nature and responsive to change in the funded status of TVARS. Changes in the expected return rates are based on annual studies performed by third party professional investment consultants. Considering there were no changes to the asset allocation policy and after reviewing the 2015 annual study and the current outlook on capital markets, TVA management decided to maintain the expected return on assets at 7.00 percent , which will be used to measure 2016 net periodic benefit cost. TVA used an expected rate of return of 7.00 percent to measure benefit costs in 2015 and used 7.25 percent to measure benefit costs in 2014 and 2013. Compensation Increases . Assumptions related to compensation increases are based on the results obtained from an actual company experience study performed during the most recent five years for plan participants. TVA obtained an updated study in 2013 and determined that future compensation would likely increase at rates between 3.50 percent and 13.00 percent per year, depending upon the employee's age. Based upon the current active participants, the average assumed compensation increase used to determine benefit obligations for 2015 and 2014 was 5.70 percent . The average assumed compensation increases used to determine net periodic pension benefit costs for 2015 , 2014 , and 2013 were 5.70 percent , 5.72 percent , and 4.44 percent , respectively. Mortality. Mortality assumptions are based upon actuarial projections in combination with actuarial studies of the actual mortality experience of TVA’s pension and post-retirement plan participants. Based upon a review of the 2013 actuarial experience study, TVA adopted the Society of Actuaries ("SOA") RP-2000 base table projected with a modified improvement scale for purposes of measuring its pension and other post-retirement benefits as of September 30, 2013. In 2014, the SOA released a new base table (RP-2014) and improvement scale (MP-2014). However, based upon analysis of the 2014 actuarial experience study, the results indicated that mortality experience remained in line with the assumptions adopted in 2013. Therefore, TVA retained its 2013 mortality assumptions for purposes of measuring its pension and other post-retirement benefit obligations at September 30, 2014. The actuarial experience study was further updated in 2015. Based on analysis of the 2015 study, the 2014 SOA study of mortality tables, and recent additional studies of mortality improvement that was updated by the SOA in October 2015 (MP-2015), TVA has adopted an adjusted version of the SOA’s new RP-2014 mortality tables and a modified MP-2014 improvement scale for purposes of measuring its pension and other post-retirement benefit obligations at September 30, 2015. Health Care Cost Trends. TVA reviews actual recent cost trends and projected future trends in establishing health care cost trend rates. The assumed health care trend rates used to determine post-retirement benefit obligations for 2015 and 2014 were 7.00 percent and 7.50 percent , respectively. The 2015 health care cost trend rate of 7.00 percent used to determine post-retirement benefit obligations is assumed to gradually decrease each successive year until it reaches a 5.00 percent annual increase in health care costs in the years beginning October 1, 2019, and beyond. The assumed health care cost trend rates used to determine the net periodic post-retirement cost were 7.50 percent for 2015 , 8.00 percent for 2014 , and 8.50 percent for 2013 . TVA plans to use 7.00 percent in the determination of 2016 net periodic post-retirement cost. The current trend rate assumption reflects review of TVA medical claims, slight expected increases in premiums for 2016, and more participants moving to the high deductible plan. Cost of Living Adjustment. COLAs are an increase in the benefits for eligible retirees to help maintain the purchasing power of benefits as consumer prices increase. Eligible retirees may receive a COLA on the base pension portion of the monthly pension benefit in January following any year in which the 12-month average CPI-U exceeded by as much as one percent the 12-month average of the CPI-U for the preceding year. The minimum COLA is one percent and the maximum is five percent . Prior to 2013, TVA had maintained a 2.50 percent COLA, but determined that a more accurate estimate would be to lower the COLA for the short-term with a gradual increase that would trend back up to the long-term expectations based upon the economic forecast and the Federal Reserve policy. As of 2015, the economy is recovering more slowly than anticipated, and the Federal Reserve has reaffirmed its intention to keep the target range for the federal funds rate at zero to 0.25 percent . As a result, TVA determined it should decrease the COLA assumption in 2016 to zero percent with an increase to 2.20 percent in 2017, followed by gradual increases in successive years until it reaches the ultimate rate of 2.40 percent in 2021. Sensitivity of Costs to Changes in Assumptions. The following chart reflects the sensitivity of pension cost to changes in certain actuarial assumptions: Sensitivity to Certain Changes in Pension Assumptions At September 30, 2015 Actuarial Assumption Change in Assumption Impact on 2015 Pension Cost Impact on 2015 Projected Benefit Obligation Discount rate (0.25 ) $ 18 $ 404 Rate of return on plan assets (0.25 ) 16 N/A Each fluctuation above assumes that the other components of the calculation are held constant and excludes any impact for unamortized actuarial gains or losses. The following chart reflects the sensitivity of post-retirement benefit cost to changes in the health care trend rate: Sensitivity to Changes in Assumed Health Care Cost Trend Rates At September 30, 2015 1% Increase 1% Decrease Effect on total of service and interest cost components for the year $ 6 $ (6 ) Effect on end-of-year accumulated post-retirement benefit obligation 88 (94 ) Each fluctuation above assumes that the other components of the calculation are held constant and excludes any impact for unamortized actuarial gains or losses. Plan Investments The qualified defined benefit pension plan (the "Plan") , which includes the Original Benefit Structure and the Cash Balance Benefit Structure, is the only plan that includes qualified plan assets. TVARS has a long-term investment plan which contains a dynamic de-risking strategy that allocates investments to assets that better match the liability, such as long duration fixed income securities, over time as funding status targets are met. The investment asset allocation policy approved by the TVARS Board has targets of 47 percent equity including U.S., non-U.S., private, and low volatility global public equity investments, 28 percent fixed income securities, 15 percent public real assets including Treasury Inflation-Protected Securities ("TIPS") , commodities, and Master Limited Partnerships ("MLPs") , and 10 percent private real assets. The qualified pension plan assets are invested across global public equity, private equity, cash, core fixed income, long-term core fixed income, investment grade credit, high yield fixed income, emerging markets fixed income, global TIPS, commodities, MLPs, and private real assets. The TVARS asset allocation policy includes permissible deviations from these target allocations. The TVARS Board can take action, as appropriate, to rebalance the system’s assets consistent with the asset allocation policy. At September 30, 2015 and 2014 , the asset holdings of the system included the following: Asset Holdings of TVARS At September 30 Plan Assets at September 30 Asset Category Target Allocation 2015 2014 Global equity 32 % 38 % 43 % Private equity 10 % 5 % 5 % Low volatility global public equity 5 % 5 % 1 % Cash 2 % 2 % 2 % Core fixed income 5 % 5 % 5 % Long-term core fixed income 5 % 5 % 5 % Investment grade credit 6 % 6 % 6 % International emerging markets fixed income 5 % 5 % 5 % High yield fixed income 5 % 6 % 6 % Global TIPS 5 % 6 % 5 % Private real assets 10 % 9 % 7 % Commodities 5 % 4 % 4 % MLPs 5 % 4 % 6 % Total 100 % 100 % 100 % Fair Value Measurements The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2015 : TVA Retirement System At September 30, 2015 Total (1) (2) Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Equity securities $ 1,650 $ 1,649 $ — $ 1 Preferred securities 36 2 34 — Debt securities Corporate debt securities 1,161 — 1,149 12 Residential mortgage-backed securities 151 — 138 13 Debt securities issued by U.S. Treasury 362 362 — — Debt securities issued by foreign governments 294 — 281 13 Asset-backed securities 156 — 116 40 Debt securities issued by state/local governments 25 — 25 — Commercial mortgage-backed securities 43 — 32 11 Commingled Funds measured at net asset value (3) Equity 642 — — — Debt 654 — — — Commodity 244 — — — Blended 206 — — — Institutional mutual funds 26 26 — — Cash equivalents and other short-term investments 318 — 318 — Certificates of deposit 6 — 6 — Private equity measured at net asset value (3) 389 — — — Private real estate measured at net asset value (3) 556 — — — Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral 34 21 13 — Securities lending commingled funds 3 — 3 — Derivatives Purchased options 2 — 1 1 Foreign currency forward receivable 6 — 6 — Total Assets $ 6,964 $ 2,060 $ 2,122 $ 91 Liabilities Futures 17 $ 17 $ — $ — Foreign currency forward payable 4 — 4 — Written options 2 — 2 — Interest rate swaps 10 — 10 — Credit default swaps 1 — 1 — Total Liabilities $ 34 $ 17 $ 17 $ — Notes (1) Excludes approximately $ 130 million in net payables associated with security purchases and sales and various other payables. (2) Excludes a $ 3 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. (3) In accordance with Accounting Standards Codification Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2014 : TVA Retirement System At September 30, 2014 Total (1) (2) Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Equity securities $ 1,669 $ 1,668 $ — $ 1 Preferred securities 37 5 32 — Debt securities Corporate debt securities 1,326 — 1,304 22 Residential mortgage-backed securities 204 — 201 3 Debt securities issued by U.S. Treasury 93 93 — — Debt securities issued by foreign governments 225 — 218 7 Asset-backed securities 176 — 147 29 Debt securities issued by state/local governments 30 — 29 1 Commercial mortgage-backed securities 23 — 20 3 Commingled funds measured at net asset value (3) Equity 1,106 — — — Debt 661 — — — Commodities 332 — — — Blended 228 — — — Institutional mutual funds 28 28 — — Cash equivalents and other short-term investments 464 — 464 — Certificates of deposit 19 — 19 — Private equity measured at net asset value (3) 481 — — — Private real estate measured at net asset value (3) 435 — — — Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral 35 10 25 — Securities lending commingled funds 2 — 2 — Derivatives Purchased options 18 — 18 — Foreign currency forward receivable 8 — 8 — Total Assets $ 7,600 $ 1,804 $ 2,487 $ 66 Liabilities Futures 11 $ 11 $ — $ — Foreign currency forward payable 8 — 8 — Written options 7 — 7 — Total Liabilities $ 26 $ 11 $ 15 $ — Notes (1) Excludes approximately $ 65 million in net payables associated with security purchases and sales and various other payables. (2) Excludes a $ 2 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. (3) In accordance with Accounting Standards Codification Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The following table provides a reconciliation of beginning and ending balances of pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3): Fair Value Measurements Using Significant Unobservable Inputs Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Balance at October 1, 2013 $ 42 Net realized/unrealized gains (losses) 3 Purchases, sales, issuances, and settlements (net) 26 Transfers in and/or out of Level 3 (5 ) Balance at September 30, 2014 66 Net realized/unrealized gains (losses) (2 ) Purchases, sales, issuances, and settlements (net) 33 Transfers in and/or out of Level 3 (6 ) Balance at September 30, 2015 $ 91 The following descriptions of the valuation methods and assumptions used by the Plan to estimate the fair value of investments apply to investments held directly by the Plan. Third-party pricing vendors provide valuations for investments held by the Plan in most instances, except for commingled, private equity, and private real estate fun |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments At September 30, 2015 , the amounts of contractual cash commitments maturing in each of the next five years and beyond are shown below: Commitments and Contingencies Payments due in the years ending September 30 2016 2017 2018 2019 2020 Thereafter Total Membership interests of variable interest entity subject to mandatory redemption 2 2 2 2 3 26 37 Lease obligations Capital 13 13 13 12 12 156 219 Non-cancelable operating 44 42 32 25 25 38 206 Purchase obligations Power 217 226 229 235 241 3,124 4,272 Fuel 1,282 711 635 508 335 1,448 4,919 Other 262 198 193 189 173 1,830 2,845 Unfunded loan commitments 5 — — — — — 5 Payments on other financings 104 104 104 96 73 232 713 Total $ 1,929 $ 1,296 $ 1,208 $ 1,067 $ 862 $ 6,854 $ 13,216 In addition to the cash requirements, above, TVA has contractual obligations in the form of revenue discounts related to energy prepayments. See Note 1 — Energy Prepayment Obligations. Energy Prepayment Obligations Payments due in the years ending September 30 2016 2017 2018 2019 2020 Thereafter Total Energy Prepayment Obligations $ 100 $ 100 $ 100 $ 10 $ — $ — $ 310 Membership Interests of VIE Subject to Mandatory Redemption . At September 30, 2015 , TVA had outstanding membership interests subject to mandatory redemption (including current portion) of $ 37 million issued by one of its VIEs of which it is the primary beneficiary. See Note 10 . Leases . TVA leases certain property, plant, and equipment under agreements with terms ranging from one to 38 years. Of the total obligations for TVA’s capital leases, $ 115 million represents the cost of financing. TVA’s rental expense for operating leases was $ 79 million in 2015 , $ 75 million in 2014 , and $ 71 million in 2013 . Power Purchase Obligations. TVA has contracted with various independent power producers and LPCs for additional capability to be made available to TVA. Several of these agreements have contractual minimum payments. In total, these agreements provide 1,255 MW of summer net capability. The remaining terms of the agreements range up to 17 years . TVA incurred $ 230 million , $ 237 million , and $ 267 million of expense under power purchase agreements during 2015 , 2014 , and 2013 , respectively. Certain power purchase obligations are accounted for as capital leases. Costs under TVA’s power purchase agreements not accounted for as capital leases are included in TVA's consolidated statements of operations as purchased power expense and are expensed as incurred. Under federal law, TVA is obligated to purchase power from qualifying facilities, cogenerators, and small power producers. As of September 30, 2015 , there was a combined qualifying capacity of 882 MW from twenty-four different suppliers, from which TVA purchased power under this law. TVA’s obligations to purchase power from these qualifying facilities are not included in the Commitments and Contingencies table. TVA, along with others, contracted with the Southeastern Power Administration ("SEPA") to obtain power and energy from eight U.S. Army Corps of Engineers hydroelectric facilities on the Cumberland River system. The agreement with SEPA can be terminated upon three years’ notice, but this notice of termination may not become effective prior to June 30, 2017. The contract requires SEPA to provide TVA an annual minimum of 1,500 hours of energy for each megawatt of TVA’s 405 MW allocation, and all surplus energy from the Cumberland River system. TVA’s obligations under its contract with SEPA are not included in the Commitments and Contingencies table. Fuel Purchase Obligations. TVA has approximately $ 1.5 billion in long-term fuel purchase commitments ranging in terms of up to 5 years primarily for the purchase and transportation of coal. TVA also has approximately $ 3.4 billion of long-term commitments ranging in terms of up to 15 years for the purchase of enriched uranium and fabrication of nuclear fuel assemblies. Other Obligations. Other obligations of $ 2.8 billion consist of contracts at September 30, 2015 , for goods and services primarily related to capital projects as well as other major recurring operating costs. Leasebacks . At September 30, 2015 , and September 30, 2014 , the outstanding leasback obligations related to CTs and QTE were $616 million and $691 million , respectively. See Note 14 — Lease/Leasebacks . 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 102 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. These potential liabilities will increase to $ 133 million per year and a total of $ 891 million per nuclear incident once Watts Bar Unit 2 becomes operational. 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 $ 5.1 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 $ 127 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 $ 36 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 Decommissioning . Provision for decommissioning costs of nuclear generating units is based on options prescribed by the NRC procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At September 30, 2015 , the present value of the estimated future decommissioning cost of $2.2 billion was included in AROs. The actual decommissioning costs may vary from the derived estimates because of, among other things, 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. Utilities that own and operate nuclear plants are required to use different procedures in calculating nuclear decommissioning costs under GAAP than those that are used in calculating nuclear decommissioning costs when reporting to the NRC. The two sets of procedures produce different estimates for the costs of decommissioning primarily because of the difference in the discount rates used to calculate the present value of decommissioning costs. TVA maintains a NDT to provide funding for the ultimate decommissioning of its nuclear power plants. 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 operating nuclear power units are licensed through 2033 - 2041, depending on the unit. It may be possible to extend the operating life of some of the units with approval from the NRC. The balance in the NDT was $ 1.5 billion at September 30, 2015 . See Note 9 — Nuclear Decommissioning Costs and Note 13 . Non-Nuclear Decommissioning . The present value of the estimated future non-nuclear decommissioning cost ARO was $1.7 billion at September 30, 2015 . 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 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. The balance in the ART was $ 435 million at September 30, 2015 . See Note 9 — Non-Nuclear Decommissioning Costs and Note 13 . 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 virtually certain 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 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 . From the 1970s to 2015 , TVA spent approximately $ 6.2 billion to reduce emissions from its power plants, including $ 315 million , $ 378 million , and $ 197 million in 2015 , 2014 , and 2013 , respectively, on clean air controls. TVA estimates that compliance with future Clean Air Act ("CAA") requirements (excluding greenhouse gas ("GHG") requirements) could lead to additional costs of $ 750 million from 2016 to 2025 for additional clean air controls. 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 ("CERCLA") , 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 is aware of alleged hazardous-substance releases at certain non-TVA areas in connection with which other potentially responsible parties may seek monetary damages from TVA. There is information indicating that TVA sent a small amount of equipment to Ward Transformer (“Ward”), a non-TVA site in Raleigh, North Carolina. The site is contaminated by PCBs from electrical equipment due to Ward’s practice of draining such equipment. A working group of potentially responsible parties is cleaning up on-site contamination in accordance with an agreement with the EPA. The cleanup effort has been divided into multiple phases, including on-site and downstream cleanup activities, two phases of soil cleanup, supplemental groundwater remediation, and cleanup of off-site contamination in the downstream drainage basin. TVA settled its potential liability for the on-site removal action for $ 300 thousand and has agreed to pay approximately $ 8 thousand to settle its potential liability in connection with an EPA study of the site. TVA believes that its liability for the remaining cleanup activities as well as any natural resource damages will be less than $ 1 million . TVA operations at some TVA facilities have resulted in contamination, including coal ash, that TVA is addressing. At September 30, 2015 and 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 (primarily the TVA sites) was approximately $23 million and $ 15 million , respectively, on a non-discounted basis, and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. 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 September 30, 2015 , TVA had accrued $ 115 million of probable losses with respect to Legal Proceedings. Of the accrued amount, $ 55 million is included in Other long-term liabilities and $ 60 million is included in Accounts payable and accrued liabilities. 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, one with the EPA and the other with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups: the Sierra Club, the 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 SO 2 and NO x , (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 past claims against TVA based on alleged New Source Review and associated violations were waived and cannot be brought against TVA. Future claims including those 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 September 30, 2015 Consolidated Balance Sheet. In conjunction with the approval of the Environmental Agreements, the TVA Board determined that it was appropriate to record TVA's obligations under the Environmental Agreements as regulatory assets, and they are included as such on the September 30, 2015 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 CAA permit is expected to be narrowed in scope or terminated since TVA has now retired all four of the John Sevier coal-fired units. 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. Fifteen of these lawsuits were dismissed. 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 deposited $ 28 million with the court, which is responsible for disbursing 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 was set aside under the order to cover the anticipated costs of resolving these claims. Claims of seven of the nine plaintiffs have been resolved. In April 2015, the court dismissed the claims of the remaining two plaintiffs, and these plaintiffs did not appeal the dismissal of their claims. 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 paid TDEC the small remaining difference rather than do more projects. In addition, TVA paid $ 750 thousand over three years into the Natural Resource Restoration Fund associated with the Kingston spill. In July 2015, TDEC, TVA and the United States Department of the Interior entered into an administrative order on consent which determined that TVA’s restoration activities were the appropriate measures to remedy any natural resource damages and released TVA from any claims for such damages. 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 challenging the TVARS Board's 2009 decision to make changes to the TVARS Rules and Regulations (“Rules”) in exchange for a $1 billion contribution from TVA. The changes approved by the TVARS Board (1) suspended the TVA contribution requirements for 2010 through 2013, (2) reduced the calculation for COLA benefits for CY 2010 through CY 2013, (3) reduced the interest crediting rate for the fixed fund accounts, and (4) increased the eligibility age to receive COLAs from age 55 to 60 . The plaintiffs alleged that these changes violated their constitutional rights (due process, equal protection, and property rights), violated the Administrative Procedure Act, and breached statutory duties owed to the plaintiffs. TVA and plaintiffs filed cross motions for summary judgment. In August 2015, the court granted TVA’s motion for summary judgment and dismissed the case with prejudice. In September 2015, the plaintiffs appealed this decision to the United States Court of Appeals for the Sixth Circuit (the "Sixth Circuit"). Cases Involving Gallatin Fossil Plant CCR Facilities. In January 2015, the State of Tennessee filed a lawsuit against TVA in the Chancery Court for Davidson County, Tennessee. The lawsuit alleges that waste materials have been released into waters of the state from coal combustion residual ("CCR") facilities at Gallatin Fossil Plant ("Gallatin") in violation of the Tennessee Water Quality Control Act and the Tennessee Solid Waste Disposal Act. TDEC is seeking injunctive relief as well as civil penalties of up to $17,000 per day for each day TVA is found to have violated the statutes. In February 2015, the court issued an order allowing the Tennessee Scenic Rivers Association ("TSRA") and the Tennessee Clean Water Network ("TCWN") to intervene in the case. In April 2015, TSRA and TCWN filed a lawsuit against TVA in the United States District Court for the Middle District of Tennessee alleging that waste materials have been released into the Cumberland River from CCR facilities at Gallatin in violation of the Clean Water Act. The plaintiffs are seeking injunctive relief and civil penalties of up to $37,500 per violation per day. 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 is a generic determination by the NRC that spent nuclear fuel can be safely managed until a permanent off-site repository is established; this determination has been a key component of the NRC licensing activities since 1984. In August 2014, the NRC issued its final rule on continued storage of spent nuclear fuel (the "Continued Storage Rule"), which replaced the WCD. Several petitions for review were filed in October 2014 in the D.C. Circuit challenging the Continued Storage Rule. 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 Units 1 and 2. The petition contained 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 ASLB opposing the admission of all eight of the petitioners' contentions. In July 2013, the ASLB concluded that BREDL was the only one of the three petitioners that had 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. In September 2014, the ASLB denied BREDL's contention related to the WCD. In March 2015, the ASLB issued an order terminating the administrative proceeding. In April 2015, BREDL filed motions with the NRC to reopen the record and to admit a new contention arguing that the environmental impact statement for Sequoyah must incorporate by reference the generic environmental impact statement released in connection with the Continued Storage Rule. The NRC rejected these motions in June 2015. In August 2015, BREDL asked the D.C. Circuit to review the NRC's decision after the court issues a decision on BREDL's petition for review challenging the Continued Storage Rule. The NRC issued the license renewal of the facility operating licenses for both units, effective on September 28, 2015. Administrative Proceedings Regarding Bellefonte Units 3 and 4 . TVA submitted its combined construction and operating license ("COL") 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 COL 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 COL. In April 2012, the ASLB issued an order maintaining the proceeding in "active" status, but amending the disclosure schedule. 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. In September 2014, the ASLB denied BREDL’s request to file the new contention. Following the publication of the Continued Storage Rule, BREDL filed a petition with the NRC seeking suspension of the issuance of a final decision in the Bellefonte Units 3 and 4 proceeding and a motion with the ASLB seeking leave to file a new, late-filed contention stemming from the Continued Storage Rule. The NRC rejected this petition in February 2015. See Case Involving the NRC Waste Confidence Decision on Spent Nuclear Fuel Storage above. Administrative Proceedings Regarding Watts Bar Unit 2 . In July 2012, SACE petitioned for the admission of a 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. In September 2014, the ASLB denied SACE’s request to file the contention related to the WCD and terminated the proceeding. Following the publication of the Continued Storage Rule, SACE filed a petition with the NRC seeking suspension of the issuance of a final decision in the Watts Bar Unit 2 proceeding and motions with the ASLB to reopen the record and for leave to file a new, late-filed contention stemming from the Continued Storage Rule. The NRC rejected this petition in February 2015. In addition, in February 2015, SACE filed motions with the NRC to reopen the record and to admit a new contention relating to the expedited seismic evaluation process report for Watts Bar that TVA filed with the NRC in December 2014 as part of the Fukushima lessons-learned review process. These motions were denied in April 2015, and SACE appealed this decision to the NRC in May 2015. The NRC denied this appeal in September 2015. In April 2015, SACE filed motions with the NRC to reopen the record and to admit a new contention arguing that the environmental impact statement for Watts Bar Unit 2 must incorporate by reference the generic environmental impact statement released in connection with the Continued Storage Rule. The NRC rejected these motions in June 2015. The proceeding remains closed. The NRC issued the operating license for Watts Bar Unit 2 in October 2015. 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 SO 2 and NO x . The CAA permit, issued by TDEC, remains in effect pending the disposition of the petition. TVA has now retired all four John Sevier coal-fired units, and this challenge likely will not proceed. National Environmental Policy Act Challenge at Paradise Fossil Plant . To comply with the EPA’s Mercury and Air Toxics Standards, TVA chose to retire two coal-fired units at Paradise Fossil Plant and replace them with natural gas generation. Prior to making this decision, TVA completed an Environmental Assessment in November 2013 under NEPA. In July 2014, the Kentucky Coal Association and several individuals filed suit in the United States District Court for the Western District of Kentucky alleging that TVA violated NEPA and the Energy Policy Act of 1992 in deciding to switch to natural gas generation. The plaintiffs demand that TVA prepare an Environmental Impact Statement, and are asking the court to preliminarily enjoin TVA from taking any further action relating to these matters pending compliance with NEPA. The court denied the plaintiffs' motion for a preliminary injunction in December 2014 and dismissed the case in February 2015. In March 2015, the plaintiffs appealed the court's decision to the United States Court of Appeal for the Sixth Circuit, and in October 2015, the Sixth Circuit affirmed the court's decision. 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 proceedings have been stayed at the request of the parties until December 21, 2015. Bull Run Fossil Plant NPDES Permit Administrative Appeal. SACE and the 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. In December 2013, TCWN and SACE filed a petition for review of the TN Board's decision in the Chancery Court for Davidson County, Tennessee. In March 2015, the court issued a final order affirming the TN Board's decision, and the petitioners subsequently appealed the court's decision to the Tennessee Court of Appeals. 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 plaintiffs voluntarily dismissed this case in February 2015. 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 plaintiffs voluntarily dismissed this case in February 2015. Gallatin Fossil Plant NPDES Permit Administrative Appeal . SACE, TCWN, and the Sierra Club filed a challenge to the NPDES permit for Gallatin in June 2012. TDEC is the defendant in the challenge. TVA's motion to intervene was granted in September 2012. Following discovery, SACE, TCWN, and the Sierra Club voluntarily dismissed seven of the eight claims asserted in their petition. TVA moved to dismiss the remaining claim, and the ALJ assigned to the matter granted TVA’s motion and dismissed the case. On November 7, 2014, SACE, TWCN, and the Sierra Club filed a petition for review of the ALJ's dismissal in the Chancery Court for Davidson County, Tennessee. In February 2015, the court issued a final order affirming that the Gallatin NPDES permit was lawfully issued. In M |
Related Parties
Related Parties | 12 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties TVA is a wholly-owned corporate agency of the federal government, and because of this relationship, TVA’s revenues and expenses are included as part of the federal budget as a revolving fund. TVA’s purpose and responsibilities as an agency are described under the “Other Agencies” section of the federal budget. TVA currently receives no appropriations from Congress and funds its business using power system revenues, power financings, and other revenues. TVA is a source of cash to the federal government. With its payment of $ 10 million during 2014, TVA fulfilled its requirement to repay $ 1.0 billion of its Power Program Appropriation Investment. TVA will continue to pay a return on the outstanding balance of this investment indefinitely. See Note 18 — Appropriation Investment. TVA also has access to a financing arrangement with the U.S. Treasury pursuant to the TVA Act. TVA and the U.S. Treasury 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 and has a maturity date of September 30, 2016. Access to this credit facility or other similar financing arrangements has been available to TVA since the 1960s. See Note 14 — Credit Facility Agreements. In the normal course of business, TVA contracts with other federal agencies for sales of electricity and other services. Transactions with agencies of the federal government were as follows: Related Party Transactions For the years ended, or at, September 30 2015 2014 2013 Revenue from sales of electricity $ 130 $ 128 $ 120 Other income 115 120 84 Judgment settlement 52 17 18 Expenditures Operating expenses 227 267 299 Additions to property, plant, and equipment 37 19 15 Cash and cash equivalents 45 35 38 Accounts receivable, net 106 85 58 Accounts payable and accrued liabilities 98 146 133 Long-term power bonds, net 5 3 — Return on Power Program Appropriation Investment 5 4 7 Return of Power Program Appropriation Investment — 10 20 |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | Unaudited Quarterly Financial Information A summary of the unaudited quarterly results of operations for the years 2015 and 2014 follows. This summary should be read in conjunction with the audited consolidated financial statements appearing herein. Results for interim periods may fluctuate as a result of seasonal weather conditions, changes in rates, and other factors. Unaudited Quarterly Financial Information 2015 First Second Third Fourth Total Operating revenues $ 2,411 $ 2,863 $ 2,558 $ 3,171 $ 11,003 Operating expenses 2,047 2,087 2,252 2,402 8,788 Operating income 364 776 306 769 2,215 Net income (loss) 81 496 32 502 1,111 Unaudited Quarterly Financial Information 2014 First Second Third Fourth Total Operating revenues $ 2,382 $ 2,938 $ 2,651 $ 3,166 $ 11,137 Operating expenses 2,164 2,362 2,453 2,569 9,548 Operating income 218 576 198 597 1,589 Net income (loss) (67 ) 295 (81 ) 322 469 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
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 and public lands to provide recreational opportunities, adequate water supply, improved water quality, cultural and 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 United States Department of the Treasury ("U.S. Treasury") 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 (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. TVA fulfilled its requirement to repay $ 1.0 billion of the Power Program Appropriation Investment in 2014. |
Fiscal Year | Fiscal Year TVA's fiscal year ends September 30. Years ( 2015 , 2014 , 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. Based on current projections, 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 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. All 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 The accompanying consolidated financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA and three variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 10 . 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 considered 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 historical amounts have been reclassified in the Consolidated Statements of Cash Flows to conform to the current year presentation. Amounts previously presented in Cash flows from operating activities as Environmental cleanup costs - Kingston ash spill - non cash of $ 68 million and $ 72 million and Environmental cleanup costs – Kingston ash spill of $ (109) million and $ (99) million for the years ended September 30, 2014 and 2013 , respectively, are currently reported in Other, net. |
Cash and Cash Equivalents and Restricted Cash and Investments | Cash and Cash Equivalents Cash includes cash on hand and non-interest bearing cash and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Restricted Cash and Investments Restricted cash and investments reflect amounts related to collateral posted with TVA by a swap counterparty. |
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 September 30, 2015 , and 2014 , for accounts receivable. Additionally, loans receivable of $ 129 million and $ 92 million at September 30, 2015 , and 2014 , respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively, and reported net of allowances for uncollectible accounts of $8 million and $ 9 million at September 30, 2015 , and 2014 , respectively. |
Revenues | Energy Prepayment Obligations In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW") , entered into an energy prepayment agreement under which MLGW prepaid TVA $ 1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 180 months . TVA accounted for the prepayment as unearned revenue and is reporting the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2015 and 2014 Consolidated Balance Sheets. TVA expects to recognize approximately $ 100 million of noncash revenue in each year of the arrangement as electricity is delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. At September 30, 2015 , approximately $ 1.2 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $ 100 million of which was recognized as noncash revenue during each of 2015 , 2014 , and 2013 . Discounts, which are recorded as a reduction to electricity sales, amounted to $ 46 million for each of the years ended September 30, 2015 , 2014 , and 2013 . Revenues Revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to six customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying consolidated statements of operations as a component of Sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. (Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve.) From time to time TVA transfers fiber optic capacity on TVA’s network to telecommunications service carriers and local power company customers of TVA ("LPCs") . These transactions are structured as indefeasible rights of use ("IRUs") , which are the exclusive right to use a specified amount of fiber optic capacity for a specified term. TVA accounts for the consideration received on transfers of fiber optic capacity for cash and on all of the other elements deliverable under an IRU as revenue ratably over the term of the agreement. TVA does not recognize revenue on any contemporaneous exchanges of its fiber optic capacity for an IRU of fiber optic capacity of the counterparty to the exchange. TVA engages in a wide array of arrangements in addition to power sales. TVA records revenue when it is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price or fee is fixed or determinable; and collectability is reasonably assured. Revenues from activities related to TVA’s overall mission are recorded as other operating revenue versus those that are not related to the overall mission, which are recorded in Other income (expense), net. |
Inventories | Inventories Certain Fuel, Materials, and Supplies . Materials and supplies inventories are valued using an average unit cost method. A new average cost is computed after each inventory purchase transaction, and inventory issuances are priced at the latest moving weighted average unit cost. Coal, fuel oil, and natural gas inventories are valued using an average cost method. A new weighted average cost is computed monthly, and monthly issues are priced accordingly. Allowance for Inventory Obsolescence . TVA reviews material and supplies inventories by category and usage on a periodic basis. Each category is assigned a probability of becoming obsolete based on the type of material and historical usage data. Based on the estimated value of the inventory, TVA adjusts its allowance for inventory obsolescence. Emission Allowances . TVA has emission allowances for sulfur dioxide ("SO 2 ") and nitrogen oxides ("NO x ") which are accounted for as inventory. The average cost of allowances used each month is charged to operating expense based on tons of SO 2 and NO x emitted during the respective compliance periods. Allowances granted to TVA by the Environmental Protection Agency ("EPA") are recorded at zero cost. |
Property, Plant, and Equipment, and Depreciation | Property, Plant, and Equipment, and Depreciation Property, Plant, and Equipment. Additions to plant are recorded at cost, which includes direct and indirect costs and may include an allowance for funds used during construction ("AFUDC") , if eligible. The cost of current repairs and minor replacements is charged to operating expense. Nuclear fuel inventories, which are included in Property, plant, and equipment, are valued using the average cost method for raw materials and the specific identification method for nuclear fuel in a reactor. Amortization of nuclear fuel in a reactor is calculated on a units-of-production basis and is included in fuel expense. Depreciation. TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Accordingly, the original cost of property retired is charged to accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. Depreciation expense for the years ended September 30, 2015 , 2014 , and 2013 was $ 1.7 billion , $ 1.6 billion , and $ 1.4 billion , respectively. Depreciation expense expressed as a percentage of the average annual depreciable completed plant was 3.71 percent for 2015 , 3.42 percent for 2014 , and 3.12 percent for 2013 . Average depreciation rates by asset class are as follows: Property, Plant, and Equipment Depreciation Rates At September 30 (percent) 2015 2014 2013 Asset Class Nuclear 2.81 2.90 2.86 Coal-fired 5.50 4.37 3.47 Hydroelectric 1.30 1.44 1.30 Gas and oil-fired 3.18 3.23 3.21 Transmission 2.78 2.76 2.76 Other 8.65 8.40 8.14 In April 2011, TVA entered into two substantively similar agreements, one with the EPA and the other with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups (collectively, the "Environmental Agreements”). See Note 22 — Legal Proceedings — Environmental Agreements . Under the Environmental Agreements, TVA committed, among other things, to retire, on a phased schedule, 18 coal-fired units. Consistent with the Environmental Agreements, Units 1 and 2 at John Sevier Fossil Plant ("John Sevier") were retired on December 31, 2012, and Units 3 and 4 were idled on December 31, 2012 and subsequently retired on June 25, 2014. Units 3 and 5 at Widows Creek Fossil Plant ("Widows Creek") were retired on July 31, 2013, and Units 1, 2, 4, and 6 at Widows Creek were retired on July 31, 2014. On October 1, 2013, Colbert Fossil Plant ("Colbert") Unit 5 and Johnsonville Fossil Plant ("Johnsonville") Units 5, 6, 9, and 10 were idled. In addition, Units 7 and 8 at Johnsonville were idled on March 1, 2012, and Unit 10 at Shawnee Fossil Plant ("Shawnee") was idled in October 2010 and subsequently retired on June 30, 2014. On November 14, 2013, the TVA Board of Directors (the "TVA Board") approved the retirement of Colbert Units 1-5 no later than June 30, 2016, and the retirement of Widows Creek Unit 8. Additionally, the TVA Board approved the retirement of Paradise Fossil Plant ("Paradise") Units 1 and 2 upon the completion of a natural gas-fired plant at the Paradise location. On August 21, 2014, the TVA Board approved the retirement of Allen Fossil Plant ("Allen") Units 1-3 upon the completion of a natural gas-fired plant at the Allen location, but no later than December 31, 2018. On May 7, 2015, the TVA Board approved the retirement of Widows Creek Unit 7 no later than October 31, 2015, and Johnsonville Units 1-4 by December 31, 2017. TVA retired Widows Creek Units 7 and 8 on September 30, 2015. Depreciation rates are adjusted to reflect current assumptions so that the units will be fully depreciated by the applicable idle dates. As a result of TVA's decision to idle or retire units, TVA recognized $ 383 million , $ 206 million , and $ 49 million in accelerated depreciation expense related to the units during the years ended September 30, 2015 , 2014 , and 2013 , respectively. Capital Lease Agreements. Property, plant, and equipment also includes assets recorded under capital lease agreements. These primarily consist of a natural gas lateral pipeline, power production facilities, water treatment assets, and land of $ 94 million and $ 102 million at September 30, 2015 and 2014 , respectively. Amortization expense related to capital leases is included in Depreciation and amortization in TVA’s statements of operations. Allowance for Funds Used During Construction. AFUDC capitalized during the year ended September 30, 2015 , was $ 214 million , as compared to $ 175 million capitalized during the year ended September 30, 2014 . TVA may capitalize interest on eligible projects as AFUDC, based on the average interest rate of TVA’s outstanding debt. The allowance is applicable to construction in progress related to eligible projects with (1) an expected total project cost of $ 1.0 billion or more, and (2) an estimated construction period of at least three years in duration. During 2015, the TVA Board approved that AFUDC will only be applied to the Watts Bar Unit 2 completion project during 2016. The accumulated balance of costs, which is used to calculate AFUDC, averaged approximately $ 4.1 billion for the year ended September 30, 2015 . Subsequent to August 31, 2013, the accumulated balance of costs for Bellefonte Nuclear Plant ("Bellefonte") was removed from this calculation. Software Costs. TVA capitalizes certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in Property, plant, and equipment on the consolidated balance sheets and are amortized primarily over five years . At September 30, 2015 and 2014 , unamortized computer software costs totaled $ 18 million and $ 22 million , respectively. Amortization expense related to capitalized computer software costs was $ 38 million , $31 million , and $31 million for 2015 , 2014 , and 2013 , respectively. Software costs that do not meet capitalization criteria are expensed as incurred. Impairment of Assets. TVA evaluates long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. For long-lived assets, TVA bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, TVA determines whether an impairment has occurred based on an estimate of undiscounted cash flows attributable to the asset as compared with the carrying value of the asset. If an impairment has occurred, the amount of the impairment recognized is measured as the excess of the asset’s carrying value over its fair value. Additionally, TVA regularly evaluates construction projects. If the project is canceled or deemed to have no future economic benefit, the project is written off as an asset impairment or, upon Board approval, reclassified as a regulatory asset. |
Decommissioning Costs | Decommissioning Costs TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear 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 restoration. 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 9 — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 13 . 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 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 | Blended Low-Enriched Uranium Program Under the blended low-enriched uranium ("BLEU") program, TVA, the U.S. 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 $ 162 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 September 30, 2015 , TVA had paid out approximately $ 131 million for this program, and the obligation recorded was $ 12 million . |
Investment Funds | Investment Funds Investment funds consist primarily of trust funds designated to fund decommissioning requirements (see Note 22 — Contingencies — Decommissioning Costs ), the Supplemental Executive Retirement Plan ("SERP") (see Note 21 — Overview of Plans and Benefits — Supplemental Executive Retirement Plan ), and the Long-Term Deferred Compensation Plan ("LTDCP") . The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds for the costs related to the future closure and retirement of TVA's other long-lived assets. NDT and SERP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity market performance, while ART and LTDCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt market performance. The NDT funds, ART funds, SERP funds, and LTDCP funds are all classified as trading. |
Insurance | Insurance Although TVA uses private companies to administer its healthcare plans for eligible active and retired employees not covered by Medicare, TVA does not purchase health insurance. Third-party actuarial specialists assist TVA in determining certain liabilities for self-insured claims. TVA recovers the costs of claims through power rates and through adjustments to the participants’ contributions to their benefit plans. These liabilities are included in Other liabilities on the balance sheets. TVA sponsors an Owner Controlled Insurance Program which provides workers' compensation and liability insurance for a select group of contractors performing maintenance, modifications, outage, and new construction activities at TVA facilities. The Federal Employees' Compensation Act ("FECA") governs liability to employees for service-connected injuries. TVA purchases excess workers' compensation insurance above a self-insured retention. In addition to excess workers' compensation insurance, TVA purchases the following types of insurance: • Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See Note 22 — Contingencies — Nuclear Insurance . • Excess liability insurance for aviation, auto, marine, and general liability exposures. • Property insurance for certain conventional (non-nuclear) assets. The insurance policies are subject to the terms and conditions of the specific policy, including deductibles or self-insured retentions. To the extent insurance would not provide either a partial or total recovery of the costs associated with a loss, TVA would have to recover any such costs through other means, including through power rates. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed when incurred. TVA’s research programs include those related to power delivery technologies, emerging technologies (clean energy, renewables, distributed resources, and energy efficiency), technologies related to generation (fossil fuel, nuclear, and hydroelectric), and environmental technologies. |
Tax Equivalents | Tax Equivalents The TVA Act requires TVA to make payments to states and counties in which TVA conducts its power operations and in which TVA has acquired power properties previously subject to state and local taxation. The total amount of these payments is five percent of gross revenues from sales of power during the preceding year, excluding sales or deliveries to other federal agencies and off-system sales with other utilities, with a provision for minimum payments under certain circumstances. TVA calculates tax equivalent expense by subtracting the prior year fuel cost-related tax equivalent regulatory asset or liability from the payments made to the states and counties and adding back the current year fuel cost-related tax equivalent regulatory asset or liability. Fuel cost-related tax equivalent expense is recognized in the same accounting period in which the fuel cost-related revenue is recognized. |
Maintenance Costs | Maintenance Costs TVA records maintenance costs and repairs related to its property, plant, and equipment in the statements of operations as they are incurred except for the recording of certain regulatory assets for retirement and removal costs. |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Variable Interest Entity Policy | Variable Interest Entities A VIE is an entity that either (1) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (2) 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 VIE, 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") . Southaven Holdco LLC ("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 a schedule of amortizing, semi-annual payments due each February 15 and August 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 and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is 7.0 percent , which is reflected as interest expense in the consolidated statements of operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC ("SSSL") on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively. 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 the Seven States Return. 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. In the event that TVA were to choose to exercise an early buy out feature of the Southaven Facility Lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven Facility Lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA. 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 is 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 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 each 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 Spi33
Kingston Fossil Plant Ash Spill Kingston Fossil Plant Ash Spill (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Environmental Remediation Obligations [Abstract] | |
Kingston Fossil Plant Ash Spill Policy | Financial Impact 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 of September 30, 2015, TVA had spent $ 1.1 billion related to the ash spill. The remaining estimated liability at September 30, 2015 was $ 6 million and is included in Accounts payable and accrued liabilities. |
Asset Retirement Obligations As
Asset Retirement Obligations Asset Retirement Obligations (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations, Policy [Policy Text Block] | Decommissioning Costs TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to fossil fuel-fired generating plants, nuclear 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 restoration. 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 9 — Nuclear Decommissioning Costs and Non-Nuclear Decommissioning Costs and Note 13 . 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 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 . |
Benefit Plans Benefit Plans (Po
Benefit Plans Benefit Plans (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Accounting Mechanisms Regulatory Accounting. TVA has classified all amounts related to unrecognized prior service costs, net actuarial gains or losses, and the funded status as regulatory assets as such amounts are probable of collection in future rates. On October 1, 2014, TVA began recognizing pension costs as regulatory assets to the extent that the amount calculated under GAAP as pension expense differs from the amount TVA contributes to the pension plan. Cost Method. TVA uses the projected unit credit cost method to determine the service cost and the projected benefit obligation for retirement, termination, and ancillary benefits. Under this method, a “projected accrued benefit” is calculated at the beginning of the year and at the end of the year for each benefit that may be payable in the future. The “projected accrued benefit” is based on the plan’s accrual formula and upon service at the beginning or end of the year, but it uses final average compensation, social security benefits, and other relevant factors projected to the age at which the employee is assumed to leave active service. The projected benefit obligation is the actuarial present value of the “projected accrued benefits” at the beginning of the year for employed participants and is the actuarial present value of all benefits for other participants. The service cost is the actuarial present value of the difference between the “projected accrued benefits” at the beginning and end of the year. Amortization of Net Gain or Loss. TVA utilizes the corridor approach for gain/loss amortization. Differences between actuarial assumptions and actual plan results are deferred and amortized into periodic cost only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees. Asset Method. TVA recognizes the impact of asset performance on pension expense over a three -year phase-in period through a “market-related” value of assets calculation. Since the “market-related” value of assets recognizes investment gains and losses over a three -year period, the future value of assets will be impacted as previously deferred gains or losses are recognized. The “market-related” value is used in calculating expected return on plan assets and net gain or loss for pension cost determination. |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Property, Plant, and Equipment Depreciation Rates | Average depreciation rates by asset class are as follows: Property, Plant, and Equipment Depreciation Rates At September 30 (percent) 2015 2014 2013 Asset Class Nuclear 2.81 2.90 2.86 Coal-fired 5.50 4.37 3.47 Hydroelectric 1.30 1.44 1.30 Gas and oil-fired 3.18 3.23 3.21 Transmission 2.78 2.76 2.76 Other 8.65 8.40 8.14 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Severance Cost Liability Activity | The table below summarizes the activity related to severance costs: Severance Cost Liability Activity For the years ended September 30 2015 2014 Severance cost liability at beginning of period $ 45 $ — Liabilities incurred during the period 9 65 Actual costs paid during the period (45 ) (20 ) Adjustments to estimate during the period (1 ) — Severance cost liability at end of period $ 8 $ 45 |
Accounts Receivable, Net Accoun
Accounts Receivable, Net Accounts Receivable, Net (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | The table below summarizes the types and amounts of TVA’s accounts receivable: Accounts Receivable, Net At September 30 2015 2014 Power receivables $ 1,509 $ 1,576 Other receivables 92 101 Allowance for uncollectible accounts (1 ) (1 ) Accounts receivable, net $ 1,600 $ 1,676 |
Inventories, Net Inventories, N
Inventories, Net Inventories, Net (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA’s inventories: Inventories, Net At September 30 2015 2014 Materials and supplies inventory $ 651 $ 616 Fuel inventory 414 473 Emission allowance inventory, net 13 13 Allowance for inventory obsolescence (47 ) (46 ) Inventories, net $ 1,031 $ 1,056 |
Net Completed Plant Net Complet
Net Completed Plant Net Completed Plant (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |
Net Completed Plant | Net completed plant consisted of the following: Net Completed Plant At September 30 2015 2014 Cost Accumulated Depreciation Net Cost Accumulated Depreciation Net Coal-fired $ 15,202 $ 9,942 $ 5,260 $ 14,078 $ 9,065 $ 5,013 Gas and oil-fired 3,794 1,194 2,600 3,411 1,094 2,317 Nuclear 18,920 10,063 8,857 18,489 9,593 8,896 Transmission 6,803 2,823 3,980 6,519 2,683 3,836 Hydroelectric 2,702 911 1,791 2,547 889 1,658 Other electrical plant 1,678 997 681 1,550 885 665 Subtotal 49,099 25,930 23,169 46,594 24,209 22,385 Multipurpose dams 928 371 557 928 364 564 Other stewardship 42 17 25 42 16 26 Subtotal 970 388 582 970 380 590 Total $ 50,069 $ 26,318 $ 23,751 $ 47,564 $ 24,589 $ 22,975 |
Other Long-Term Assets Other Lo
Other Long-Term Assets Other Long-Term Assets (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 September 30 2015 2014 EnergyRight ® receivables $ 124 $ 123 Unamortized debt issue cost of power bonds and variable interest entities 80 68 Loans and other long-term receivables, net 126 87 Commodity contract derivative assets 1 — Prepaid capacity payments 52 58 Currency swap assets, net 25 — Restricted cash — 64 Other 75 83 Total other long-term assets $ 483 $ 483 |
Regulatory Assets and Liabili42
Regulatory Assets and Liabilities Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 September 30 2015 2014 Current regulatory assets Deferred nuclear generating units $ 237 $ 237 Unrealized losses on commodity derivatives 162 134 Environmental agreements 47 54 Environmental cleanup costs – Kingston ash spill 43 47 Fuel cost adjustment receivable 15 9 Other current regulatory assets 2 — Total current regulatory assets 506 481 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 5,565 4,297 Unrealized losses on interest rate derivatives 1,236 957 Nuclear decommissioning costs 1,003 931 Environmental cleanup costs - Kingston ash spill 348 421 Non-nuclear decommissioning costs 828 645 Deferred nuclear generating units 1,042 1,255 Environmental agreements 55 108 Unrealized losses on commodity derivatives 63 72 Other non-current regulatory assets 278 308 Total non-current regulatory assets 10,418 8,994 Total regulatory assets $ 10,924 $ 9,475 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 164 $ 182 Unrealized gains on commodity derivatives — 2 Total current regulatory liabilities 164 184 Non-current regulatory liabilities Unrealized gains on commodity derivatives 2 — Total non-current regulatory liabilities 2 — Total regulatory liabilities $ 166 $ 184 |
Variable Interest Entities Va43
Variable Interest Entities Variable Interest Entities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Summary of Impact of VIEs on Consolidated Balance Sheets | The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of September 30, 2015 and 2014 , as reflected in the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At September 30 2015 2014 Current liabilities of VIE Accrued interest of VIE $ 12 $ 12 Current portion of membership interests of VIE subject to mandatory redemption 2 2 Current maturities of long-term debt of VIE 33 32 Total current liabilities of VIE 47 46 Other liabilities of VIE Membership interests of VIE subject to mandatory redemption 35 37 Long-term debt of VIE, net Long-term debt of VIE 1,246 1,279 Total liabilities of VIE $ 1,328 $ 1,362 |
Other Long-Term Liabilities Oth
Other Long-Term Liabilities Other Long-Term Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 September 30 2015 2014 Interest rate swap liabilities $ 1,627 $ 1,348 EnergyRight ® financing obligation 148 152 Environmental agreements liability 55 108 Currency swap liabilities 47 15 Membership interests of VIE subject to mandatory redemption 35 37 Commodity contract derivative liabilities 17 17 Commodity swap derivative liabilities 10 14 Other 280 271 Total other long-term liabilities $ 2,219 $ 1,962 |
Asset Retirement Obligations 45
Asset Retirement Obligations Asset Retirement Obligations (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity Nuclear Non-Nuclear Total Balance at September 30, 2013 $ 2,399 $ 1,089 $ 3,488 Settlements (ash storage areas) — (14 ) (14 ) Change in estimate (nuclear site - specific studies) (472 ) — (472 ) Change in estimate (other) — (10 ) (10 ) Accretion (recorded to regulatory asset) 125 52 177 Balance at September 30, 2014 $ 2,052 $ 1,117 $ 3,169 (1) Settlements (ash storage areas) — (58 ) (58 ) Change in estimate (coal combustion residuals rule) — 469 469 Change in estimate (nuclear license extension) 36 — 36 Change in estimate (other) — (25 ) (25 ) Additional obligations — 101 101 Accretion (recorded to regulatory asset) 99 52 151 Balance at September 30, 2015 $ 2,187 $ 1,656 $ 3,843 (1) Note (1) The current portions of ARO in the amounts of $ 161 million and $ 80 million as of September 30, 2015 and 2014 , respectively, are included in Accounts payable and accrued liabilities. |
Debt and Other Obligations Debt
Debt and Other Obligations Debt and Other Obligations (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Debt and Other Obligations [Abstract] | |
Summary of Long-Term Credit Facilities | The following table provides additional information regarding TVA's funding available in the form of three long-term revolving credit facilities: Summary of Long-Term Credit Facilities At September 30, 2015 (in billions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability February 2020 $ 0.5 $ 0.5 $ — $ — June 2020 1.0 0.3 — 0.7 September 2020 1.0 0.3 — 0.7 Total $ 2.5 $ 1.1 $ — $ 1.4 |
Debt Securities Activity | The table below summarizes the long-term debt securities activity for the period from October 1, 2013 , to September 30, 2015 . Debt Securities Activity For the years ended September 30 2015 2014 Issues 2014 Series A (1) — 1,000 2015 Series A (2) 1,000 — Discount on debt issues (27 ) (11 ) Total $ 973 $ 989 Redemptions/Maturities (3) Variable interest entities $ 32 $ 30 electronotes ® 62 335 1998 Series D 50 — 1999 Series A 38 — 2005 Series B 1,000 — 2009 Series A 3 4 2009 Series B 27 26 Total $ 1,212 $ 395 Notes (1) The 2014 Series A bonds were issued at 98.94 percent of par. (2) The 2015 Series A bonds were issued at 97.31 percent of par. (3) All redemptions were at 100 percent of par. |
Debt Outstanding | Total debt outstanding at September 30, 2015 , and 2014 , consisted of the following: Short-Term Debt At September 30 CUSIP or Other Identifier Maturity Call/(Put) Date Coupon Rate 2015 2014 Short-term debt, net of discounts $ 1,034 $ 596 Current maturities of long-term debt of variable interest entities issued at par 33 32 Current maturities of power bonds issued at par 880591EE8 11/15/2015 2.250% 2 3 880591EF5 12/15/2015 3.770% 27 26 880591DY5 6/15/2015 4.375% — 1,000 88059TEL1 11/15/2015 2.650% 3 3 Total current maturities of power bonds issued at par 32 1,032 Total current debt outstanding, net $ 1,099 $ 1,660 Long-Term Debt (1) At September 30 CUSIP or Other Identifier Maturity Coupon Rate Call Date 2015 Par 2014 Par Stock Exchange Listings electronotes ®(2) 05/15/2020 - 02/15/2043 2.375 - 4.375% 2/15/2015 - 02/15/2018 $ 325 $ 387 None 880591EE8 (3) 11/15/2015 2.250% — 2 None 880591DS8 12/15/2016 4.875% 524 524 New York 880591EA6 7/18/2017 5.500% 1,000 1,000 New York, Luxembourg 880591CU4 12/15/2017 6.250% 650 650 New York 880591EC2 4/1/2018 4.500% 1,000 1,000 New York, Luxembourg 880591EQ1 10/15/2018 1.750% 1,000 1,000 New York 880591EL2 2/15/2021 3.875% 1,500 1,500 New York 880591DC3 6/7/2021 5.805% (4) 303 324 New York, Luxembourg 880591EN8 8/15/2022 1.875% 1,000 1,000 New York 880591ER9 9/15/2024 2.875% 1,000 1,000 New York 880591CJ9 11/1/2025 6.750% 1,350 1,350 New York, Hong Kong, Luxembourg, Singapore 880591300 (5) 6/1/2028 3.550% 274 324 New York 880591409 (5) 5/1/2029 3.360% 232 270 New York 880591DM1 5/1/2030 7.125% 1,000 1,000 New York, Luxembourg 880591DP4 6/7/2032 6.587% (4) 378 406 New York, Luxembourg 880591DV1 7/15/2033 4.700% 472 472 New York, Luxembourg 880591EF5 (3) 6/15/2034 3.770% 360 388 None 880591DX7 6/15/2035 4.650% 436 436 New York 880591CK6 4/1/2036 5.980% 121 121 New York 880591CS9 4/1/2036 5.880% 1,500 1,500 New York 880591CP5 1/15/2038 6.150% 1,000 1,000 New York 880591ED0 6/15/2038 5.500% 500 500 New York 880591EH1 9/15/2039 5.250% 2,000 2,000 New York 880591EP3 12/15/2042 3.500% 1,000 1,000 New York 880591DU3 6/7/2043 4.962% (4) 227 243 New York, Luxembourg 880591CF7 7/15/2045 6.235% 7/15/2020 140 140 New York 880591EB4 1/15/2048 4.875% 500 500 New York, Luxembourg 880591DZ2 4/1/2056 5.375% 1,000 1,000 New York 880591EJ7 9/15/2060 4.625 % 1,000 1,000 New York 880591ES7 9/15/2065 4.250% 1,000 — New York Subtotal 22,792 22,037 Unamortized discounts, premiums, and other (108 ) (89 ) Total long-term outstanding power bonds, net 22,684 21,948 Long-term debt of variable interest entities 1,246 1,279 Total long-term debt, net $ 23,930 $ 23,227 Notes (1) Includes net exchange gain (loss) from currency transactions of $ 21 million at September 30, 2015 and $ (44) million at September 30, 2014 . (2) Includes one electronotes ® issue (88059TEL1) with partial maturities of principal for each required annual payment. (3) These Bonds include partial maturities of principal for each required annual payment. (4) The coupon rate represents TVA’s effective interest rate. (5) TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above. |
Maturities Due in the Year Ending September 30 | Maturities Due in the Year Ending September 30 2016 2017 2018 2019 2020 Thereafter Total Long-term power bonds and long-term debt of variable interest entities including current maturities (1) $ 65 $ 1,590 $ 1,718 $ 1,070 $ 70 $ 19,611 $ 24,124 Short-term debt, net of discounts 1,034 — — — — — 1,034 Note (1) Does not include noncash items of foreign currency exchange gain of $ 21 million and net discount on sale of Bonds of $ 108 million . |
Risk Management Activities an47
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 Other Comprehensive Income (Loss) For the years ended September 30 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative Hedging Instrument 2015 2014 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 $ (72 ) $ 4 Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) Amount of Gain (Loss) Reclassified from OCI to Interest Expense For the years ended September 30 Derivatives in Cash Flow Hedging Relationship 2015 2014 Currency swaps $ (65 ) $ 2 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 $14 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 (1) For the years ended September 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2015 2014 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) MtM gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in interest expense when payments are made or received on the swap settlement dates. (2) $ (114 ) $ (114 ) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) MtM 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 . — (64 ) Commodity derivatives under FTP To protect against fluctuations in market prices of purchased commodities (price risk) MtM 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. (98 ) (43 ) Notes (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 years ended September 30, 2015 and 2014 . (2) Generally, TVA maintains a level of outstanding discount notes equal to or greater than the notional amount of the interest rate swaps. However, in September 2015 TVA issued long-term Bonds in anticipation of the maturity of other long-term debt, and used the proceeds to pay down discount notes, which caused the balance of discount notes outstanding at September 30, 2015 , to temporarily fall below the notional amount of the interest rate swaps. |
Fair Values of TVA Derivatives | Fair Values of TVA Derivatives At September 30 2015 2014 Derivatives that Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (41 ) Other long-term liabilities $ (15 ) Other long-term liabilities £250 million Sterling 25 Other long-term assets 56 Other long-term assets £150 million Sterling (6 ) Other long-term liabilities 8 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 (1,177 ) Other long-term liabilities (987 ) Other long-term liabilities $476 million notional (438 ) Other long-term liabilities (349 ) Other long-term liabilities $42 million notional (12 ) Other long-term liabilities (12 ) Other long-term liabilities Commodity contract derivatives (97 ) Other long-term assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(81) (96 ) Other current assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(80) FTP Derivatives under FTP (1) (116 ) Other current assets $(89); Other long-term liabilities $(10); Accounts payable and accrued liabilities $(17) (103 ) Other current assets $(69); Other long-term liabilities $(14); Accounts payable and accrued liabilities $(20) Note (1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $ 89 million and $ 69 million at September 30, 2015 and September 30, 2014 , 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 at September 30, 2015 : Currency Swaps Outstanding At September 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 September 30 2015 2014 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 14 19 million tons $ (98 ) 24 31 million tons $ (86 ) Natural gas contract derivatives 33 134 million mmBtu $ 1 46 62 million mmBtu $ (10 ) |
Derivatives Under Financial Trading Program | Derivatives under Financial Trading Program At September 30 2015 2014 Notional Amount Fair Value (MtM) (in millions) Notional Amount Fair Value (MtM) (in millions) Natural gas (in mmBtu) Swap contracts 51,495,000 $ (116 ) 102,227,500 $ (103 ) Note |
Financial Trading Program Unrealized Gains (Losses) | Financial Trading Program Unrealized Gains (Losses) At September 30 FTP unrealized gains (losses) deferred as regulatory liabilities (assets) 2015 2014 Natural gas $ (116 ) $ (103 ) |
Financial Trading Program Realized Gains (Losses) | Financial Trading Program Realized Gains (Losses) For the years ended September 30 Decrease (increase) in fuel expense 2015 2014 Natural gas $ (79 ) $ (34 ) Fuel oil/crude oil 1 2 Financial Trading Program Realized Gains (Losses) For the years ended September 30 Decrease (increase) in purchased power expense 2015 2014 Natural gas $ (20 ) $ (11 ) |
Offsetting Assets and Liabilities [Table Text Block] | The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets as of September 30, 2015 , and September 30, 2014 , are shown in the table below. As of September 30, 2015 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 swap(s) (3),(4) $ 25 $ — $ 25 Commodity derivatives under FTP 49 (49 ) — Total derivatives subject to master netting or similar arrangement 74 (49 ) 25 Total derivatives not subject to master netting or similar arrangement 1 — 1 Total $ 75 $ (49 ) $ 26 Liabilities Currency swap(s) (4) $ 47 $ — $ 47 Interest rate swaps (4) 1,627 — 1,627 Commodity derivatives under FTP 165 (138 ) 27 Total derivatives subject to master netting or similar arrangement 1,839 (138 ) 1,701 Total derivatives not subject to master netting or similar arrangement 98 — 98 Total $ 1,937 $ (138 ) $ 1,799 As of September 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 swap(s) $ 64 $ (64 ) $ — Commodity derivatives under FTP 51 (51 ) — Total derivatives subject to master netting or similar arrangement 115 (115 ) — Total derivatives not subject to master netting or similar arrangement 1 — 1 Total $ 116 $ (115 ) $ 1 Liabilities Currency swap(s) (4) $ 15 $ — $ 15 Interest rate swaps (4) 1,348 — 1,348 Commodity derivatives under FTP 154 (120 ) 34 Total derivatives subject to master netting or similar arrangement 1,517 (120 ) 1,397 Total derivatives not subject to master netting or similar arrangement 97 — 97 Total $ 1,614 $ (120 ) $ 1,494 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) At September 30, 2015 , there were no securities posted by a counterparty on TVA's behalf to partially secure the asset position(s) of currency swaps in accordance with the collateral requirements for these derivatives. (4) Letters of credit of approximately $ 1.1 billion and $ 1.0 billion were posted as collateral at September 30, 2015 and September 30, 2014 , 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. TVA held $15 million and $19 million cash collateral in excess of collateral requirements at September 30, 2015 and September 30, 2014 , respectively. Cash collateral held in excess of collateral requirements is recorded in Restricted cash and investments with a corresponding obligation of the same amount recorded in Accounts payable and accrued liabilities. |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 Investment 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) At September 30 Financial Statement Presentation 2015 2014 SERP Other income (expense) $ (4 ) $ 1 LTDCP Other income (expense) (2 ) — NDT Regulatory asset (47 ) 35 ART Regulatory asset (17 ) 15 |
Fair Value Measurements | Fair Value Measurements At September 30, 2015 Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments Equity securities $ 166 $ — $ — $ 166 Debt securities U.S. government corporations and agencies 203 31 — 234 Corporate debt securities — 225 — 225 Residential mortgage-backed securities — 17 — 17 Commercial mortgage-backed securities — 7 — 7 Collateralized debt obligations — 29 — 29 Institutional mutual funds 91 — — 91 Forward debt securities contracts — (59 ) — (59 ) Private partnerships measured at net asset value (1) — — — 240 Commingled funds measured at net asset value (1) — — — 1,061 Total investments 460 250 — 2,011 Currency swap(s) (2) — 25 — 25 Commodity contract derivatives — — 1 1 Commodity derivatives under FTP (2) Swap contracts — — — — Total $ 460 $ 275 $ 1 $ 2,037 Liabilities Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Currency swap(s) (2) $ — $ 47 $ — $ 47 Interest rate swaps — 1,627 — 1,627 Commodity contract derivatives — — 98 98 Commodity derivatives under FTP (2) Swap contracts — 27 — 27 Total $ — $ 1,701 $ 98 $ 1,799 Notes (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (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, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements At September 30, 2014 Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Investments Equity securities $ 162 $ — $ — $ 162 Debt securities U.S. government corporations and agencies 46 36 — 82 Corporate debt securities — 290 — 290 Residential mortgage-backed securities — 14 — 14 Commercial mortgage-backed securities — 7 — 7 Collateralized debt obligations — 29 — 29 Institutional mutual funds 101 — — 101 Forward debt securities contracts — 3 — 3 Private partnerships measured at net asset value (1) — — — 214 Commingled funds measured at net asset value (1) — — — 1,079 Total investments 309 379 — 1,981 Currency swap(s) (2) — — — — Commodity contract derivatives — — 1 1 Commodity derivatives under FTP (2) Swap contracts — — — — Total $ 309 $ 379 $ 1 $ 1,982 Liabilities Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Currency swap(s) (2) $ — $ 15 $ — $ 15 Interest rate swaps — 1,348 — 1,348 Commodity contract derivatives — — 97 97 Commodity derivatives under FTP (2) Swap contracts — 34 — 34 Total $ — $ 1,397 $ 97 $ 1,494 Notes (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (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 any cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities . |
Fair Value Measurements Using Significant Unobservable Inputs | The following table presents a reconciliation of all commodity contract derivatives measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Fair Value Measurements Using Significant Unobservable Inputs Commodity Contract Derivatives Balance at October 1, 2013 $ (140 ) Purchases — Issuances — Sales — Settlements 33 Net unrealized gains (losses) deferred as regulatory assets and liabilities 11 Balance at September 30, 2014 (96 ) Purchases — Issuances — Sales — Settlements — Net unrealized gains (losses) deferred as regulatory assets and liabilities (1 ) Balance at September 30, 2015 $ (97 ) |
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 September 30 2015 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives 1 Pricing model Coal supply and demand 0.8 - 1.0 billion tons/year Long-term market prices $10.64 - $103.41/ton Liabilities Commodity contract derivatives 98 Pricing model Coal supply and demand 0.8 - 1.0 billion tons/year Long-term market prices $10.64 - $103.41/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30 2014 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 1 Discounted cash flow Credit risk 2 - 5 % (1) Pricing model Coal supply and demand 1.0 - 1.1 billion tons/year Long-term market prices $11.24 - $67.07/ton Liabilities Commodity contract derivatives $ 97 Pricing model Coal supply and demand 1.0 - 1.1 billion tons/year Long-term market prices $11.24 - $67.07/ton Note (1) Applies to two contracts. |
Estimated Values of Financial Instruments Not Recorded at Fair Value | The estimated values of TVA's financial instruments not recorded at fair value at September 30, 2015 , and September 30, 2014 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At September 30 2015 2014 Valuation Classification Carrying Amount Fair Value Carrying Amount Fair Value EnergyRight ® receivables (including current portion) Level 2 $ 156 $ 162 $ 156 $ 166 Loans and other long-term receivables, net (including current portion) Level 2 $ 129 $ 117 $ 92 $ 81 EnergyRight ® purchase obligation (including current portion) Level 2 $ 185 $ 208 $ 190 $ 215 Unfunded loan commitments Level 2 $ — $ 9 $ — $ 18 Membership interests of variable interest entity subject to mandatory redemption (including current portion) Level 2 $ 37 $ 47 $ 39 $ 50 Long-term outstanding power bonds (including current maturities), net Level 2 $ 22,716 $ 25,468 $ 22,980 $ 26,889 Long-term debt of variable interest entities (including current maturities) Level 2 $ 1,279 $ 1,407 $ 1,311 $ 1,425 |
Proprietary Capital Proprietary
Proprietary Capital Proprietary Capital (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Summary of Proprietary Capital Activity | The table below summarizes TVA's activities related to appropriated funds. Summary of Proprietary Capital Activity At or for the years ended September 30 2015 2014 Appropriation Investment Power Program Nonpower Programs Power Program Nonpower Programs Balance at beginning of year $ 258 $ 4,351 $ 268 $ 4,351 Return of power program appropriation investment — — (10 ) — Balance at end of year 258 4,351 258 4,351 Retained Earnings Balance at beginning of year 5,240 (3,750 ) 4,767 (3,742 ) Net income (expense) for year 1,122 (11 ) 477 (8 ) Return on power program appropriation investment (5 ) — (4 ) — Balance at end of year 6,357 (3,761 ) 5,240 (3,750 ) Net proprietary capital at September 30 $ 6,615 $ 590 $ 5,498 $ 601 |
Other Income (Expense), Net Oth
Other Income (Expense), Net Other Income (Expense), Net (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
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 years ended September 30 2015 2014 2013 Interest income $ 24 $ 23 $ 23 External services 12 19 18 Gains (losses) on investments (1 ) 6 4 Miscellaneous (6 ) 1 (1 ) Total other income (expense), net $ 29 $ 49 $ 44 |
Benefit Plans Benefit Plans (Ta
Benefit Plans Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Obligations and Funded Status | The changes in plan obligations, assets, and funded status for the years ended September 30, 2015 and 2014 , were as follows: Obligations and Funded Status For the years ended September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 12,265 $ 11,471 $ 652 $ 656 Service cost 130 130 16 18 Interest cost 540 558 29 32 Plan participants’ contributions 25 28 — — Collections (1) — — 94 93 Amendments — 2 — — Actuarial loss (gain) 556 722 3 (21 ) Net transfers from variable fund/401(k) plan 11 13 — — Expenses paid (6 ) (6 ) — — Benefits paid (697 ) (653 ) (137 ) (126 ) Benefit obligation at end of year 12,824 12,265 657 652 Change in plan assets Fair value of net plan assets at beginning of year 7,507 7,221 — — Actual return on plan assets (325 ) 648 — — Plan participants’ contributions 25 28 — — Collections (1) — — 94 93 Net transfers from variable fund/401(k) plan 11 13 — — Employer contributions (2) 282 256 43 33 Expenses paid (6 ) (6 ) — — Benefits paid (697 ) (653 ) (137 ) (126 ) Fair value of net plan assets at end of year 6,797 7,507 — — Funded status $ (6,027 ) $ (4,758 ) $ (657 ) $ (652 ) Notes (1) Collections include retiree contributions as well as federal reinsurance payments and provider discounts and rebates. (2) Other Post-Retirement Benefits Employer contributions are reduced by federal reinsurance payments and provider discounts and rebates. |
Amounts Recognized on TVA's Consolidated Balance Sheets | Amounts related to these benefit plans recognized on TVA's consolidated balance sheets consist of regulatory assets that have not been recognized as components of net periodic benefit cost at September 30, 2015 and 2014 , and the funded status of TVA’s benefit plans, which are included in Accounts payable and accrued liabilities and Post-retirement and post-employment benefit obligations: Amounts Recognized on TVA's Consolidated Balance Sheets At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Regulatory assets $ 5,425 $ 4,157 $ 140 $ 140 Accounts payable and accrued liabilities (6 ) (5 ) (37 ) (38 ) Pension and post-retirement benefit obligations (1) (6,021 ) (4,753 ) (620 ) (614 ) Note (1) Table above excludes $465 million and $472 million of post-employment benefit costs that are recorded in post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2015 and 2014 , respectively. |
Post-Retirement Benefit Costs Deferred as Regulatory Assets | Unrecognized amounts included in regulatory assets yet to be recognized as components of accrued benefit cost at September 30 consisted of: Post-Retirement Benefit Costs Deferred as Regulatory Assets At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Unrecognized prior service credit $ (158 ) $ (180 ) $ (33 ) $ (39 ) Unrecognized net loss 5,355 4,337 173 179 Amount capitalized due to actions of regulator 228 — — — Total regulatory assets $ 5,425 $ 4,157 $ 140 $ 140 |
Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets | The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan at September 30, 2015 , and 2014 , were as follows: Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets At September 30 2015 2014 Projected benefit obligation $ 12,824 $ 12,265 Accumulated benefit obligation 12,626 12,039 Fair value of net plan assets 6,797 7,507 |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the years ended September 30, 2015 , and 2014 , were as follows: Components of Net Periodic Benefit Cost For the years ended September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2013 2015 2014 2013 Service cost $ 130 $ 130 $ 154 $ 16 $ 18 $ 24 Interest cost 540 558 468 29 32 31 Expected return on plan assets (437 ) (435 ) (428 ) — — — Amortization of prior service credit (21 ) (21 ) (22 ) (6 ) (6 ) (6 ) Recognized net actuarial loss 299 285 377 9 11 25 Total net periodic benefit cost as actuarially determined 511 517 549 48 55 74 Amount capitalized due to actions of regulator (228 ) — — — — — Total net period benefit cost $ 283 $ 517 $ 549 $ 48 $ 55 $ 74 |
Expected Amortization of Regulatory Assets in Next Fiscal Year | The amounts in the regulatory asset that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows: Expected Amortization of Regulatory Assets in 2016 At September 30, 2015 Pension Benefits Other Post-Retirement Benefits Total Prior service credit $ (23 ) $ (6 ) $ (29 ) Net actuarial loss 291 8 299 |
Actuarial Assumptions | TVA’s reported costs of providing the plan benefits are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various assumptions, the most significant of which are noted below. Actuarial Assumptions At September 30 Pension Benefits Other Post-Retirement Benefits 2015 2014 2015 2014 Assumptions utilized to determine benefit obligations at September 30 Discount rate 4.50 % 4.45 % 4.65 % 4.50 % Rate of compensation increase 5.70 % 5.70 % N/A N/A Initial health care cost trend rate N/A N/A 7.00 % 7.50 % Ultimate health care cost trend rate N/A N/A 5.00 % 5.00 % Ultimate trend rate is reached in year beginning N/A N/A 2019 2019 Assumptions utilized to determine net periodic benefit cost for the years ended September 30 Discount rate 4.45 % 5.00 % 4.50 % 5.05 % Expected return on plan assets 7.00 % 7.25 % N/A N/A Rate of compensation increase 5.70 % 5.72 % N/A N/A Initial health care cost trend rate N/A N/A 7.50 % 8.00 % Ultimate health care cost trend rate N/A N/A 5.00 % 5.00 % Ultimate trend rate is reached in year beginning N/A N/A 2019 2019 |
Sensitivity to Certain Changes in Pension Assumptions | The following chart reflects the sensitivity of pension cost to changes in certain actuarial assumptions: Sensitivity to Certain Changes in Pension Assumptions At September 30, 2015 Actuarial Assumption Change in Assumption Impact on 2015 Pension Cost Impact on 2015 Projected Benefit Obligation Discount rate (0.25 ) $ 18 $ 404 Rate of return on plan assets (0.25 ) 16 N/A |
Sensitivity to Changes in Assumed Health Care Cost Trend Rates | The following chart reflects the sensitivity of post-retirement benefit cost to changes in the health care trend rate: Sensitivity to Changes in Assumed Health Care Cost Trend Rates At September 30, 2015 1% Increase 1% Decrease Effect on total of service and interest cost components for the year $ 6 $ (6 ) Effect on end-of-year accumulated post-retirement benefit obligation 88 (94 ) |
Asset Holdings and Fair Value Measurements | At September 30, 2015 and 2014 , the asset holdings of the system included the following: Asset Holdings of TVARS At September 30 Plan Assets at September 30 Asset Category Target Allocation 2015 2014 Global equity 32 % 38 % 43 % Private equity 10 % 5 % 5 % Low volatility global public equity 5 % 5 % 1 % Cash 2 % 2 % 2 % Core fixed income 5 % 5 % 5 % Long-term core fixed income 5 % 5 % 5 % Investment grade credit 6 % 6 % 6 % International emerging markets fixed income 5 % 5 % 5 % High yield fixed income 5 % 6 % 6 % Global TIPS 5 % 6 % 5 % Private real assets 10 % 9 % 7 % Commodities 5 % 4 % 4 % MLPs 5 % 4 % 6 % Total 100 % 100 % 100 % Fair Value Measurements The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2015 : TVA Retirement System At September 30, 2015 Total (1) (2) Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Equity securities $ 1,650 $ 1,649 $ — $ 1 Preferred securities 36 2 34 — Debt securities Corporate debt securities 1,161 — 1,149 12 Residential mortgage-backed securities 151 — 138 13 Debt securities issued by U.S. Treasury 362 362 — — Debt securities issued by foreign governments 294 — 281 13 Asset-backed securities 156 — 116 40 Debt securities issued by state/local governments 25 — 25 — Commercial mortgage-backed securities 43 — 32 11 Commingled Funds measured at net asset value (3) Equity 642 — — — Debt 654 — — — Commodity 244 — — — Blended 206 — — — Institutional mutual funds 26 26 — — Cash equivalents and other short-term investments 318 — 318 — Certificates of deposit 6 — 6 — Private equity measured at net asset value (3) 389 — — — Private real estate measured at net asset value (3) 556 — — — Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral 34 21 13 — Securities lending commingled funds 3 — 3 — Derivatives Purchased options 2 — 1 1 Foreign currency forward receivable 6 — 6 — Total Assets $ 6,964 $ 2,060 $ 2,122 $ 91 Liabilities Futures 17 $ 17 $ — $ — Foreign currency forward payable 4 — 4 — Written options 2 — 2 — Interest rate swaps 10 — 10 — Credit default swaps 1 — 1 — Total Liabilities $ 34 $ 17 $ 17 $ — Notes (1) Excludes approximately $ 130 million in net payables associated with security purchases and sales and various other payables. (2) Excludes a $ 3 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. (3) In accordance with Accounting Standards Codification Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2014 : TVA Retirement System At September 30, 2014 Total (1) (2) Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Equity securities $ 1,669 $ 1,668 $ — $ 1 Preferred securities 37 5 32 — Debt securities Corporate debt securities 1,326 — 1,304 22 Residential mortgage-backed securities 204 — 201 3 Debt securities issued by U.S. Treasury 93 93 — — Debt securities issued by foreign governments 225 — 218 7 Asset-backed securities 176 — 147 29 Debt securities issued by state/local governments 30 — 29 1 Commercial mortgage-backed securities 23 — 20 3 Commingled funds measured at net asset value (3) Equity 1,106 — — — Debt 661 — — — Commodities 332 — — — Blended 228 — — — Institutional mutual funds 28 28 — — Cash equivalents and other short-term investments 464 — 464 — Certificates of deposit 19 — 19 — Private equity measured at net asset value (3) 481 — — — Private real estate measured at net asset value (3) 435 — — — Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral 35 10 25 — Securities lending commingled funds 2 — 2 — Derivatives Purchased options 18 — 18 — Foreign currency forward receivable 8 — 8 — Total Assets $ 7,600 $ 1,804 $ 2,487 $ 66 Liabilities Futures 11 $ 11 $ — $ — Foreign currency forward payable 8 — 8 — Written options 7 — 7 — Total Liabilities $ 26 $ 11 $ 15 $ — Notes (1) Excludes approximately $ 65 million in net payables associated with security purchases and sales and various other payables. (2) Excludes a $ 2 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. (3) In accordance with Accounting Standards Codification Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. |
Fair Value Measurements Using Significant Unobservable Inputs | The following table provides a reconciliation of beginning and ending balances of pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3): Fair Value Measurements Using Significant Unobservable Inputs Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Balance at October 1, 2013 $ 42 Net realized/unrealized gains (losses) 3 Purchases, sales, issuances, and settlements (net) 26 Transfers in and/or out of Level 3 (5 ) Balance at September 30, 2014 66 Net realized/unrealized gains (losses) (2 ) Purchases, sales, issuances, and settlements (net) 33 Transfers in and/or out of Level 3 (6 ) Balance at September 30, 2015 $ 91 |
Estimated Future Benefit Payments | The following table sets forth the estimated future benefit payments under the benefit plans. Estimated Future Benefits Payments At September 30, 2015 Pension Benefits Other Post-Retirement Benefits 2016 $ 741 $ 39 2017 744 39 2018 748 39 2019 755 39 2020 764 39 2021 - 2025 3,903 178 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | At September 30, 2015 , the amounts of contractual cash commitments maturing in each of the next five years and beyond are shown below: Commitments and Contingencies Payments due in the years ending September 30 2016 2017 2018 2019 2020 Thereafter Total Membership interests of variable interest entity subject to mandatory redemption 2 2 2 2 3 26 37 Lease obligations Capital 13 13 13 12 12 156 219 Non-cancelable operating 44 42 32 25 25 38 206 Purchase obligations Power 217 226 229 235 241 3,124 4,272 Fuel 1,282 711 635 508 335 1,448 4,919 Other 262 198 193 189 173 1,830 2,845 Unfunded loan commitments 5 — — — — — 5 Payments on other financings 104 104 104 96 73 232 713 Total $ 1,929 $ 1,296 $ 1,208 $ 1,067 $ 862 $ 6,854 $ 13,216 |
Energy Prepayment Obligations | Energy Prepayment Obligations Payments due in the years ending September 30 2016 2017 2018 2019 2020 Thereafter Total Energy Prepayment Obligations $ 100 $ 100 $ 100 $ 10 $ — $ — $ 310 |
Related Parties Related Parties
Related Parties Related Parties (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Transactions with agencies of the federal government were as follows: Related Party Transactions For the years ended, or at, September 30 2015 2014 2013 Revenue from sales of electricity $ 130 $ 128 $ 120 Other income 115 120 84 Judgment settlement 52 17 18 Expenditures Operating expenses 227 267 299 Additions to property, plant, and equipment 37 19 15 Cash and cash equivalents 45 35 38 Accounts receivable, net 106 85 58 Accounts payable and accrued liabilities 98 146 133 Long-term power bonds, net 5 3 — Return on Power Program Appropriation Investment 5 4 7 Return of Power Program Appropriation Investment — 10 20 |
Unaudited Quarterly Financial54
Unaudited Quarterly Financial Information Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | Unaudited Quarterly Financial Information 2015 First Second Third Fourth Total Operating revenues $ 2,411 $ 2,863 $ 2,558 $ 3,171 $ 11,003 Operating expenses 2,047 2,087 2,252 2,402 8,788 Operating income 364 776 306 769 2,215 Net income (loss) 81 496 32 502 1,111 Unaudited Quarterly Financial Information 2014 First Second Third Fourth Total Operating revenues $ 2,382 $ 2,938 $ 2,651 $ 3,166 $ 11,137 Operating expenses 2,164 2,362 2,453 2,569 9,548 Operating income 218 576 198 597 1,589 Net income (loss) (67 ) 295 (81 ) 322 469 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - General (Details) People in Millions, $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($)PeopleCustomers | |
Population of Service Area | |
Population of TVA's service area (number of people) | People | 9 |
Maximum original maturity | 3 months |
Number of customers for whom unbilled revenues are estimated | Customers | 6 |
Recorded cost for emission allowances granted by the Environmental Protection Agency | $ 0 |
Possible amount of future payments to the Department of Energy under the blended low-enriched uranium program | 162 |
Payments attributable to blended low-enriched uranium fuel currently in use | 131 |
BLEU fuel obligation | 12 |
Amount of appropriation investment that must be repaid | $ 1,000 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Reclassificatons (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Reclassifications | ||
Reclassification from Environmental cleanup costs-Kingston ash spill-non cash to Other, net | $ 68 | $ 72 |
Reclassification from Environmental cleanup costs-Kingston ash spill to Other, net | $ (109) | $ (99) |
Summary of Significant Accoun57
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Allowance for Uncollectible Accounts | ||
Period of time for customers to fulfill payment arrangements | 90 days | |
Allowance for uncollectible accounts - receivables | $ 1 | $ 1 |
Loans receivable | 129 | 92 |
Allowance for uncollectible accounts - loans | $ 8 | $ 9 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Property, Plant, and Equipment, and Depreciation (Details) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2011Units | |
Property, Plant, and Equipment, and Depreciation | ||||
Depreciation | $ 1,700 | $ 1,600 | $ 1,400 | |
Composite depreciation rate for completed plant | 3.71% | 3.42% | 3.12% | |
Accelerated depreciation | $ 383 | $ 206 | $ 49 | |
Capital leases | 94 | 102 | ||
Allowance for funds used during construction | 214 | 175 | ||
AFUDC minimum total project cost | $ 1,000 | |||
Minimum construction period | 3 years | |||
Accumulated balance of qualifying projects | $ 4,100 | |||
Capitalized software amortization period | 5 years | |||
Unamortized computer software costs | $ 18 | 22 | ||
Amortization expense of capitalized computer software costs | 38 | 31 | $ 31 | |
Electricity Generation Plant, Non-Nuclear [Member] | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Capital leases | $ 94 | $ 102 | ||
Nuclear | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 2.81% | 2.90% | 2.86% | |
Coal-fired | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 5.50% | 4.37% | 3.47% | |
Hydroelectric | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 1.30% | 1.44% | 1.30% | |
Gas and oil-fired | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 3.18% | 3.23% | 3.21% | |
Transmission | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 2.78% | 2.76% | 2.76% | |
Other | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Composite depreciation rate for completed plant | 8.65% | 8.40% | 8.14% | |
Environmental Agreements | ||||
Property, Plant, and Equipment, and Depreciation | ||||
Number of units to be idled | Units | 18 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Energy Prepayment Obligations and Discounts on Sales (Details) - USD ($) $ in Millions | 12 Months Ended | 132 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2004 | Sep. 30, 2015 | |
Energy Prepayment Obligations and Discounts on Sales | |||||
MLGW prepayment | $ 1,500 | ||||
MLGW prepayment period | 180 months | ||||
MLGW | |||||
Energy Prepayment Obligations and Discounts on Sales | |||||
Deferred revenue expected recognition each year | $ 100 | ||||
Deferred revenue, revenue recognized | 100 | $ 100 | $ 100 | $ 1,200 | |
Total | |||||
Energy Prepayment Obligations and Discounts on Sales | |||||
Discounts reducing electricity sales | $ 46 | $ 46 | $ 46 |
Impact of New Accounting Stan60
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Other long-term assets | ||
Other Long-Term Assets | ||
Unamortized Debt Issuance Expense | $ 80 | $ 68 |
Restructuring (Details)
Restructuring (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Restructuring and Related Activities [Abstract] | |||
Severance cost liability | $ 8 | $ 45 | $ 0 |
Liabilities incurred during the period | 9 | 65 | |
Actual costs paid during the period | (45) | (20) | |
Adjustments to estimate during the period | $ (1) | $ 0 | |
Approximate number of positions eliminated | 200 | 2,000 |
Accounts Receivable, Net Acco62
Accounts Receivable, Net Accounts Receivable, Net (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Accounts Receivable, Net | ||
Power receivables | $ 1,509 | $ 1,576 |
Other receivables | 92 | 101 |
Allowance for uncollectible accounts | (1) | (1) |
Accounts receivable, net | $ 1,600 | $ 1,676 |
Inventories, Net Inventories,63
Inventories, Net Inventories, Net (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Inventories, Net | ||
Materials and supplies inventory | $ 651 | $ 616 |
Fuel inventory | 414 | 473 |
Emission allowance inventory, net | 13 | 13 |
Allowance for inventory obsolescence | (47) | (46) |
Inventories, net | $ 1,031 | $ 1,056 |
Acquisition (Details)
Acquisition (Details) $ in Millions | Apr. 14, 2015USD ($)Megawatts |
Business Acquisition, Transaction Costs | $ 342 |
Megawatts | Megawatts | 700 |
Completed plant | |
Business Acquisition, Transaction Costs | $ 333 |
Other long-term assets | |
Business Acquisition, Transaction Costs | 6 |
Inventories | |
Business Acquisition, Transaction Costs | $ 3 |
Net Completed Plant Net Compl65
Net Completed Plant Net Completed Plant (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Completed Plant | ||
Completed plant cost | $ 50,069 | $ 47,564 |
Accumulated depreciation | 26,318 | 24,589 |
Net completed plant | 23,751 | 22,975 |
Coal-fired | ||
Completed Plant | ||
Completed plant cost | 15,202 | 14,078 |
Accumulated depreciation | 9,942 | 9,065 |
Net completed plant | 5,260 | 5,013 |
Gas and oil-fired | ||
Completed Plant | ||
Completed plant cost | 3,794 | 3,411 |
Accumulated depreciation | 1,194 | 1,094 |
Net completed plant | 2,600 | 2,317 |
Nuclear | ||
Completed Plant | ||
Completed plant cost | 18,920 | 18,489 |
Accumulated depreciation | 10,063 | 9,593 |
Net completed plant | 8,857 | 8,896 |
Transmission | ||
Completed Plant | ||
Completed plant cost | 6,803 | 6,519 |
Accumulated depreciation | 2,823 | 2,683 |
Net completed plant | 3,980 | 3,836 |
Hydroelectric | ||
Completed Plant | ||
Completed plant cost | 2,702 | 2,547 |
Accumulated depreciation | 911 | 889 |
Net completed plant | 1,791 | 1,658 |
Other electrical plant | ||
Completed Plant | ||
Completed plant cost | 1,678 | 1,550 |
Accumulated depreciation | 997 | 885 |
Net completed plant | 681 | 665 |
Electric Subtotal | ||
Completed Plant | ||
Completed plant cost | 49,099 | 46,594 |
Accumulated depreciation | 25,930 | 24,209 |
Net completed plant | 23,169 | 22,385 |
Multipurpose dams | ||
Completed Plant | ||
Completed plant cost | 928 | 928 |
Accumulated depreciation | 371 | 364 |
Net completed plant | 557 | 564 |
Other stewardship | ||
Completed Plant | ||
Completed plant cost | 42 | 42 |
Accumulated depreciation | 17 | 16 |
Net completed plant | 25 | 26 |
Other Subtotal | ||
Completed Plant | ||
Completed plant cost | 970 | 970 |
Accumulated depreciation | 388 | 380 |
Net completed plant | $ 582 | $ 590 |
Other Long-Term Assets Other 66
Other Long-Term Assets Other Long-Term Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | |||
Other Long-Term Assets | ||||
EnergyRight receivables | $ 162 | $ 166 | ||
Currency swap assets, net | 25 | [1] | 0 | [2] |
Total other long-term assets | $ 483 | 483 | ||
Energy Right Program | ||||
Other Long-Term Assets | ||||
Number of days in default | 180 days | |||
Other long-term assets | ||||
Other Long-Term Assets | ||||
EnergyRight receivables | $ 124 | 123 | ||
Unamortized debt Issue cost of power bonds and variable interest entities | 80 | 68 | ||
Loans and other long-term receivables, net | 126 | 87 | ||
Coal contract derivative assets | 1 | 0 | ||
Prepaid capacity payments | 52 | 58 | ||
Currency swap assets, net | 25 | 0 | ||
Restricted cash | 0 | 64 | ||
Other | 75 | 83 | ||
Accounts Receivable [Member] | ||||
Other Long-Term Assets | ||||
EnergyRight receivables | $ 32 | $ 33 | ||
Minimum | Energy Right Program | ||||
Other Long-Term Assets | ||||
Debt Instrument, Term | 5 years | |||
Maximum | Energy Right Program | ||||
Other Long-Term Assets | ||||
Debt Instrument, Term | 10 years | |||
[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, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. | |||
[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 any cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. |
Regulatory Assets and Liabili67
Regulatory Assets and Liabilities Regulatory Assets and Liabilities - Table (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 506 | $ 481 |
Non-current regulatory assets | 10,418 | 8,994 |
Regulatory assets | 10,924 | 9,475 |
Current regulatory liabilities | 164 | 184 |
Non-current regulatory liabilities | 2 | 0 |
Regulatory liabilities | 166 | 184 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 164 | 182 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 0 | 2 |
Non-current regulatory liabilities | 2 | 0 |
Deferred nuclear generating units | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 237 | 237 |
Non-current regulatory assets | 1,042 | 1,255 |
Regulatory assets | 1,300 | |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 162 | 134 |
Non-current regulatory assets | 63 | 72 |
Environmental agreements | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 47 | 54 |
Non-current regulatory assets | 55 | 108 |
Environmental cleanup costs - Kingston ash spill | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 43 | 47 |
Non-current regulatory assets | 348 | 421 |
Fuel cost adjustment receivable | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 15 | 9 |
Other current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 2 | 0 |
Deferred pension costs and other post-retirement benefits costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 5,565 | 4,297 |
Unrealized losses on interest rate derivatives | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 1,236 | 957 |
Nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 1,003 | 931 |
Non-nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 828 | 645 |
Other non-current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 278 | $ 308 |
Regulatory Assets and Liabili68
Regulatory Assets and Liabilities Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Regulatory Assets and Liabilities | |||
Current regulatory assets | $ 506 | $ 481 | |
Regulatory Assets | 10,924 | 9,475 | |
Yearly amortization of Deferred nuclear generating units | $ 237 | ||
Period collected in rates | 15 years | ||
Deferred Nuclear Generating Units and Construction Costs | |||
Regulatory Assets and Liabilities | |||
Remaining balance to be included in plant asset balance at completion | $ 619 | ||
Environmental Cleanup Costs - Kingston Ash Spill | |||
Regulatory Assets and Liabilities | |||
Current regulatory asset amortization period | 12 months | ||
Environmental Agreements | |||
Regulatory Assets and Liabilities | |||
Initial regulatory asset | $ 360 | ||
Investment in environmental agreement projects | 290 | ||
Amount to be provided to fund environmental projects | 60 | ||
Amount to be paid in civil penalties | 10 | ||
Energy Efficiency Projects | Environmental Agreements | |||
Regulatory Assets and Liabilities | |||
Regulatory asset amount expensed | 188 | ||
Paid to States | Environmental Agreements | |||
Regulatory Assets and Liabilities | |||
Regulatory asset amount expensed | 60 | ||
Civil Penalties | Environmental Agreements | |||
Regulatory Assets and Liabilities | |||
Regulatory asset amount expensed | 10 | ||
Derivatives Under FTP | |||
Regulatory Assets and Liabilities | |||
Net unrealized gains (losses) | [1] | 116 | 103 |
Other current regulatory assets | |||
Regulatory Assets and Liabilities | |||
Current regulatory assets | 2 | 0 | |
Deferred Nuclear Generating Units and Construction Costs | |||
Regulatory Assets and Liabilities | |||
Current regulatory assets | 237 | $ 237 | |
Regulatory Assets | $ 1,300 | ||
[1] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $89 million and $69 million at September 30, 2015 and September 30, 2014, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. |
Variable Interest Entities Va69
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Aug. 09, 2013 | Jan. 17, 2012 | |
Variable Interest Entities | |||||
Interest expense | $ 63 | $ 64 | $ 50 | ||
VIE Financing | |||||
Membership interests of VIE subject to mandatory redemption | 47 | 50 | $ 40 | ||
Financial instruments subject to mandatory redemption, interest rate, stated percentage | 7.00% | ||||
Liabilities | |||||
Total liabilities | 1,328 | 1,362 | $ 1,000 | ||
SCCG | |||||
VIE Financing | |||||
Face Amount | $ 360 | ||||
JSCCG | |||||
VIE Financing | |||||
Face Amount | 900 | ||||
Holdco | |||||
VIE Financing | |||||
Face Amount | $ 100 | ||||
Accrued interest of VIE | |||||
Liabilities | |||||
Total liabilities | 12 | 12 | |||
Current portion of membership interests of VIE subject to mandatory redemption | |||||
Liabilities | |||||
Total liabilities | 2 | 2 | |||
Current maturities of long-term debt of VIE | |||||
Liabilities | |||||
Total liabilities | 33 | 32 | |||
Total current liabilities of VIE | |||||
Liabilities | |||||
Total liabilities | 47 | 46 | |||
Membership interests of VIE subject to mandatory redemption | |||||
Liabilities | |||||
Total liabilities | 35 | 37 | |||
Long-term debt of VIE | |||||
Liabilities | |||||
Total liabilities | $ 1,246 | $ 1,279 |
Kingston Fossil Plant Ash Spi70
Kingston Fossil Plant Ash Spill Kingston Fossil Plant Ash Spill (Details) Cubic_yards in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | 42 Months Ended | |
Nov. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2008Dredge_cellsCubic_yards | |
Kingston Fossil Plant Ash Spill | ||||
Number of dredge cells that failed | Dredge_cells | 1 | |||
Cubic yards of water and coal fly ash that flowed out of the cell | Cubic_yards | 5 | |||
Period collected in rates | 15 years | |||
Kingston cleanup amounts spent to date | $ 1,100 | $ 1,100 | ||
Remaining estimated Kingston liability | 6 | 6 | ||
Kingston insurance recoveries | $ 63 | $ 336 | ||
Scenario, Forecast [Member] | ||||
Kingston Fossil Plant Ash Spill | ||||
Kingston insurance recoveries | $ 7 |
Other Long-Term Liabilities O71
Other Long-Term Liabilities Other Long-Term Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | |||
Other Long-Term Liabilities | ||||
Interest rate swap liabilities | $ 1,627 | $ 1,348 | ||
EnergyRight financing obligation | 208 | 215 | ||
Currency swap liabilities | 47 | [1] | 15 | [2] |
Total other long-term liabilities | $ 2,219 | 1,962 | ||
Energy Right Program | ||||
Other Long-Term Liabilities | ||||
Number of days in default | 180 days | |||
Other long-term liabilities | ||||
Other Long-Term Liabilities | ||||
Interest rate swap liabilities | $ 1,627 | 1,348 | ||
EnergyRight financing obligation | 148 | 152 | ||
Environmental agreements liability | 55 | 108 | ||
Currency swap liabilities | 47 | 15 | ||
Membership interests of VIE subject to mandatory redemption | 35 | 37 | ||
Commodity contract derivative liabilities | 17 | 17 | ||
Commodity swap derivative liabilities | 10 | 14 | ||
Other | 280 | 271 | ||
Accounts payable and accrued liabilities | ||||
Other Long-Term Liabilities | ||||
EnergyRight financing obligation | $ 37 | $ 38 | ||
Minimum | Energy Right Program | ||||
Other Long-Term Liabilities | ||||
Debt Instrument, Term | 5 years | |||
Maximum | Energy Right Program | ||||
Other Long-Term Liabilities | ||||
Debt Instrument, Term | 10 years | |||
[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, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. | |||
[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 any cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. |
Asset Retirement Obligations 72
Asset Retirement Obligations Asset Retirement Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Asset Retirement Obligations | |||
Increase in ARO liability | $ 674 | ||
Initial decommissioning estimate for nuclear | 7 years | ||
ARO-Nuclear Decommissioning Study Update | 5 years | ||
Accretion expense | $ 44 | $ 40 | |
Balance | [1] | 3,169 | 3,488 |
Settlements (ash storage areas) | [1] | (58) | (14) |
Change in estimate (coal combustion residuals rule)) | [1] | 469 | |
Change in estimate (nuclear license extension) | [1] | 36 | |
Change in estimate | [1] | (25) | (10) |
Additional obligations | [1] | 101 | |
Accretion (recorded as regulatory asset) | [1] | 151 | 177 |
Change in estimate (nuclear site - specific studies) | [1] | (472) | |
Balance | [1] | 3,843 | 3,169 |
Current portion of ARO | 161 | 80 | |
Nuclear | |||
Asset Retirement Obligations | |||
Balance | [1] | 2,052 | 2,399 |
Settlements (ash storage areas) | [1] | 0 | 0 |
Change in estimate (coal combustion residuals rule)) | [1] | 0 | |
Change in estimate (nuclear license extension) | [1] | 36 | |
Change in estimate | [1] | 0 | 0 |
Additional obligations | [1] | 0 | |
Accretion (recorded as regulatory asset) | [1] | 99 | 125 |
Change in estimate (nuclear site - specific studies) | [1] | (472) | |
Balance | [1] | 2,187 | 2,052 |
Non-nuclear | |||
Asset Retirement Obligations | |||
Balance | [1] | 1,117 | 1,089 |
Settlements (ash storage areas) | [1] | (58) | (14) |
Change in estimate (coal combustion residuals rule)) | [1] | 469 | |
Change in estimate (nuclear license extension) | [1] | 0 | |
Change in estimate | [1] | (25) | (10) |
Additional obligations | [1] | 101 | |
Accretion (recorded as regulatory asset) | [1] | 52 | 52 |
Change in estimate (nuclear site - specific studies) | [1] | 0 | |
Balance | [1] | 1,656 | $ 1,117 |
Plant acquisition [Member] | Non-nuclear | |||
Asset Retirement Obligations | |||
Additional obligations | 7 | ||
Coal-fired obligations [Member] | Non-nuclear | |||
Asset Retirement Obligations | |||
Additional obligations | $ 94 | ||
[1] | The current portions of ARO in the amounts of $161 million and $80 million as of September 30, 2015 and 2014, respectively, are included in Accounts payable and accrued liabilities. |
Debt and Other Obligations De73
Debt and Other Obligations Debt and Other Obligations - General (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2015USD ($)Types_of_bondstests | Sep. 30, 2014USD ($) | |
Debt Instrument | ||
Other Long-term Debt | $ 1,407 | $ 1,425 |
Debt ceiling | $ 30,000 | |
Number of types of bonds outstanding | Types_of_bonds | 2 | |
Power bonds years to maturity - low end of range | 1 year | |
Power bonds years to maturity - high end of range | 50 years | |
Discount notes years to maturity - high end of range | 1 year | |
Number of bond tests | tests | 2 | |
Time period for meeting the bondholder protection test | 5 years |
Debt and Other Obligations De74
Debt and Other Obligations Debt and Other Obligations - Secured Debt of VIEs (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 09, 2013 | Jan. 17, 2012 |
Debt Instrument | ||||
Membership interests of VIE subject to mandatory redemption | $ 47 | $ 50 | $ 40 | |
Long-term debt of variable interest entities (including current maturities) | $ 1,407 | $ 1,425 | ||
SCCG | ||||
Debt Instrument | ||||
Face Amount | $ 360 | |||
Interest rate | 3.846% | |||
JSCCG | ||||
Debt Instrument | ||||
Face Amount | $ 900 | |||
Interest rate | 4.626% | |||
Holdco | ||||
Debt Instrument | ||||
Face Amount | $ 100 | |||
Interest rate | 7.10% | |||
Holdco balloon payment upon maturity | $ 10 |
Debt and Other Obligations De75
Debt and Other Obligations Debt and Other Obligations - Short-Term Debt (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Short-term Debt | |||
Short-term debt, weighted average interest rate | 0.055% | 0.002% | 0.042% |
Short-term debt, maximum amount outstanding during period | $ 2.6 | $ 2.4 | $ 3.3 |
Short-term debt, average amount outstanding | $ 1.4 | $ 1.7 | $ 1.9 |
Weighted average interest rates during period | 0.051% | 0.051% | 0.078% |
Debt and Other Obligations De76
Debt and Other Obligations Debt and Other Obligations - Put and Call Options (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($)Rate_resetsBond_issuesPARRS_issuesBasis_points | |
Debt Instrument | |
Amount of redeemable bond issues outstanding | $ 456 |
Call price | 100.00% |
Bond issues with survivor's option | Bond_issues | 12 |
Bonds outstanding with survivor's option | $ 316 |
Number of issues of Putable Automatic Rate Reset Securities outstanding | PARRS_issues | 2 |
Fixed-rate period for coupon rate reset on PARRS | 5 years |
Average time period | 5 days |
PARRS 1998 Series D Bond | |
Debt Instrument | |
Amount of redeemable bond issues outstanding | $ 274 |
Debt Instrument, Basis Point Spread on Variable Rate | Basis_points | 94 |
Number of rate resets | Rate_resets | 7 |
PARRS interest rate prior to rate reset | 6.75% |
PARRS interest rate after rate reset | 3.55% |
Amount of bonds redeemed | $ 301 |
PARRS 1999 Series A Bond | |
Debt Instrument | |
Amount of redeemable bond issues outstanding | $ 232 |
Debt Instrument, Basis Point Spread on Variable Rate | Basis_points | 84 |
Number of rate resets | Rate_resets | 6 |
PARRS interest rate prior to rate reset | 6.50% |
PARRS interest rate after rate reset | 3.36% |
Amount of bonds redeemed | $ 293 |
Debt and Other Obligations De77
Debt and Other Obligations Debt and Other Obligations - Debt Securities Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Debt Instrument | ||||
Issues of power bonds | $ 973 | $ 989 | $ 2,122 | |
Discount on debt issues | (27) | (11) | ||
Total | 1,212 | 395 | ||
Redemptions/Maturities of variable interest entities | 32 | 30 | 13 | |
Redemptions/Maturities of power bonds | $ 1,180 | 365 | $ 2,358 | |
2014 Series A | ||||
Debt Instrument | ||||
Percent of par value | 98.94% | |||
2015 Series A | ||||
Debt Instrument | ||||
Percent of par value | 97.31% | |||
Debt of variable interest entities | ||||
Debt Instrument | ||||
Redemptions/Maturities of variable interest entities | [1] | $ 32 | 30 | |
Electronotes | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | 62 | 335 | |
1998 Series D | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | 50 | 0 | |
1999 Series A | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | 38 | 0 | |
2005 Series B | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | 1,000 | 0 | |
2009 Series A | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | 3 | 4 | |
2009 Series B | ||||
Debt Instrument | ||||
Redemptions/Maturities of power bonds | [1] | $ 27 | 26 | |
Total | ||||
Debt Instrument | ||||
Percent of par value | 100.00% | |||
2014 Series A | ||||
Debt Instrument | ||||
Issues of power bonds | [2] | $ 0 | 1,000 | |
2015 Series A | ||||
Debt Instrument | ||||
Issues of power bonds | [3] | 1,000 | 0 | |
Total | ||||
Debt Instrument | ||||
Total | $ 973 | $ 989 | ||
[1] | All redemptions were at 100 percent of par. | |||
[2] | The 2014 Series A bonds were issued at 98.94 percent of par. | |||
[3] | The 2015 Series A bonds were issued at 97.31 percent of par. |
Debt and Other Obligations De78
Debt and Other Obligations Debt and Other Obligations - Debt Outstanding (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($)Electronotes | Sep. 30, 2014USD ($) | ||
Short-term debt | |||
Short-term debt, net of discounts | $ 1,034 | $ 596 | |
Current maturities of long-term debt of variable interest entities | 33 | 32 | |
Current maturities of power bonds | 32 | 1,032 | |
Total current debt outstanding, net | 1,099 | 1,660 | |
Long-term debt | |||
Unamortized discount, premiums and other | (108) | (89) | |
Long-term debt of variable interest entities | 1,246 | 1,279 | |
Total long-term debt, net | 23,930 | 23,227 | |
Long-term power bonds, net | 22,684 | 21,948 | |
Long-term power bonds | [1] | 22,792 | 22,037 |
Current maturities of power bonds | 32 | 1,032 | |
Foreign currency exchange loss | $ 21 | (44) | |
Number of issues with partial maturities | Electronotes | 1 | ||
880591DS8 | |||
Debt Instrument | |||
Maturity | Dec. 15, 2016 | ||
Coupon rate | 4.875% | ||
Long-term debt | |||
Long-term power bonds, net | $ 524 | 524 | |
Electronotes | |||
Long-term debt | |||
Long-term power bonds, net | [2] | $ 325 | 387 |
Maturity date - earliest | May 15, 2020 | ||
Maturity date - latest | Feb. 15, 2043 | ||
Coupon rate - minimum | 2.375% | ||
Coupon rate - maximum | 4.375% | ||
Call date - earliest | Feb. 15, 2015 | ||
Call date - latest | Feb. 15, 2018 | ||
880591EE8 | |||
Debt Instrument | |||
Maturity | Nov. 15, 2015 | ||
Coupon rate | 2.25% | ||
Long-term debt | |||
Long-term power bonds, net | [3] | $ 0 | 2 |
880591EA6 | |||
Debt Instrument | |||
Maturity | Jul. 18, 2017 | ||
Coupon rate | 5.50% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591CU4 | |||
Debt Instrument | |||
Maturity | Dec. 15, 2017 | ||
Coupon rate | 6.25% | ||
Long-term debt | |||
Long-term power bonds, net | $ 650 | 650 | |
880591EC2 | |||
Debt Instrument | |||
Maturity | Apr. 1, 2018 | ||
Coupon rate | 4.50% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591EQ1 | |||
Debt Instrument | |||
Maturity | Oct. 15, 2018 | ||
Coupon rate | 1.75% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591EL2 | |||
Debt Instrument | |||
Maturity | Feb. 15, 2021 | ||
Coupon rate | 3.875% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,500 | 1,500 | |
880591DC3 | |||
Debt Instrument | |||
Maturity | Jun. 7, 2021 | ||
Coupon rate | [4] | 5.805% | |
Long-term debt | |||
Long-term power bonds, net | $ 303 | 324 | |
880591EN8 | |||
Debt Instrument | |||
Maturity | Aug. 15, 2022 | ||
Coupon rate | 1.875% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591ER9 | |||
Debt Instrument | |||
Maturity | Sep. 15, 2024 | ||
Coupon rate | 2.875% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591CJ9 | |||
Debt Instrument | |||
Maturity | Nov. 1, 2025 | ||
Coupon rate | 6.75% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,350 | 1,350 | |
880,591,300 | |||
Debt Instrument | |||
Maturity | Jun. 1, 2028 | ||
Coupon rate | 3.55% | ||
Long-term debt | |||
Long-term power bonds, net | [5] | $ 274 | 324 |
880,591,409 | |||
Debt Instrument | |||
Maturity | May 1, 2029 | ||
Coupon rate | 3.36% | ||
Long-term debt | |||
Long-term power bonds, net | [5] | $ 232 | 270 |
880591DM1 | |||
Debt Instrument | |||
Maturity | May 1, 2030 | ||
Coupon rate | 7.125% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591DP4 | |||
Debt Instrument | |||
Maturity | Jun. 7, 2032 | ||
Coupon rate | [4] | 6.587% | |
Long-term debt | |||
Long-term power bonds, net | $ 378 | 406 | |
880591DV1 | |||
Debt Instrument | |||
Maturity | Jul. 15, 2033 | ||
Coupon rate | 4.70% | ||
Long-term debt | |||
Long-term power bonds, net | $ 472 | 472 | |
880591EF5 | |||
Debt Instrument | |||
Maturity | Jun. 15, 2034 | ||
Coupon rate | 3.77% | ||
Long-term debt | |||
Long-term power bonds, net | [3] | $ 360 | 388 |
880591DX7 | |||
Debt Instrument | |||
Maturity | Jun. 15, 2035 | ||
Coupon rate | 4.65% | ||
Long-term debt | |||
Long-term power bonds, net | $ 436 | 436 | |
880591CK6 | |||
Debt Instrument | |||
Maturity | Apr. 1, 2036 | ||
Coupon rate | 5.98% | ||
Long-term debt | |||
Long-term power bonds, net | $ 121 | 121 | |
880591CS9 | |||
Debt Instrument | |||
Maturity | Apr. 1, 2036 | ||
Coupon rate | 5.88% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,500 | 1,500 | |
880591CP5 | |||
Debt Instrument | |||
Maturity | Jan. 15, 2038 | ||
Coupon rate | 6.15% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591ED0 | |||
Debt Instrument | |||
Maturity | Jun. 15, 2038 | ||
Coupon rate | 5.50% | ||
Long-term debt | |||
Long-term power bonds, net | $ 500 | 500 | |
880591EH1 | |||
Debt Instrument | |||
Maturity | Sep. 15, 2039 | ||
Coupon rate | 5.25% | ||
Long-term debt | |||
Long-term power bonds, net | $ 2,000 | 2,000 | |
880591EP3 | |||
Debt Instrument | |||
Maturity | Dec. 15, 2042 | ||
Coupon rate | 3.50% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591DU3 | |||
Debt Instrument | |||
Maturity | Jun. 7, 2043 | ||
Coupon rate | [4] | 4.962% | |
Long-term debt | |||
Long-term power bonds, net | $ 227 | 243 | |
880591CF7 | |||
Debt Instrument | |||
Maturity | Jul. 15, 2045 | ||
Coupon rate | 6.235% | ||
Long-term debt | |||
Long-term power bonds, net | $ 140 | 140 | |
Call date - earliest | Jul. 15, 2020 | ||
880591EB4 | |||
Debt Instrument | |||
Maturity | Jan. 15, 2048 | ||
Coupon rate | 4.875% | ||
Long-term debt | |||
Long-term power bonds, net | $ 500 | 500 | |
880591DZ2 | |||
Debt Instrument | |||
Maturity | Apr. 1, 2056 | ||
Coupon rate | 5.375% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591EJ7 | |||
Debt Instrument | |||
Maturity | Sep. 15, 2060 | ||
Coupon rate | 4.625% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 1,000 | |
880591ES7 | |||
Debt Instrument | |||
Maturity | Sep. 15, 2065 | ||
Coupon rate | 4.25% | ||
Long-term debt | |||
Long-term power bonds, net | $ 1,000 | 0 | |
880591EE8 | |||
Debt Instrument | |||
Maturity | Nov. 15, 2015 | ||
Coupon rate | 2.25% | ||
Long-term debt | |||
Current maturities of power bonds | $ 2 | 3 | |
880591EF5 | |||
Debt Instrument | |||
Maturity | Dec. 15, 2015 | ||
Coupon rate | 3.77% | ||
Long-term debt | |||
Current maturities of power bonds | $ 27 | 26 | |
880591DY5 | |||
Debt Instrument | |||
Maturity | Jun. 15, 2015 | ||
Coupon rate | 4.375% | ||
Long-term debt | |||
Current maturities of power bonds | $ 0 | 1,000 | |
88059TEL1 | |||
Debt Instrument | |||
Maturity | Nov. 15, 2015 | ||
Coupon rate | 2.65% | ||
Long-term debt | |||
Current maturities of power bonds | $ 3 | $ 3 | |
[1] | Includes net exchange gain (loss) from currency transactions of $21 million at September 30, 2015 and $(44) million at September 30, 2014. | ||
[2] | Includes one electronotes® issue (88059TEL1) with partial maturities of principal for each required annual payment. | ||
[3] | These Bonds include partial maturities of principal for each required annual payment. | ||
[4] | The coupon rate represents TVA’s effective interest rate. | ||
[5] | TVA PARRS, CUSIP numbers 880591300 and 880591409, may be redeemed under certain conditions. See Put and Call Options above. |
Debt and Other Obligations De79
Debt and Other Obligations Debt and Other Obligations - Maturities Due (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Debt Instrument | ||
2,016 | $ 65 | |
2,017 | 1,590 | |
2,018 | 1,718 | |
2,019 | 1,070 | |
2,020 | 70 | |
Thereafter | 19,611 | |
Total | 24,124 | |
Foreign currency exchange loss | 21 | $ (44) |
Unamortized discount, premiums and other | 108 | 89 |
Short-term debt, net of discounts | $ 1,034 | $ 596 |
Debt and Other Obligations De80
Debt and Other Obligations Debt and Other Obligations - Credit Facility Agreements (Details) $ in Millions | Sep. 30, 2015USD ($)Credit_facilities | Sep. 30, 2014USD ($) |
Credit Facility Agreements | ||
Current borrowing capacity | $ 150 | |
Line of Credit | ||
Credit Facility Agreements | ||
Current borrowing capacity | 150 | |
Credit facility agreements borrowings outstanding | 0 | |
Revolving Credit Facilities | ||
Credit Facility Agreements | ||
Current borrowing capacity | 2,500 | |
Credit facility agreements borrowings outstanding | $ 0 | $ 0 |
Number of revolving credit facilities | Credit_facilities | 3 | |
Revolving credit facility 1 | $ 1,000 | |
Revolving credit facility 3 | 500 | |
Long-term Line of Credit, Borrowings 3 | 0 | |
Line of Credit Facility, Remaining Borrowing Capacity 3 | 0 | |
Long-term Line of Credit, Borrowings 1 | 0 | |
Line of Credit Facility, Remaining Borrowing Capacity 1 | 700 | |
Revolving Credit Facility 2 | 1,000 | |
Long-term Line of Credit, Borrowings 2 | 0 | |
Line of Credit Facility, Remaining Borrowing Capacity 2 | 700 | |
Line of Credit Facility, Remaining Borrowing Capacity | 1,400 | |
Letter of Credit | ||
Credit Facility Agreements | ||
Amount of letters of credit outstanding | 1,100 | $ 1,000 |
Letters of Credit Outstanding, Amount 3 | 500 | |
Letters of Credit Outstanding, Amount 1 | 300 | |
Letter of Credit Outstanding, Amount 2 | $ 300 |
Debt and Other Obligations De81
Debt and Other Obligations Debt and Other Obligations - Lease/Leasebacks (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2003USD ($)Units | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Lease/Leasebacks [Abstract] | |||
Proceeds prior to 2004 for CTs | $ 945 | ||
Leaseback transaction, number of units | Units | 24 | ||
Proceeds in 2003 for QTEs | $ 389 | ||
CT and QTE outstanding leaseback obligation | $ 616 | $ 691 |
Accumulated Other Comprehensi82
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Equity [Abstract] | |||
Reclassification on cash flow hedges from AOCI to interest expense | $ 65 | $ (2) | $ (1) |
Risk Management Activities an83
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | |||
Net unrealized gain (loss) on future cash flow hedges | $ (72,000,000) | $ 4,000,000 | $ 78,000,000 |
Reclassification to earnings from cash flow hedges | 65,000,000 | (2,000,000) | $ (1,000,000) |
Ineffective portion excluded from testing | 0 | $ 0 | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ (14,000,000) |
Risk Management Activities an84
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) mmBtu in Millions, Tons in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($)mmBtuTonsContracts | ||
Derivative | |||
Change in Unrealized gains (losses) on Interest Rate Derivatives | $ 279,000,000 | $ 149,000,000 | |
Unrealized gains/losses on derivatives | 0 | ||
FTP transaction limit | $ 130,000,000 | ||
Maximum hedge volume | 75.00% | ||
Market value limitation of outstanding construction materials hedging transactions | $ 100,000,000 | ||
Portfolio value at risk limit for foreign currency transactions | 5,000,000 | ||
Interest Rate Swap | |||
Derivative | |||
Amount of gain (loss) recognized in income on derivatives | [1] | (114,000,000) | (114,000,000) |
Commodity Contract Derivatives | |||
Derivative | |||
Amount of gain (loss) recognized in income on derivatives | [2] | 0 | (64,000,000) |
Fair value | (97,000,000) | (96,000,000) | |
Commodity Derivatives Under Financial Trading Program | |||
Derivative | |||
Amount of gain (loss) recognized in income on derivatives | [2] | (98,000,000) | (43,000,000) |
Fair value | [3] | $ (116,000,000) | $ (103,000,000) |
Coal Contract Derivatives | |||
Derivative | |||
Number of contracts | 14 | 24 | |
Notional amount | 19,000,000 | 31 | |
Fair value | $ (98,000,000) | $ (86,000,000) | |
Natural Gas | |||
Derivative | |||
Number of contracts | 33 | 46 | |
Notional amount | 134,000,000 | 62 | |
Fair value | $ 1,000,000 | $ (10,000,000) | |
Maximum | Coal Contract Derivatives | |||
Derivative | |||
Derivative, Term of Contract | 3 years | 3 years | |
Coal Contract Derivatives | |||
Derivative | |||
Fair value | $ 0 | ||
[1] | Generally, TVA maintains a level of outstanding discount notes equal to or greater than the notional amount of the interest rate swaps. However, in September 2015 TVA issued long-term Bonds in anticipation of the maturity of other long-term debt, and used the proceeds to pay down discount notes, which caused the balance of discount notes outstanding at September 30, 2015, to temporarily fall below the notional amount of the interest rate swaps. | ||
[2] | 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 years ended September 30, 2015 and 2014. | ||
[3] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $89 million and $69 million at September 30, 2015 and September 30, 2014, respectively, are recorded in TVA's margin cash accounts in Other current assets. These derivatives are transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. |
Risk Management Activities an85
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Mark-to-Market Values of TVA Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivatives, Fair Value | |||
Derivative Liability, Fair Value | $ 1,839 | $ 1,517 | |
Commodity derivatives under FTP | Other current assets | |||
Derivatives, Fair Value | |||
Derivative Liability, Fair Value | 89 | 69 | |
200 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (41) | (15) | |
250 million Sterling currency swap | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 25 | 56 | |
150 million Sterling currency swap | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 8 | ||
150 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (6) | ||
$1.0 billion notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (1,177) | (987) | |
$476 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (438) | (349) | |
$42 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (12) | (12) | |
Commodity contract derivatives | |||
Derivatives, Fair Value | |||
Fair value | (97) | (96) | |
Commodity contract derivatives | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 1 | ||
Commodity contract derivatives | Other current assets | |||
Derivatives, Fair Value | |||
Fair value | 1 | ||
Commodity contract derivatives | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (17) | (17) | |
Commodity contract derivatives | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (81) | (80) | |
Derivatives Under FTP | |||
Derivatives, Fair Value | |||
Fair value | [1] | (116) | (103) |
Derivatives Under FTP | Other current assets | |||
Derivatives, Fair Value | |||
Fair value | (89) | (69) | |
Derivatives Under FTP | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (10) | (14) | |
Derivatives Under FTP | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | $ (17) | $ (20) | |
[1] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $89 million and $69 million at September 30, 2015 and September 30, 2014, 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 an86
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Currency Swaps Outstanding (Details) £ in Millions | 12 Months Ended |
Sep. 30, 2015GBP (£)Bond_issues | |
Derivative | |
Number of British pound sterling denominated bond transactions | Bond_issues | 3 |
1999 Currency Swap Contract | |
Derivative | |
Effective Date of Currency Swap Contract | 1,999 |
Associated TVA bond issues currency exposure | £ 200 |
Expiration Date of Swap | 2,021 |
Overall effective cost to TVA | 5.81% |
2001 Currency Swap Contract | |
Derivative | |
Effective Date of Currency Swap Contract | 2,001 |
Associated TVA bond issues currency exposure | £ 250 |
Expiration Date of Swap | 2,032 |
Overall effective cost to TVA | 6.59% |
2003 Currency Swap Contract | |
Derivative | |
Effective Date of Currency Swap Contract | 2,003 |
Associated TVA bond issues currency exposure | £ 150 |
Expiration Date of Swap | 2,043 |
Overall effective cost to TVA | 4.96% |
Risk Management Activities an87
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Derivatives Under Financial Trading Program (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($)mmBtu | |
Derivative | ||
FTP transaction limit | $ 130 | |
Natural Gas | ||
Derivative | ||
Decrease (increase) in fuel expense | (79) | $ (34) |
Decrease (increase) in purchased power expense | (20) | (11) |
Fuel Oil and Crude Oil Total Contracts | ||
Derivative | ||
Decrease (increase) in fuel expense | $ 1 | $ 2 |
Natural Gas Swap | ||
Derivative | ||
Notional amount | 51,495,000 | 102,227,500 |
Unrealized gains (losses) deferred as regulatory liabilities (assets) | $ (116) | $ (103) |
Coal Contract Total Contracts | ||
Derivative | ||
Unrealized gains (losses) deferred as regulatory liabilities (assets) | 0 | |
Closed Derivative Contracts | ||
Derivative | ||
Unrealized gains (losses) deferred as regulatory liabilities (assets) | $ (11) | $ (5) |
Swap contracts | ||
Derivative | ||
Remaining terms | 3 years |
Risk Management Activities an88
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Collateral (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2015USD ($)Customers | Sep. 30, 2014USD ($)Customers | |
Derivative | ||
Securities Borrowed, Collateral, Obligation to Return Cash | $ 15 | $ 19 |
Credit of Customers | ||
Derivative | ||
Number of customers that represent the percent of outstanding accounts receivable | Customers | 3 | 3 |
Collateral | ||
Derivative | ||
Aggregate fair value of derivative instruments with credit-risk related contingent features that were in a liability position | $ 1,700 | |
Collateral obligations | 1,100 | |
Collateral already posted | 1,100 | |
Likely cash collateral obligation increase if credit is downgraded | $ 22 |
Risk Management Activities an89
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Counterparty Credit Risk (Details) | Sep. 30, 2015USD ($)MegawattsCustomersmerchants | Apr. 14, 2015Megawatts | Sep. 30, 2014Customers |
Derivative | |||
Counterparty credit rating outlier | $ | $ 1 | ||
Number of active future commission merchants | merchants | 2 | ||
Megawatts | 700 | ||
Credit of Customers | |||
Derivative | |||
Number of customers that represent the percent of outstanding accounts receivable | Customers | 3 | 3 | |
Percent of total outstanding accounts receivables by customers | 27.00% | 27.00% | |
Power Purchase Agreement | |||
Derivative | |||
Megawatts | 440 |
Risk Management Activities an90
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Offsetting of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | |
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets, subject to master netting or similar arrangements | $ 74 | $ 115 | |
Gross Amounts Offset in the Balance Sheet | (49) | (115) | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 26 | 1 | [2] |
Total derivatives not subject to master netting or similar arrangement | 1 | 1 | [2] |
Total Gross Amounts of Recognized Assets | 75 | 116 | |
Offsetting Liabilities [Line Items] | |||
Securities Borrowed, Amount Offset Against Collateral | 0 | ||
Gross Amounts of Recognized Liabilities, Subject to Master Netting or Similar Arrangements | 1,839 | 1,517 | |
Gross Amounts Offset in the Balance Sheet | (138) | (120) | [1] |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,799 | 1,494 | [2] |
Total derivatives not subject to master netting or similar arrangement | 98 | 97 | [2] |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 1,937 | 1,614 | |
Currency Swap | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets, subject to master netting or similar arrangements | 25 | 64 | |
Gross Amounts Offset in the Balance Sheet | 0 | (64) | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 25 | 0 | [2] |
Offsetting Liabilities [Line Items] | |||
Gross Amounts of Recognized Liabilities, Subject to Master Netting or Similar Arrangements | 47 | 15 | [3] |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | [1],[3] |
Net Amounts of Liabilities Presented in the Balance Sheet | 47 | 15 | [2],[3] |
Interest Rate Contract | |||
Offsetting Liabilities [Line Items] | |||
Gross Amounts of Recognized Liabilities, Subject to Master Netting or Similar Arrangements | 1,627 | 1,348 | [3] |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | [1],[3] |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,627 | 1,348 | [2],[3] |
Commodity derivatives under FTP | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets, subject to master netting or similar arrangements | 49 | 51 | |
Gross Amounts Offset in the Balance Sheet | (49) | (51) | [1] |
Net Amounts of Assets Presented in the Balance Sheet | 0 | 0 | [2] |
Offsetting Liabilities [Line Items] | |||
Gross Amounts of Recognized Liabilities, Subject to Master Netting or Similar Arrangements | 165 | 154 | |
Gross Amounts Offset in the Balance Sheet | (138) | (120) | [1] |
Net Amounts of Liabilities Presented in the Balance Sheet | 27 | 34 | [2] |
Total derivatives subject to master netting or similar arrangement [Member] | |||
Offsetting Assets [Line Items] | |||
Net Amounts of Assets Presented in the Balance Sheet | 25 | 0 | [2] |
Offsetting Liabilities [Line Items] | |||
Net Amounts of Liabilities Presented in the Balance Sheet | 1,701 | 1,397 | [2] |
Letter of Credit | |||
Offsetting Liabilities [Line Items] | |||
Amount of letters of credit outstanding | $ 1,100 | $ 1,000 | |
[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 $1.1 billion and $1.0 billion were posted as collateral at September 30, 2015 and September 30, 2014, 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. TVA held $15 million and $19 million cash collateral in excess of collateral requirements at September 30, 2015 and September 30, 2014, respectively. Cash collateral held in excess of collateral requirements is recorded in Restricted cash and investments with a corresponding obligation of the same amount recorded in Accounts payable and accrued liabilities. |
Risk Management Activities an91
Risk Management Activities and Derivative Transactions Risk Management Activities and Derivative Transactions - Other Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Derivative | ||
Forward Contract Derivative Liability, at Fair Value | $ 59 | |
Forward Contract Derivative Asset, at Fair Value | $ 3 | |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Liability, at Fair Value | $ 59 | |
Forward Contract Derivative Asset, at Fair Value | $ 3 |
Fair Value Measurements Fair 92
Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions | 12 Months Ended | |
Sep. 30, 2015USD ($)Redemption_optionsPrices | Sep. 30, 2014USD ($) | |
Investment Gains (Losses) | ||
Investment fund securities classified as trading and measured at fair value | $ 2,000 | |
Period of time where the investor contributes capital to an investment in a private partnership - minimum | 3 years | |
Period of time where the investor contributes capital to an investment in a private partnership - maximum | 4 years | |
Minimum investment period | 10 years | |
NDT unfunded commitments related to private partnerships | $ 89 | |
Number of redemption or limited redemption options | Redemption_options | 0 | |
Number of readily available quoted exchange prices for the investments | Prices | 0 | |
SERP | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | $ (4) | $ 1 |
LTDCP | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | (2) | 0 |
NDT | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | (47) | 35 |
ART | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | (17) | $ 15 |
Maximum | ||
Investment Gains (Losses) | ||
Equity investments not required to be measured at fair value | $ 1 |
Fair Value Measurements Fair 93
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Sep. 30, 2015USD ($) |
Nonperformance Risk | |
Derivative credit valuation adjustment, assets | $ 1 |
Derivative credit valuation adjustment, liabilities | $ 1 |
Fair Value Measurements Fair 94
Fair Value Measurements Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | ||
Investments | ||||
Equity securities | $ 166 | $ 162 | ||
Debt securities | ||||
U.S. government corporations and agencies | 234 | 82 | ||
Corporate debt securities | 225 | 290 | ||
Residential mortgage-backed securities | 17 | 14 | ||
Commercial mortgage-backed securities | 7 | 7 | ||
Collateralized debt obligations | 29 | 29 | ||
Institutional mutual funds | 91 | 101 | ||
Private partnerships measured at net asset value | 240 | [1] | 214 | [2] |
Commingled funds measured at net asset value | 1,061 | [1] | 1,079 | [2] |
Total investments | 2,011 | 1,981 | ||
Currency swaps | 25 | [3] | 0 | [4] |
Commodity contract derivatives | 1 | 1 | ||
Swap contracts | 0 | [3] | 0 | |
Total | 2,037 | 1,982 | ||
Forward Contract Derivative Asset, at Fair Value | 3 | |||
Forward Contract Derivative Liability, at Fair Value | 59 | |||
Liabilities [Abstract] | ||||
Currency swaps | 47 | [3] | 15 | [4] |
Interest rate swaps | 1,627 | 1,348 | ||
Commodity contract derivatives | 98 | 97 | ||
Swap contracts | 27 | [3] | 34 | [4] |
Total | 1,799 | 1,494 | ||
Fair Value, Inputs, Level 1 | ||||
Investments | ||||
Equity securities | 166 | 162 | ||
Debt securities | ||||
U.S. government corporations and agencies | 203 | 46 | ||
Corporate debt securities | 0 | 0 | ||
Residential mortgage-backed securities | 0 | 0 | ||
Commercial mortgage-backed securities | 0 | 0 | ||
Collateralized debt obligations | 0 | 0 | ||
Institutional mutual funds | 91 | 101 | ||
Private partnerships measured at net asset value | 0 | [1] | 0 | [2] |
Commingled funds measured at net asset value | 0 | [1] | 0 | [2] |
Total investments | 460 | 309 | ||
Currency swaps | 0 | [3] | 0 | [4] |
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 0 | [3] | 0 | |
Total | 460 | 309 | ||
Forward Contract Derivative Asset, at Fair Value | 0 | |||
Forward Contract Derivative Liability, at Fair Value | 0 | |||
Liabilities [Abstract] | ||||
Currency swaps | 0 | [3] | 0 | [4] |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 0 | [3] | 0 | [4] |
Total | 0 | 0 | ||
Fair Value, Inputs, Level 2 | ||||
Investments | ||||
Equity securities | 0 | 0 | ||
Debt securities | ||||
U.S. government corporations and agencies | 31 | 36 | ||
Corporate debt securities | 225 | 290 | ||
Residential mortgage-backed securities | 17 | 14 | ||
Commercial mortgage-backed securities | 7 | 7 | ||
Collateralized debt obligations | 29 | 29 | ||
Institutional mutual funds | 0 | 0 | ||
Private partnerships measured at net asset value | 0 | [1] | 0 | [2] |
Commingled funds measured at net asset value | 0 | [1] | 0 | [2] |
Total investments | 250 | 379 | ||
Currency swaps | 25 | [3] | 0 | [4] |
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 0 | [3] | 0 | |
Total | 275 | 379 | ||
Forward Contract Derivative Asset, at Fair Value | 3 | |||
Forward Contract Derivative Liability, at Fair Value | 59 | |||
Liabilities [Abstract] | ||||
Currency swaps | 47 | [3] | 15 | [4] |
Interest rate swaps | 1,627 | 1,348 | ||
Commodity contract derivatives | 0 | 0 | ||
Swap contracts | 27 | [3] | 34 | [4] |
Total | 1,701 | 1,397 | ||
Fair Value, Inputs, Level 3 | ||||
Investments | ||||
Equity securities | 0 | 0 | ||
Debt securities | ||||
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 | ||
Institutional mutual funds | 0 | 0 | ||
Private partnerships measured at net asset value | 0 | [1] | 0 | [2] |
Commingled funds measured at net asset value | 0 | [1] | 0 | [2] |
Total investments | 0 | 0 | ||
Currency swaps | 0 | [3] | 0 | [4] |
Commodity contract derivatives | 1 | 1 | ||
Swap contracts | 0 | [3] | 0 | |
Total | 1 | 1 | ||
Forward Contract Derivative Asset, at Fair Value | 0 | |||
Forward Contract Derivative Liability, at Fair Value | 0 | |||
Liabilities [Abstract] | ||||
Currency swaps | 0 | [3] | 0 | [4] |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 98 | 97 | ||
Swap contracts | 0 | [3] | 0 | [4] |
Total | $ 98 | $ 97 | ||
[1] | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. | |||
[2] | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. | |||
[3] | 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, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. | |||
[4] | 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 any cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts Payable and accrued liabilities. See Note 16 — Offsetting of Derivative Assets and Liabilities. |
Fair Value Measurements Fair 95
Fair Value Measurements Fair Value Measurements - Fair Value Measurements Using Significant Unobservable Inputs (Details) tons-per-year in Billions | 12 Months Ended | |
Sep. 30, 2015USD ($)tons-per-year | Sep. 30, 2014USD ($)Contractstons-per-year | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Commodity contract derivatives | $ 1,000,000 | $ 1,000,000 |
Commodity contract derivatives | $ 98,000,000 | $ 97,000,000 |
Liabilities | ||
Number of contracts | Contracts | 2 | |
Minimum | ||
Assets | ||
Fair value inputs, counterparty credit risk | 2.00% | |
Fair value measurements tons per year | tons-per-year | 0.8 | 1 |
Price per ton | $ 10.64 | $ 11.24 |
Liabilities | ||
Fair value measurements tons per year | tons-per-year | 0.8 | 1 |
Price per ton | $ 10.64 | $ 11.24 |
Maximum | ||
Assets | ||
Fair value inputs, counterparty credit risk | 5.00% | |
Fair value measurements tons per year | tons-per-year | 1 | 1.1 |
Price per ton | $ 103.41 | $ 67.07 |
Liabilities | ||
Fair value measurements tons per year | tons-per-year | 1 | 1.1 |
Price per ton | $ 103.41 | $ 67.07 |
Fair Value, Inputs, Level 3 | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||
Commodity contract derivatives | 1,000,000 | 1,000,000 |
Commodity contract derivatives | 98,000,000 | 97,000,000 |
Commodity Contract Derivatives | ||
Fair Value Measurements | ||
Balances at beginning of period | (96,000,000) | (140,000,000) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 33,000,000 |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | (1,000,000) | 11,000,000 |
Balances at end of period | $ (97,000,000) | $ (96,000,000) |
Fair Value Measurements Fair 96
Fair Value Measurements Fair Value Measurements - Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 09, 2013 |
Estimated Values of Financial Instruments Not Recorded at Fair Value (Level 2 Valuation) | |||
EnergyRight receivables (including current portion) | $ 162 | $ 166 | |
Loans and other long-term receivables, net (including current portion) | 117 | 81 | |
EnergyRight purchase obligation (including current portion) | 208 | 215 | |
Unfunded Loan Commitments | 9 | 18 | |
Membership interests of VIE subject to mandatory redemption (including current portion) | 47 | 50 | $ 40 |
Long-term outstanding power bonds (including current maturities), net | 25,468 | 26,889 | |
Long-term debt of variable interest entities (including current maturities) | 1,407 | 1,425 | |
Portion at Other than Fair Value Measurement | |||
Estimated Values of Financial Instruments Not Recorded at Fair Value (Level 2 Valuation) | |||
EnergyRight receivables (including current portion) | 156 | 156 | |
Loans and other long-term receivables, net (including current portion) | 129 | 92 | |
EnergyRight purchase obligation (including current portion) | 185 | 190 | |
Unfunded Loan Commitments | 0 | 0 | |
Membership interests of VIE subject to mandatory redemption (including current portion) | 37 | 39 | |
Long-term outstanding power bonds (including current maturities), net | 22,716 | 22,980 | |
Long-term debt of variable interest entities (including current maturities) | $ 1,279 | $ 1,311 |
Proprietary Capital Proprieta97
Proprietary Capital Proprietary Capital (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Appropriation Investment | |||||||||||
Amount of appropriation investment that must be repaid | $ 1,000 | $ 1,000 | |||||||||
Remaining appropriation investment | 258 | 258 | |||||||||
Balance at beginning of year | $ 6,104 | $ 5,647 | 6,104 | $ 5,647 | $ 5,326 | ||||||
Net income (loss) | 502 | $ 32 | $ 496 | 81 | $ 322 | $ (81) | $ 295 | (67) | 1,111 | 469 | 271 |
Return of power program appropriation investment | 10 | 20 | |||||||||
Return on power program appropriation investment | 5 | 4 | 7 | ||||||||
Balance at end of year | 7,203 | 6,104 | 7,203 | 6,104 | $ 5,647 | ||||||
Net proprietary capital at September 30 | $ 7,203 | $ 6,104 | $ 7,203 | $ 6,104 | |||||||
Computed average interest rate payable | 2.04% | 1.97% | 2.04% | 1.97% | 2.10% | ||||||
Nonpower Programs Appropriation Investment | |||||||||||
Appropriation Investment | |||||||||||
Balance at beginning of year | 4,351 | 4,351 | $ 4,351 | $ 4,351 | |||||||
Return of power program appropriation investment | 0 | 0 | |||||||||
Balance at end of year | $ 4,351 | $ 4,351 | 4,351 | 4,351 | $ 4,351 | ||||||
Power Program Appropriation Investment | |||||||||||
Appropriation Investment | |||||||||||
Balance at beginning of year | 258 | 268 | 258 | 268 | 288 | ||||||
Net income (loss) | 0 | 0 | 0 | ||||||||
Return of power program appropriation investment | 0 | 10 | 20 | ||||||||
Return on power program appropriation investment | 0 | 0 | 0 | ||||||||
Balance at end of year | 258 | 258 | 258 | 258 | 268 | ||||||
Power Program Retained Earnings | |||||||||||
Appropriation Investment | |||||||||||
Balance at beginning of year | 5,240 | 4,767 | 5,240 | 4,767 | 4,492 | ||||||
Net income (loss) | 1,122 | 477 | 282 | ||||||||
Return of power program appropriation investment | 0 | 0 | |||||||||
Return on power program appropriation investment | 5 | 4 | 7 | ||||||||
Balance at end of year | 6,357 | 5,240 | 6,357 | 5,240 | 4,767 | ||||||
Net proprietary capital at September 30 | 6,615 | 5,498 | 6,615 | 5,498 | |||||||
Nonpower Programs Retained Earnings | |||||||||||
Appropriation Investment | |||||||||||
Balance at beginning of year | $ (3,750) | $ (3,742) | (3,750) | (3,742) | |||||||
Net income (loss) | (11) | (8) | |||||||||
Return on power program appropriation investment | 0 | 0 | |||||||||
Balance at end of year | (3,761) | (3,750) | (3,761) | (3,750) | $ (3,742) | ||||||
Net proprietary capital at September 30 | $ 590 | $ 601 | $ 590 | 601 | |||||||
Power Program Appropriation Investment | |||||||||||
Appropriation Investment | |||||||||||
Return of power program appropriation investment | $ 10 |
Proprietary Capital Proprieta98
Proprietary Capital Proprietary Capital - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Accumulated Other Comprehensive Income (Loss) | |||
Net effect on earnings | $ 0 | $ 0 | $ 0 |
Net unrealized gain (loss) on future cash flow hedges | (72) | 4 | 78 |
Reclassification to earnings from cash flow hedges | (65) | $ 2 | $ 1 |
Reclassification to earnings from cash flow hedges in the next twelve months | $ 14 |
Other Income (Expense), Net O99
Other Income (Expense), Net Other Income (Expense), Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Other Income (Expense), Net | |||
Interest income | $ 24 | $ 23 | $ 23 |
External services | 12 | 19 | 18 |
Gains (losses) on investments | (1) | 6 | 4 |
Miscellaneous | (6) | 1 | (1) |
Total other income (expense), net | $ 29 | $ 49 | $ 44 |
Supplemental Cash Flow Infor100
Supplemental Cash Flow Information Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Supplemental Cash Flow Information | |||
Interest paid | $ 1,300 | $ 1,300 | $ 1,300 |
Interest capitalized | 214 | 175 | 168 |
Bellefonte amounts included in Construction expenditures | 162 | ||
Financing non-cash activity for capital leases | 70 | 20 | |
Accounts payable and accrued liabilities | |||
Supplemental Cash Flow Information | |||
Construction in progress and Nuclear fuel expenditures | $ 530 | $ 391 | $ 270 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) | 12 Months Ended | ||||
Dec. 31, 2015 | Sep. 30, 2015USD ($)YearsNumber_of_defined_benefit_plan_structuresplansNumber_of_defined_benefit_plan_investment_funds | Dec. 31, 2014 | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Defined Benefit Plan Disclosure | |||||
Number of defined benefit plans | 1 | ||||
Number of defined contribution plans | 1 | ||||
Number of unfunded post-retirement health care plans | plans | 2 | ||||
Number of benefit plan structures | Number_of_defined_benefit_plan_structures | 2 | ||||
Number of consecutive highest base pay years | Years | 3 | ||||
Percentage of straight-time earnings for cash balance benefit credit | 6.00% | ||||
Percentage added to consumer price index for interest credit of cash balance benefit | 3.00% | ||||
Minimum interest credit percentage for cash balance benefit | 6.00% | ||||
Maximum interest credit percentage for cash balance benefit | 10.00% | ||||
Rate of cash balance benefit credit for calendar year | 6.00% | ||||
Number of defined benefit plan investment funds | Number_of_defined_benefit_plan_investment_funds | 2 | ||||
Fixed and variable fund annual maximum contribution | $ 10,000 | ||||
Fixed fund balance interest credits after January 1, 2010 | 6.00% | ||||
Fixed fund balance credit percentage subtracted from the actuarial rate of return after January 1, 2010 | 0.50% | ||||
Fixed fund interest credit rate | 6.00% | 6.00% | |||
Fixed fund interest credit amount | $ 26,000,000 | $ 33,000,000 | |||
Defined contribution plan contribution amount | $ 36,000,000 | $ 35,000,000 | $ 34,000,000 | ||
Market-related value phase-in period number of years | Years | 3 | ||||
Original benefit structure | |||||
Defined Benefit Plan Disclosure | |||||
Defined contribution plan employer matching contribution rate | $ 0.25 | ||||
Cash Balance Benefit Structure | |||||
Defined Benefit Plan Disclosure | |||||
Defined contribution plan employer matching contribution rate | 0.75 | ||||
Defined Contribution Only | |||||
Defined Benefit Plan Disclosure | |||||
Defined contribution plan employer matching contribution rate | $ 0.75 | ||||
Defined Contribution Plan, Automatic Employer Contribution | 4.50% | ||||
Maximum | Original benefit structure | |||||
Defined Benefit Plan Disclosure | |||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 1.50% | ||||
Maximum | Cash Balance Benefit Structure | |||||
Defined Benefit Plan Disclosure | |||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | ||||
Maximum | Defined Contribution Only | |||||
Defined Benefit Plan Disclosure | |||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | ||||
Scenario, Forecast [Member] | |||||
Defined Benefit Plan Disclosure | |||||
Rate of cash balance benefit credit for calendar year | 6.00% |
Benefit Plans Obligations and F
Benefit Plans Obligations and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Defined Benefit Plan, Funded Status of Plan [Abstract] | ||||
Amount of defined benefit plan actuarial gain (loss) from change in COLA | $ 232 | |||
Pension Benefits | ||||
Change in benefit obligation | ||||
Benefit obligation | 12,824 | $ 12,265 | $ 11,471 | |
Service cost | 130 | 130 | 154 | |
Interest cost | 540 | 558 | 468 | |
Plan participants' contributions | 25 | 28 | ||
Amendments | 0 | 2 | ||
Actuarial loss (gain) | 556 | 722 | ||
Net transfers from variable fund/401(k) plan | 11 | 13 | ||
Expenses paid | (6) | (6) | ||
Benefits paid | (697) | (653) | ||
Amount of defined benefit plan actuarial gain (loss) from change in mortality assumption | 518 | |||
Change in plan assets | ||||
Fair value of net plan assets | 6,797 | 7,507 | $ 7,221 | |
Actual return on plan assets | (325) | 648 | ||
Employer contributions | [1] | 282 | 256 | |
Defined Benefit Plan, Funded Status of Plan [Abstract] | ||||
Funded status | $ (6,027) | $ (4,758) | ||
Discount rate | 4.50% | 4.45% | 5.00% | |
Amount of defined benefit plan actuarial gain (loss) from discount rate change | $ 79 | $ (729) | ||
Amount of defined benefit plan actuarial gain (loss) from reduction in workforce | (36) | |||
Amount of defined benefit plan actuarial gain (loss) from plan demographic experience changes | 349 | |||
Amount of defined benefit plan actuarial gain (loss) from retirement rate assumption change | 88 | |||
Other Post-retirement Benefits | ||||
Change in benefit obligation | ||||
Benefit obligation | 657 | 652 | $ 656 | |
Service cost | 16 | 18 | 24 | |
Interest cost | 29 | 32 | 31 | |
Collections | [2] | 94 | 93 | |
Amendments | 0 | 0 | ||
Actuarial loss (gain) | 3 | (21) | ||
Net transfers from variable fund/401(k) plan | 0 | 0 | ||
Expenses paid | 0 | 0 | ||
Benefits paid | (137) | (126) | ||
Amount of defined benefit plan actuarial gain (loss) from change in mortality assumption | 21 | |||
Change in plan assets | ||||
Fair value of net plan assets | 0 | 0 | $ 0 | |
Actual return on plan assets | 0 | 0 | ||
Employer contributions | [1] | 43 | 33 | |
Defined Benefit Plan, Funded Status of Plan [Abstract] | ||||
Funded status | $ (657) | $ (652) | ||
Discount rate | 4.65% | 4.50% | 5.05% | |
Amount of defined benefit plan actuarial gain (loss) from discount rate change | $ 13 | $ 43 | ||
Amount of defined benefit plan actuarial gain (loss) from reduction in workforce | (17) | |||
Amount of defined benefit plan actuarial gain (loss) from plan demographic experience changes | 20 | (64) | ||
Amount of defined benefit plan actuarial gain (loss) from updated capita claims costs and retiree contributions | $ 30 | |||
Amount of defined benefit plan actuarial gain (loss) from retirement rate assumption change | $ 16 | |||
[1] | Other Post-Retirement Benefits Employer contributions are reduced by federal reinsurance payments and provider discounts and rebates. | |||
[2] | Collections include retiree contributions as well as federal reinsurance payments and provider discounts and rebates. |
Benefit Plans Amounts Recognize
Benefit Plans Amounts Recognized on TVA's Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure | |||
Regulatory assets | $ 10,418 | $ 8,994 | |
Accounts payable and accrued liabilities | (2,127) | (2,050) | |
Post-retirement and post-employment benefit obligations | (7,107) | (5,839) | |
Pension Benefits | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan amounts deferred as regulatory assets actions by regulators | 228 | 0 | |
Regulatory assets | 5,425 | 4,157 | |
Accounts payable and accrued liabilities | (6) | (5) | |
Post-retirement and post-employment benefit obligations | [1] | (6,021) | (4,753) |
Other Post-retirement Benefits | |||
Defined Benefit Plan Disclosure | |||
Defined benefit plan amounts deferred as regulatory assets actions by regulators | 0 | 0 | |
Regulatory assets | 140 | 140 | |
Accounts payable and accrued liabilities | (37) | (38) | |
Post-retirement and post-employment benefit obligations | [1] | (620) | (614) |
Pension and Other Postretirement Defined Benefit Plans, Liabilities, Noncurrent [Member] | |||
Defined Benefit Plan Disclosure | |||
Postemployment benefits liability, noncurrent | $ 465 | $ 472 | |
[1] | Table above excludes $465 million and $472 million of post-employment benefit costs that are recorded in post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2015 and 2014, respectively. |
Benefit Plans Postretirement Be
Benefit Plans Postretirement Benefit Costs Deferred as Regulatory Assets (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Defined Benefit Plan Disclosure | ||
Regulatory assets | $ 10,418 | $ 8,994 |
Pension Benefits | ||
Defined Benefit Plan Disclosure | ||
Unrecognized prior service cost (credit) | (158) | (180) |
Unrecognized net loss | 5,355 | 4,337 |
Amount capitalized due to actions of regulator | (228) | 0 |
Regulatory assets | 5,425 | 4,157 |
Other Post-retirement Benefits | ||
Defined Benefit Plan Disclosure | ||
Unrecognized prior service cost (credit) | (33) | (39) |
Unrecognized net loss | 173 | 179 |
Amount capitalized due to actions of regulator | 0 | 0 |
Regulatory assets | $ 140 | $ 140 |
Benefit Plans Projected Benefit
Benefit Plans Projected Benefit Obligations and Accumulated Benefit Obligations in Exess of Plan Assets (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Defined Benefit Plan Disclosure | ||
Projected benefit obligation | $ 12,824 | $ 12,265 |
Accumulated benefit obligation | 12,626 | 12,039 |
Fair value of net plan assets | $ 6,797 | $ 7,507 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Pension Benefits | |||
Defined Benefit Plan Disclosure | |||
Service cost | $ 130 | $ 130 | $ 154 |
Interest cost | 540 | 558 | 468 |
Expected return on plan assets | (437) | (435) | (428) |
Amortization of prior service credit | (21) | (21) | (22) |
Recognized net actuarial loss | 299 | 285 | 377 |
Net periodic benefit cost as acutarially determined | 511 | 517 | 549 |
Amount capitalized due to actions of regulator | (228) | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost | 283 | 517 | 549 |
Other Post-retirement Benefits | |||
Defined Benefit Plan Disclosure | |||
Service cost | 16 | 18 | 24 |
Interest cost | 29 | 32 | 31 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service credit | (6) | (6) | (6) |
Recognized net actuarial loss | 9 | 11 | 25 |
Net periodic benefit cost as acutarially determined | 48 | 55 | 74 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost | $ 48 | $ 55 | $ 74 |
Benefit Plans Expected Amortiza
Benefit Plans Expected Amortization of Regulatory Assets in Next Fiscal Year (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Defined Benefit Plan, Other Costs | $ (228) | $ 0 | $ 0 | |
Other Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Defined Benefit Plan, Other Costs | $ 0 | $ 0 | $ 0 | |
Scenario, Forecast [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Prior service cost (credit) | $ (29) | |||
Net actuarial loss | 299 | |||
Scenario, Forecast [Member] | Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Defined Benefit Plan, Other Costs | 231 | |||
Prior service cost (credit) | (23) | |||
Net actuarial loss | 291 | |||
Scenario, Forecast [Member] | Other Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Prior service cost (credit) | (6) | |||
Net actuarial loss | $ 8 |
Benefit Plans Actuarial Assumpt
Benefit Plans Actuarial Assumptions (Details) | 12 Months Ended | |||||||
Sep. 30, 2020 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2021 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure | ||||||||
Rate of compensation increase | 5.70% | |||||||
Expected return on plan assets | 7.25% | |||||||
Period during which actual company compensation experience study performed | 5 years | |||||||
Rate of compensation increase | 5.70% | 5.72% | 4.44% | |||||
Minimum percentage increase in twelve-month average CPI-U necessary to receive COLA | 1.00% | |||||||
Cost of living adjustment assumption | 2.50% | |||||||
Pension Benefits | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Discount rate | 4.50% | 4.45% | 5.00% | |||||
Rate of compensation increase | 5.70% | 5.70% | ||||||
Discount rate | 4.45% | 5.00% | ||||||
Expected return on plan assets | 7.00% | 7.25% | ||||||
Rate of compensation increase | 5.70% | 5.72% | ||||||
Other Post-retirement Benefits | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Discount rate | 4.65% | 4.50% | 5.05% | |||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year | 7.00% | 7.50% | 8.00% | 8.50% | ||||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 5.00% | 5.00% | 5.00% | |||||
Defined Benefit Plan, Year that Rate Reaches Ultimate Trend Rate | 2,019 | 2,019 | ||||||
Discount rate | 4.50% | 5.05% | ||||||
Minimum | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Rate of compensation increase | 3.50% | |||||||
Cost of living adjustment assumption | 1.00% | |||||||
Target Fed Funds Rate | 0.00% | |||||||
Maximum | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Rate of compensation increase | 13.00% | |||||||
Cost of living adjustment assumption | 5.00% | |||||||
Target Fed Funds Rate | 0.25% | |||||||
Scenario, Forecast [Member] | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Cost of living adjustment assumption | 2.40% | 2.20% | 0.00% | |||||
Scenario, Forecast [Member] | Other Post-retirement Benefits | ||||||||
Defined Benefit Plan Disclosure | ||||||||
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 5.00% |
Benefit Plans Sensitivity to Ce
Benefit Plans Sensitivity to Certain Changes in Pension Assumptions (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Discount rate | |
Defined Benefit Plan Disclosure | |
Change in Assumption | (0.25%) |
Impact on Pension Cost | $ 18 |
Impact on Projected Benefit Obligation | $ 404 |
Rate of return on plan assets | |
Defined Benefit Plan Disclosure | |
Change in Assumption | (0.25%) |
Impact on Pension Cost | $ 16 |
Benefit Plans Sensitivity to Ch
Benefit Plans Sensitivity to Changes in Assumed Health Care Cost Trend Rates (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Defined Benefit Plan Disclosure | |
Effect of one percentage point increase on total service and interest cost components | $ 6 |
Effect of one percentage point decrease on total service and interest cost components | (6) |
Effect of one percentage point increase on end-of-year accumulated postretirement benefit obligation | 88 |
Effect of one percentage point decrease on end-of-year accumulated postretirement benefit obligation | $ (94) |
Benefit Plans Asset Holdings (D
Benefit Plans Asset Holdings (Details) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure | ||
Target Allocation | 100.00% | |
Plan Asset Allocations | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure | ||
New Policy Target Allocation | 47.00% | |
Target Allocation | 32.00% | |
Plan Asset Allocations | 38.00% | 43.00% |
Private equity funds | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 10.00% | |
Plan Asset Allocations | 5.00% | 5.00% |
Low volatility global public equity [Member] | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 5.00% | 1.00% |
Cash | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 2.00% | |
Plan Asset Allocations | 2.00% | 2.00% |
Core fixed income | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 5.00% | 5.00% |
Long-term core fixed income | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 5.00% | 5.00% |
Investment grade credit | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 6.00% | |
Plan Asset Allocations | 6.00% | 6.00% |
International emerging markets fixed income | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 5.00% | 5.00% |
High yield fixed income | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 6.00% | 6.00% |
Global TIPS | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 6.00% | 5.00% |
Private real assets | ||
Defined Benefit Plan Disclosure | ||
New Policy Target Allocation | 10.00% | |
Target Allocation | 10.00% | |
Plan Asset Allocations | 9.00% | 7.00% |
Commodities | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 4.00% | 4.00% |
MLPs | ||
Defined Benefit Plan Disclosure | ||
Target Allocation | 5.00% | |
Plan Asset Allocations | 4.00% | 6.00% |
Fixed income | ||
Defined Benefit Plan Disclosure | ||
New Policy Target Allocation | 28.00% | |
Public real assets | ||
Defined Benefit Plan Disclosure | ||
New Policy Target Allocation | 15.00% |
Benefit Plans Fair Value Measur
Benefit Plans Fair Value Measurements (Details) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2015USD ($)YearsNumber_of_extensions | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | ||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [1] | $ 6,964 | [2] | $ 7,600 | [3] | |
Derivative liabilities | 34 | [2],[4] | 26 | [1],[3] | ||
Net payables | 130 | 65 | ||||
Payables for collateral on loaned securities | $ 3 | 2 | ||||
Voting percentage required to desolve partnership in private equity | 80.00% | |||||
Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | $ 2,060 | 1,804 | ||||
Derivative liabilities | 17 | 11 | ||||
Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 2,122 | 2,487 | ||||
Derivative liabilities | 17 | 15 | ||||
Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 91 | 66 | $ 42 | |||
Derivative liabilities | 0 | 0 | ||||
Equity securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1,650 | 1,669 | ||||
Equity securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1,649 | 1,668 | ||||
Equity securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Equity securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1 | 1 | ||||
Preferred securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 36 | 37 | ||||
Preferred securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 2 | 5 | ||||
Preferred securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 34 | 32 | ||||
Preferred securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Corporate debt securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1,161 | 1,326 | ||||
Corporate debt securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Corporate debt securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1,149 | 1,304 | ||||
Corporate debt securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 12 | 22 | ||||
Residential mortgage-backed securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 151 | 204 | ||||
Residential mortgage-backed securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Residential mortgage-backed securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 138 | 201 | ||||
Residential mortgage-backed securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 13 | 3 | ||||
Debt securities issued by U.S. Treasury and other U.S. government agencies | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 362 | 93 | ||||
Debt securities issued by U.S. Treasury and other U.S. government agencies | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 362 | 93 | ||||
Debt securities issued by U.S. Treasury and other U.S. government agencies | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt securities issued by U.S. Treasury and other U.S. government agencies | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt securities issued by foreign governments | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 294 | 225 | ||||
Debt securities issued by foreign governments | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt securities issued by foreign governments | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 281 | 218 | ||||
Debt securities issued by foreign governments | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 13 | 7 | ||||
Asset-backed securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 156 | 176 | ||||
Asset-backed securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Asset-backed securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 116 | 147 | ||||
Asset-backed securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 40 | 29 | ||||
Debt securities issued by state/local governments | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 25 | 30 | ||||
Debt securities issued by state/local governments | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt securities issued by state/local governments | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 25 | 29 | ||||
Debt securities issued by state/local governments | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 1 | ||||
Commercial mortgage-backed securities | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 43 | 23 | ||||
Commercial mortgage-backed securities | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Commercial mortgage-backed securities | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 32 | 20 | ||||
Commercial mortgage-backed securities | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 11 | 3 | ||||
Equity security commingled funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 642 | 1,106 | ||||
Equity security commingled funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Equity security commingled funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Equity security commingled funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt security commingled funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 654 | 661 | ||||
Debt security commingled funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt security commingled funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Debt security commingled funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Commodity commingled funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 244 | 332 | ||||
Commodity commingled funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Commodity commingled funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Commodity commingled funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Blended security commingled funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 206 | 228 | ||||
Blended security commingled funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Blended security commingled funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Blended security commingled funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Institutional mutual funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 26 | 28 | ||||
Institutional mutual funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 26 | 28 | ||||
Institutional mutual funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Institutional mutual funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Cash equivalents and other short-term investments | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 318 | 464 | ||||
Cash equivalents and other short-term investments | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Cash equivalents and other short-term investments | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 318 | 464 | ||||
Cash equivalents and other short-term investments | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Certificates of deposit | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 6 | 19 | ||||
Certificates of deposit | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Certificates of deposit | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 6 | 19 | ||||
Certificates of deposit | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Private equity funds measured at net asset value | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 389 | 481 | |||
Private equity funds measured at net asset value | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Private equity funds measured at net asset value | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Private equity funds measured at net asset value | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Private real estate funds measured at net asset value | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 556 | 435 | |||
Private real estate funds measured at net asset value | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Private real estate funds measured at net asset value | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Private real estate funds measured at net asset value | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | [5] | 0 | 0 | |||
Treasury bills, U.S. Government notes and securities held as futures and other derivative collateral | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 34 | 35 | ||||
Treasury bills, U.S. Government notes and securities held as futures and other derivative collateral | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 21 | 10 | ||||
Treasury bills, U.S. Government notes and securities held as futures and other derivative collateral | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 13 | 25 | ||||
Treasury bills, U.S. Government notes and securities held as futures and other derivative collateral | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Securities lending commingled funds | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 3 | 2 | ||||
Securities lending commingled funds | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Securities lending commingled funds | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 3 | 2 | ||||
Securities lending commingled funds | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Purchased options | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 2 | 18 | ||||
Purchased options | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Purchased options | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1 | 18 | ||||
Purchased options | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 1 | 0 | ||||
Foreign currency forward | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 6 | 8 | ||||
Derivative liabilities | 4 | 8 | ||||
Foreign currency forward | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Derivative liabilities | 0 | 0 | ||||
Foreign currency forward | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 6 | 8 | ||||
Derivative liabilities | 4 | 8 | ||||
Foreign currency forward | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Fair value of gross plan assets | 0 | 0 | ||||
Derivative liabilities | 0 | 0 | ||||
Futures | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 17 | 11 | ||||
Futures | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 17 | 11 | ||||
Futures | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | 0 | ||||
Futures | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | 0 | ||||
Written options | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 2 | 7 | ||||
Written options | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | 0 | ||||
Written options | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 2 | 7 | ||||
Written options | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | $ 0 | ||||
Interest Rate Contract | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 10 | |||||
Interest Rate Contract | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | |||||
Interest Rate Contract | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 10 | |||||
Interest Rate Contract | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | |||||
Credit default swaps | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 1 | |||||
Credit default swaps | Fair Value, Inputs, Level 1 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 0 | |||||
Credit default swaps | Fair Value, Inputs, Level 2 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | 1 | |||||
Credit default swaps | Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan Disclosure | ||||||
Derivative liabilities | $ 0 | |||||
Minimum | ||||||
Defined Benefit Plan Disclosure | ||||||
Number of years partnerships in private equity generally continue | Years | 10 | |||||
Number of one year extensions for partnerships in private equity | Number_of_extensions | 3 | |||||
Maximum | ||||||
Defined Benefit Plan Disclosure | ||||||
Number of years partnerships in private equity generally continue | Years | 12 | |||||
Number of one year extensions for partnerships in private equity | Number_of_extensions | 4 | |||||
[1] | Excludes a $2 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. | |||||
[2] | Excludes approximately $130 million in net payables associated with security purchases and sales and various other payables. | |||||
[3] | Excludes approximately $65 million in net payables associated with security purchases and sales and various other payables | |||||
[4] | Excludes a $3 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. | |||||
[5] | In accordance with Accounting Standards Codification Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. |
Benefit Plans Fair Value Mea113
Benefit Plans Fair Value Measurements Using Significant Unobservable Inputs (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||||||
Fair value of gross plan assets | [1] | $ 6,964 | [2] | $ 7,600 | [3] | |
Fair Value, Inputs, Level 3 | ||||||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||||||
Fair value of gross plan assets | 91 | 66 | $ 42 | |||
Net realized/unrealized gains and losses | (2) | 3 | ||||
Purchases, sales, issuances, and settlements | 33 | 26 | ||||
Transfers in and/or out of Level 3 | $ (6) | $ (5) | ||||
[1] | Excludes a $2 million payable for collateral on loaned securities in connection with TVARS’s participation in securities lending programs. | |||||
[2] | Excludes approximately $130 million in net payables associated with security purchases and sales and various other payables. | |||||
[3] | Excludes approximately $65 million in net payables associated with security purchases and sales and various other payables |
Benefit Plans Estimated Future
Benefit Plans Estimated Future Benefit Payments (Details) $ in Millions | Sep. 30, 2015USD ($) |
Pension Benefits | |
Defined Benefit Plan Disclosure | |
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months | $ 741 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Two | 744 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Three | 748 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Four | 755 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Five | 764 |
Defined Benefit Plan, Expected Future Benefit Payments, Five Fiscal Years Thereafter | 3,903 |
Other Post-retirement Benefits | |
Defined Benefit Plan Disclosure | |
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months | 39 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Two | 39 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Three | 39 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Four | 39 |
Defined Benefit Plan, Expected Future Benefit Payments, Year Five | 39 |
Defined Benefit Plan, Expected Future Benefit Payments, Five Fiscal Years Thereafter | $ 178 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Defined Benefit Plan Disclosure | ||||
Other postretirement benefit contributions | $ 44,000,000 | $ 47,000,000 | ||
Supplemental Employee Retirement Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | 7,000,000 | 6,000,000 | ||
Other Post-retirement Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | [1] | 43,000,000 | 33,000,000 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | [1] | 282,000,000 | 256,000,000 | |
Other Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | 275,000,000 | 250,000,000 | ||
Minimum | Other Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | $ 215,000,000 | $ 198,000,000 | ||
Scenario, Forecast [Member] | ||||
Defined Benefit Plan Disclosure | ||||
Other postretirement benefit contributions | $ 39,000,000 | |||
Scenario, Forecast [Member] | Supplemental Employee Retirement Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | 6,000,000 | |||
Scenario, Forecast [Member] | Other Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Employer contributions | $ 275,000,000 | |||
[1] | Other Post-Retirement Benefits Employer contributions are reduced by federal reinsurance payments and provider discounts and rebates. |
Benefit Plans Other Postemploym
Benefit Plans Other Postemployment Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Other Post-Employment Benefits | |||
Discount rate | 2.05% | 2.52% | 2.64% |
Period expense | $ 39 | $ 34 | $ (8) |
Postemployment benefits liability | 511 | 520 | $ 535 |
Pension and Other Postretirement Defined Benefit Plans, Liabilities, Noncurrent [Member] | |||
Other Post-Employment Benefits | |||
Postemployment benefits liability, noncurrent | 465 | 472 | |
Accounts payable and accrued liabilities | |||
Other Post-Employment Benefits | |||
Postemployment benefits liability, current | $ 46 | $ 48 |
Commitments and Contingencie117
Commitments and Contingencies Commitments and Contingencies - Table (Details) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2007Legal_actions | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Obligations | |||
Term of payments for civil penalty | 3 years | ||
Accrual for Environmental Loss Contingencies, Gross | $ 23,000,000 | $ 15,000,000 | |
Number of claims dismissed related to NPDES permit | 7 | ||
Number of claims filed on Gallatin NPDES permit | 8 | ||
Number of reactors a COL was submitted for | Legal_actions | 2 | ||
Periodforcommitmentsandcontingenciesshown | 5 years | ||
Total | $ 9,000,000 | 18,000,000 | |
2,016 | 100,000,000 | ||
2,017 | 100,000,000 | ||
2,018 | 100,000,000 | ||
2,019 | 10,000,000 | ||
2,020 | 0 | ||
Thereafter | 0 | ||
Total | 310,000,000 | ||
CT and QTE outstanding leaseback obligation | 616,000,000 | $ 691,000,000 | |
Plaintiff civil penalties related to Gallatin | 37,500 | ||
Membership interest of variable interest entity subject to mandatory redemption | |||
Obligations | |||
2,016 | 2,000,000 | ||
2,017 | 2,000,000 | ||
2,018 | 2,000,000 | ||
2,019 | 2,000,000 | ||
2,020 | 3,000,000 | ||
Thereafter | 26,000,000 | ||
Total | 37,000,000 | ||
Lease Obligations - Capital | |||
Obligations | |||
2,016 | 13,000,000 | ||
2,017 | 13,000,000 | ||
2,018 | 13,000,000 | ||
2,019 | 12,000,000 | ||
2,020 | 12,000,000 | ||
Thereafter | 156,000,000 | ||
Total | 219,000,000 | ||
Lease Obligations - Non-Cancelable Operating | |||
Obligations | |||
2,016 | 44,000,000 | ||
2,017 | 42,000,000 | ||
2,018 | 32,000,000 | ||
2,019 | 25,000,000 | ||
2,020 | 25,000,000 | ||
Thereafter | 38,000,000 | ||
Total | 206,000,000 | ||
Purchase Obligations - Power | |||
Obligations | |||
2,016 | 217,000,000 | ||
2,017 | 226,000,000 | ||
2,018 | 229,000,000 | ||
2,019 | 235,000,000 | ||
2,020 | 241,000,000 | ||
Thereafter | 3,124,000,000 | ||
Total | 4,272,000,000 | ||
Purchase Obligations - Fuel | |||
Obligations | |||
2,016 | 1,282,000,000 | ||
2,017 | 711,000,000 | ||
2,018 | 635,000,000 | ||
2,019 | 508,000,000 | ||
2,020 | 335,000,000 | ||
Thereafter | 1,448,000,000 | ||
Total | 4,919,000,000 | ||
Purchase Obligations - Other | |||
Obligations | |||
2,016 | 262,000,000 | ||
2,017 | 198,000,000 | ||
2,018 | 193,000,000 | ||
2,019 | 189,000,000 | ||
2,020 | 173,000,000 | ||
Thereafter | 1,830,000,000 | ||
Total | 2,845,000,000 | ||
Unfunded Loan Commitment [Member] | |||
Obligations | |||
2,016 | 5,000,000 | ||
Total | 5,000,000 | ||
Payments on Other Financings | |||
Obligations | |||
2,016 | 104,000,000 | ||
2,017 | 104,000,000 | ||
2,018 | 104,000,000 | ||
2,019 | 96,000,000 | ||
2,020 | 73,000,000 | ||
Thereafter | 232,000,000 | ||
Total | 713,000,000 | ||
Total | |||
Obligations | |||
2,016 | 1,929,000,000 | ||
2,017 | 1,296,000,000 | ||
2,018 | 1,208,000,000 | ||
2,019 | 1,067,000,000 | ||
2,020 | 862,000,000 | ||
Thereafter | 6,854,000,000 | ||
Total | $ 13,216,000,000 |
Commitments and Contingencie118
Commitments and Contingencies Commitments and Contingencies - Energy Prepayment Obligations (Details) $ in Millions | Sep. 30, 2015USD ($) |
Obligations | |
2,016 | $ 100 |
2,017 | 100 |
2,018 | 100 |
2,019 | 10 |
2,020 | 0 |
Thereafter | 0 |
Total | $ 310 |
Commitments and Contingencie119
Commitments and Contingencies Commitments and Contingencies - Debt (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 09, 2013 |
Debt Instrument | |||
Membership interests of VIE subject to mandatory redemption | $ 47 | $ 50 | $ 40 |
Commitments and Contingencie120
Commitments and Contingencies Commitments and Contingencies - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Leases | |||
Lease terms low end of range | 1 | ||
Lease terms high end of range | 38 | ||
Cost of financing | $ 115 | ||
Rental expense for operating leases | $ 79 | $ 75 | $ 71 |
Commitments and Contingencie121
Commitments and Contingencies Commitments and Contingencies - Purchase Obligations (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015USD ($)MegawattsHoursSuppliersFacilities | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Obligations | |||
Megawatts provided under power purchase obligations | Megawatts | 1,255 | ||
Remaining terms of the agreements, high end of range | 17 years | ||
Power purchased under agreement | $ 230 | $ 237 | $ 267 |
Number of U.S. Army Corps of Engineers hydroelectric facilities contracted with to obtain power | Facilities | 8 | ||
Agreement termination notice period | 3 years | ||
Minimum required hours of power | Hours | 1,500 | ||
Megawatt allocation | Megawatts | 405 | ||
Maximum term length for the purchase and transportation of coal | 5 years | ||
Maximum term for purchase of enriched uranium and fabrication of nuclear fuel assemblies | 15 years | ||
Purchase Agreements Required by Federal Law | |||
Obligations | |||
Megawatts provided under power purchase obligations | Megawatts | 882 | ||
Number of suppliers | Suppliers | 24 | ||
Purchase Obligations - Coal | |||
Obligations | |||
Long-term purchase commitment | $ 1,500 | ||
Purchase Obligations - Nuclear Fuel | |||
Obligations | |||
Long-term purchase commitment | 3,400 | ||
Purchase Obligations - Other | |||
Obligations | |||
Long-term purchase commitment | $ 2,845 |
Commitments and Contingencie122
Commitments and Contingencies Commitments and Contingencies - Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2015USD ($)UnitsInsurance_layersProceduresSitesreactors | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | |
Contingencies | |||
Nuclear liability insurance | $ 375,000 | ||
Assessment from licensees for each licensed reactor | $ 127,000 | ||
Number of licensed reactors in US | reactors | 102 | ||
Nuclear accident assessment limitation per year per unit | $ 19,000 | ||
Number of licensed nuclear units | Units | 6 | ||
Maximum assessment per nuclear incident | $ 764,000 | ||
Maximum payment required per accident in any one year | 114,000 | ||
maximum payment required per accident in any one year after addition of unit under construction | 133,000 | ||
Maximum assessment per nuclear incident after addition of unit under construction | 891,000 | ||
Total amount of protection available | $ 13,000,000 | ||
Surcharge for legal expenses | 5.00% | ||
The U.S. Congress is required to take action if these layes are exhausted | Insurance_layers | 2 | ||
Amount of property, decommissioning, and decontamination insurance carried | $ 5,100,000 | ||
Amount of insurance available for loss at any one site | $ 2,100,000 | ||
Number of sites | Sites | 1 | ||
Maximum amount of retrospective premiums | $ 127,000 | ||
Maximum idemnity if a covered accident tasks or keeps a nuclear unit offline | 490,000 | ||
Maximum amount of retrospective premiums | $ 36,000 | ||
Number of procedures for determining estimates for the costs of nuclear decommissioning | Procedures | 2 | ||
Amount spent to reduce emissions since 1970 | $ 6,200,000 | ||
Amount spent to reduce emissions | 315,000 | $ 378,000 | $ 197,000 |
Possible additional future costs for compliance with Clean Air Act requirements | 750,000 | ||
Amount of settlement for potential liability related to soil cleanup | 300 | ||
Amount of settlement for potential liability related to EPA study of site | 8 | ||
Remaining natural resource damages are less than | 1,000 | ||
Estimated liability for cleanup and similar environmental work on a non-discounted basis | 23,000 | $ 15,000 | |
Decommissioning Fund Investments, Fair Value | 435,000 | ||
Nuclear Decommissioning Fund Investments, Fair Value | 1,500,000 | ||
Nuclear | Nuclear | |||
Contingencies | |||
Decommissioning Liability, Noncurrent | 2,200,000 | ||
Non-nuclear | Non-nuclear | |||
Contingencies | |||
Decommissioning Liability, Noncurrent | $ 1,700,000 |
Commitments and Contingencie123
Commitments and Contingencies Commitments and Contingencies - Legal Proceedings (Details) | 1 Months Ended | 12 Months Ended | |||||||||||
Jul. 31, 2013Legal_actions | May. 31, 2013 | Dec. 31, 2011Legal_actions | Apr. 30, 2011GroupsAgreements | Mar. 31, 2010USD ($)People | Jun. 30, 2008Legal_actions | Sep. 30, 2015USD ($)Legal_actions | Dec. 31, 2010Years | Apr. 30, 2015Legal_actions | Apr. 14, 2015Megawatts | Sep. 30, 2014USD ($) | Jun. 30, 2011USD ($)UnitsMegawatts | Jun. 30, 2010USD ($) | |
Legal Proceedings | |||||||||||||
Accrual for Environmental Loss Contingencies, Gross | $ 23,000,000 | $ 15,000,000 | |||||||||||
Megawatts option 1 | Megawatts | 700 | ||||||||||||
TDEC civil penalties related to Gallatin | $ 17,000 | ||||||||||||
Number of units at John Sevier Fossil | 4 | ||||||||||||
Units Affected by Paradise Case | 2 | ||||||||||||
General | |||||||||||||
Legal Proceedings | |||||||||||||
Legal loss contingency accrual | $ 115,000,000 | ||||||||||||
Environmental Agreements | |||||||||||||
Legal Proceedings | |||||||||||||
Number of similar environmental agreements entered into | Agreements | 2 | ||||||||||||
Number of environmental agreements entered into with the EPA | Agreements | 1 | ||||||||||||
Number of environmental agreements entered into with Alabama, Kentucky, North Carolina, and Tennessee | Agreements | 1 | ||||||||||||
Number of environmental agreements entered into with environmental advocacy groups | Groups | 3 | ||||||||||||
Number of units to be idled | Units | 18 | ||||||||||||
Megawatts option 1 | Megawatts | 2,200 | ||||||||||||
Megawatts option 2 | Megawatts | 3,500 | ||||||||||||
Amount to be invested in certain environmental projects | $ 290,000,000 | ||||||||||||
Amount to be provided to fund environmental projects | 60,000,000 | ||||||||||||
Amount to pay civil penalties | $ 10,000,000 | ||||||||||||
Kingston Ash Spill | |||||||||||||
Legal Proceedings | |||||||||||||
Number of lawsuits filed | Legal_actions | 78 | ||||||||||||
Number of lawsuits dismissed | Legal_actions | 15 | 2 | |||||||||||
Loss Contingency, Claims Dismissed, Number | Legal_actions | 63 | ||||||||||||
Number of active lawsuits | Legal_actions | 9 | ||||||||||||
Payments for Legal Settlements | $ 28,000,000 | ||||||||||||
Loss Contingency, Claims Settled, Number | Legal_actions | 7 | ||||||||||||
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 | ||||||||||||
Case Involving Tennessee Valley Authority Retirement System | |||||||||||||
Legal Proceedings | |||||||||||||
Number of participants that filed suit | People | 8 | ||||||||||||
Contribution related to TVARS case | $ 1,000,000,000 | ||||||||||||
Retirement age of eligibility for cost of living adjustment before January 1, 2010 | Years | 55 | ||||||||||||
Retirement age of eligibility for cost of living adjustment after January 1, 2010 | Years | 60 | ||||||||||||
Administrative Proceedings Regarding Sequoyah U1 and U2 [Member] | |||||||||||||
Legal Proceedings | |||||||||||||
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 | Legal_actions | 7 | ||||||||||||
Number of contentions left | Legal_actions | 1 | ||||||||||||
Administrative Proceedings Regarding Bellefonte Units 3 and 4 | |||||||||||||
Legal Proceedings | |||||||||||||
Number of contentions left | Legal_actions | 2 | ||||||||||||
Number of admitted contentions submitted by BREDL and SACE | Legal_actions | 4 | ||||||||||||
Number of contentions submitted by BREDL and SACE | Legal_actions | 20 | ||||||||||||
Number of contentions no longer admitted | Legal_actions | 2 | ||||||||||||
Petitions Resulting from Japanese Nuclear Events | |||||||||||||
Legal Proceedings | |||||||||||||
Number of requests accepted by the NRC | Legal_actions | 5 | ||||||||||||
Other long-term liabilities | General | |||||||||||||
Legal Proceedings | |||||||||||||
Legal loss contingency accrual | 55,000,000 | ||||||||||||
Accounts payable and accrued liabilities | General | |||||||||||||
Legal Proceedings | |||||||||||||
Legal loss contingency accrual | $ 60,000,000 |
Related Parties Related Part124
Related Parties Related Parties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Related Parties | |||
Amount of appropriations currently received | $ 0 | ||
Amount of appropriation investment that must be repaid | 1,000 | ||
Current borrowing capacity | 150 | ||
Return on power program appropriation investment | 5 | $ 4 | $ 7 |
Return of power program appropriation investment | 10 | 20 | |
Related Party Transactions | |||
Related Parties | |||
Sales of electricity | 130 | 128 | 120 |
Other income | 115 | 120 | 84 |
Judgment settlement | 52 | 17 | 18 |
Operating expenses | 227 | 267 | 299 |
Additions to property, plant, and equipment | 37 | 19 | 15 |
Cash and cash equivalents | 45 | 35 | 38 |
Accounts receivable, net | 106 | 85 | 58 |
Accounts payable and accrued liabilities | 98 | 146 | 133 |
Long-term power bonds, net | 5 | 3 | 0 |
Return on power program appropriation investment | 5 | 4 | 7 |
Return of power program appropriation investment | $ 0 | $ 10 | $ 20 |
Unaudited Quarterly Financia125
Unaudited Quarterly Financial Information Unaudited Quarterly Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Operating revenues | $ 3,171 | $ 2,558 | $ 2,863 | $ 2,411 | $ 3,166 | $ 2,651 | $ 2,938 | $ 2,382 | $ 11,003 | $ 11,137 | $ 10,956 |
Operating expenses | 2,402 | 2,252 | 2,087 | 2,047 | 2,569 | 2,453 | 2,362 | 2,164 | 8,788 | 9,548 | 9,503 |
Operating income | 769 | 306 | 776 | 364 | 597 | 198 | 576 | 218 | 2,215 | 1,589 | 1,453 |
Net income (loss) | $ 502 | $ 32 | $ 496 | $ 81 | $ 322 | $ (81) | $ 295 | $ (67) | $ 1,111 | $ 469 | $ 271 |