DEI Document
DEI Document shares in Millions, $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($)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-Q |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | shares | 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 (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating revenues | ||
Revenue from sales of electricity | $ 2,509 | $ 2,508 |
Other revenue | 40 | 38 |
Total operating revenues | 2,549 | 2,546 |
Operating expenses | ||
Fuel | 475 | 568 |
Purchased power | 220 | 242 |
Operating and maintenance | 709 | 741 |
Depreciation and amortization | 423 | 437 |
Tax equivalents | 124 | 129 |
Total operating expenses | 1,951 | 2,117 |
Operating income | 598 | 429 |
Other income (expense), net | 12 | 12 |
Interest expense | ||
Interest expense | 322 | 339 |
Net income (loss) | $ 288 | $ 102 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Net income (loss) | $ 288 | $ 102 | |
Other comprehensive income (loss) | |||
Net unrealized gain (loss) on cash flow hedges | 39 | (8) | |
Reclassification to earnings from cash flow hedges | [1] | (3) | 38 |
Total other comprehensive income (loss) | 36 | 30 | |
Total comprehensive income (loss) | $ 324 | $ 132 | |
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $1 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets | ||
Cash and cash equivalents | $ 300 | $ 300 |
Restricted cash | 13 | 0 |
Accounts receivable, net | 1,500 | 1,569 |
Inventories, net | 1,047 | 1,065 |
Regulatory assets | 455 | 447 |
Other current assets | 95 | 65 |
Total current assets | 3,410 | 3,446 |
Property, plant, and equipment | ||
Completed plant | 59,631 | 58,947 |
Less accumulated depreciation | (28,587) | (28,404) |
Net completed plant | 31,044 | 30,543 |
Construction in progress | 2,459 | 2,842 |
Nuclear fuel | 1,370 | 1,401 |
Capital leases | 158 | 161 |
Total property, plant, and equipment, net | 35,031 | 34,947 |
Investment funds | 2,714 | 2,603 |
Regulatory and other long-term assets | ||
Regulatory assets | 8,492 | 8,698 |
Other long-term assets | 330 | 323 |
Total regulatory and other long-term assets | 8,822 | 9,021 |
Total assets | 49,977 | 50,017 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,772 | 1,940 |
Accrued interest | 317 | 346 |
Current portion of leaseback obligations | 37 | 37 |
Current portion of energy prepayment obligations | 85 | 100 |
Regulatory liabilities | 159 | 163 |
Short-term debt, net | 2,721 | 1,998 |
Current maturities of power bonds | 2,031 | 1,728 |
Current maturities of long-term debt of variable interest entities | 36 | 36 |
Current maturities of notes payable | 52 | 53 |
Total current liabilities | 7,210 | 6,401 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 5,372 | 5,477 |
Asset retirement obligations | 4,206 | 4,176 |
Other long-term liabilities | 2,961 | 3,055 |
Leaseback obligations | 301 | 302 |
Energy prepayment obligations | 0 | 10 |
Regulatory liabilities | 25 | 25 |
Total other liabilities | 12,865 | 13,045 |
Long-term debt, net | ||
Long-term power bonds, net | 19,214 | 20,205 |
Long-term debt of variable interest entities, net | 1,164 | 1,164 |
Long-term notes payable | 68 | 69 |
Total long-term debt, net | 20,446 | 21,438 |
Total liabilities | 40,521 | 40,884 |
Proprietary capital | ||
Power program appropriation investment | 258 | 258 |
Power program retained earnings | 8,571 | 8,282 |
Total power program proprietary capital | 8,829 | 8,540 |
Nonpower programs appropriation investment, net | 570 | 572 |
Accumulated other comprehensive income (loss) | 57 | 21 |
Total proprietary capital | 9,456 | 9,133 |
Total liabilities and proprietary capital | $ 49,977 | $ 50,017 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities | |||
Net income (loss) | $ 288 | $ 102 | |
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) | 433 | 449 | |
Amortization of nuclear fuel cost | 94 | 85 | |
Non-cash retirement benefit expense | 82 | 84 | |
Prepayment credits applied to revenue | (25) | (25) | |
Fuel cost adjustment deferral | (12) | 57 | |
Fuel cost tax equivalents | (5) | 2 | |
Changes in current assets and liabilities | |||
Accounts receivable, net | 70 | 299 | |
Inventories and other current assets, net | 7 | (61) | |
Accounts payable and accrued liabilities | (179) | (209) | |
Accrued interest | (24) | (24) | |
Regulatory assets costs | (11) | (16) | |
Pension contributions | (75) | (75) | |
Other, net | (30) | (51) | |
Net cash provided by operating activities | 613 | 617 | |
Cash flows from investing activities | |||
Construction expenditures | (551) | (625) | |
Nuclear fuel expenditures | (71) | (100) | |
Loans and other receivables | |||
Advances | (6) | (3) | |
Repayments | 1 | 1 | |
Other, net | (1) | 20 | |
Net cash used in investing activities | (628) | (707) | |
Long-term debt | |||
Redemptions and repurchases of power bonds | (698) | [1] | (527) |
Redemptions of notes payable | (2) | 0 | |
Short-term debt issues (redemptions), net | 717 | 619 | |
Payments on leases and leasebacks | (1) | (1) | |
Payments to U.S. Treasury | (1) | (1) | |
Net cash provided by (used in) financing activities | 15 | 90 | |
Net change in cash and cash equivalents | 0 | 0 | |
Cash and cash equivalents at beginning of period | 300 | 300 | |
Cash and cash equivalents at end of period | 300 | 300 | |
Significant non-cash transactions | |||
Accrued capital and nuclear fuel expenditures | $ 294 | $ 336 | |
[1] | All redemptions were at 100 percent of par. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Power Program Appropriation Investment | $ 258 | $ 258 | ||
Power Program Retained Earnings | 8,571 | 8,282 | ||
Nonpower Programs Appropriation Investment, Net | 570 | 572 | ||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | 57 | 21 | ||
Total Proprietary Capital | 9,456 | $ 8,551 | 9,133 | $ 8,420 |
Net income (loss) | 288 | 102 | ||
Total other comprehensive income (loss) | 36 | 30 | ||
Return on power program appropriation investment | (1) | (1) | ||
Power Program Appropriation Investment | ||||
Power Program Appropriation Investment | 258 | 258 | 258 | 258 |
Net income (loss) | 0 | 0 | ||
Total other comprehensive income (loss) | 0 | 0 | ||
Return on power program appropriation investment | 0 | 0 | ||
Power Program Retained Earnings | ||||
Power Program Retained Earnings | 8,571 | 7,697 | 8,282 | 7,594 |
Net income (loss) | 290 | 104 | ||
Total other comprehensive income (loss) | 0 | 0 | ||
Return on power program appropriation investment | (1) | (1) | ||
Nonpower Programs Appropriation Investment, Net | ||||
Nonpower Programs Appropriation Investment, Net | 570 | 578 | 572 | 580 |
Net income (loss) | (2) | (2) | ||
Total other comprehensive income (loss) | 0 | 0 | ||
Return on power program appropriation investment | 0 | 0 | ||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | 57 | 18 | $ 21 | $ (12) |
Net income (loss) | 0 | 0 | ||
Total other comprehensive income (loss) | 36 | 30 | ||
Return on power program appropriation investment | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | General The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("U.S.") that was created in 1933 by legislation enacted by the 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 U.S., 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. Fiscal Year TVA's fiscal year ends September 30. Years ( 2018 , 2017 , 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 future recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. 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 TVA prepares its consolidated interim financial statements in conformity with GAAP for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2017 , and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2017 (the “Annual Report”). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included in the consolidated interim financial statements. The accompanying consolidated interim financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA, wholly-owned direct subsidiaries, and variable interest entities ("VIE") of which TVA is the primary beneficiary. See Note 7 . 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. Restricted Cash Restricted cash reflects amounts to be used primarily for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 17 — Legal Proceedings — Environmental Agreements . 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 less than $ 1 million at both December 31, 2017 , and September 30, 2017 . TVA had loans receivable of $127 million and $ 118 million at December 31, 2017 , and September 30, 2017 , respectively, and these amounts are reported net of allowances for uncollectible accounts of $1 million at both December 31, 2017 , and September 30, 2017 . The current portion of loans receivable was $3 million at both December 31, 2017 , and September 30, 2017 and is included in Accounts receivable, net. The long-term portions of loans receivable are included in Other long-term assets. Pre-Commercial Plant Operations As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the demands of the electric system. TVA estimates revenue from such pre-commercial generation based on the guidance provided by Federal Energy Regulatory Commission ("FERC") regulations. Watts Bar Nuclear Plant ("Watts Bar") Unit 2 commenced pre-commercial plant operations on June 3, 2016, and commercial operations began on October 19, 2016. In addition, the Paradise Combined Cycle Plant commenced pre-commercial plant operations on October 10, 2016, and commercial operations began on April 7, 2017. Furthermore, the Allen Combined Cycle Plant began pre-commercial operations on September 9, 2017. Estimated revenue of $ 1 million and $ 14 million primarily related to these projects was capitalized to offset project costs for the three months ended December 31, 2017 and 2016 , respectively. TVA also capitalized related fuel costs for these construction projects of approximately $ 2 million and $ 5 million during the three months ended December 31, 2017 and 2016 , respectively. In addition to the projects above, Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during the first quarter of 2018. 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 rates are determined based on an external depreciation study. TVA concluded and implemented a new depreciation study effective October 1, 2016. This study will be updated at least every five years. Depreciation expense was $319 million and $336 million for the three months ended December 31, 2017 and 2016 , respectively. |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of New Accounting Standards and Interpretations | Impact of New Accounting Standards and Interpretations The following are accounting standard updates issued by the Financial Accounting Standards Board ("FASB") that TVA adopted during the first quarter of 2018. Derivatives and Hedging - Contingent Put and Call Options in Debt Instruments Description This guidance clarifies the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this update is required to assess the embedded call or put options solely in accordance with a four-step decision sequence. The standard includes interim periods within the fiscal year of adoption and requires a modified retrospective transition. Effective Date for TVA October 1, 2017 Effect on the Financial Statements or Other Significant Matters 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. If the coupon rate is going to be reset, holders may request, for a limited period of time, redemption of the PARRS at par value, with repayment of principal on the reset date. This put option is otherwise not available. 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 PARRS. TVA has determined under the new guidance that contingent put options that can accelerate the payment of principal on the PARRS are clearly and closely related to their debt hosts. The adoption of this standard did not have a material impact on TVA’s financial condition, results of operations, or cash flows. Inventory Valuation Description This guidance 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 or the retail inventory method (for example, first-in, first-out or average cost). This amendment is intended to simplify the subsequent measurement of inventory. The standard includes interim periods within the fiscal year of adoption and requires a prospective transition. Effective Date for TVA October 1, 2017 Effect on the Financial Statements or Other Significant Matters The adoption of this standard did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standards have been issued but as of December 31, 2017 , were not effective and had not been adopted by TVA. Defined Benefit Costs Description This guidance changes how information about defined benefit costs for pension plans and other post-retirement benefit plans is presented in employer financial statements. The guidance requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit and settlement and curtailment effects, are to be included in nonoperating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA has evaluated the impact of adopting this guidance, and if the guidance had been effective for TVA for the three months ended December 31, 2017 and 2016, TVA would have reclassified $63 million and $62 million, respectively, of net periodic benefit costs from Operating and maintenance expense to Other income (expense), net on the consolidated statements of operations. There will be no impact on the consolidated balance sheets because TVA has historically capitalized the service cost component which is consistent with the new guidance. Financial Instruments Description This guidance applies to the recognition and measurement of financial assets and liabilities. The standard requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The standard also amends presentation requirements related to certain changes in the fair value of a liability and eliminates certain disclosure requirements of significant assumptions for financial instruments measured at amortized cost on the balance sheet. Public entities must apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. Early adoption is not permitted unless specific early adoption guidance is applied. TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA currently measures all of its equity investments (other than those that result in the consolidation of the investee) at fair value, with changes in the fair value recognized through net income. The TVA Board has authorized the use of regulatory accounting for changes in fair value of certain equity investments, and as a result, those changes in fair value are deferred as regulatory assets or liabilities. TVA currently discloses significant assumptions around its estimates of fair value for financial instruments carried at amortized cost on its consolidated balance sheet. The adoption of this standard is not expected to have a material impact on TVA's financial condition, results of operations or cash flows because TVA holds no available-for-sale securities. Revenue Recognition Description This guidance related to revenue from contracts with customers, including subsequent amendments, replaces the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the guidance is to recognize revenue related to the transfer of goods or services to customers at the amount expected to be collected. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within and across industries. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers. At adoption, companies must also select a transition method to be applied either retrospectively to each prior reporting period presented or retrospectively with a cumulative effect adjustment to retained earnings at the date of initial adoption. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA will not adopt the standard early. Effect on the Financial Statements or Other Significant Matters While TVA expects most of its revenue to be included in the scope of the new guidance, it has not completed its evaluation of all contracts with customers. TVA’s efforts to date have focused on the scoping of revenue streams and evaluation of contracts with LPCs, which represent the majority of TVA's revenues. TVA is also conducting ongoing evaluations of sales to directly served industrial customers, sales to federal agencies, purchase power agreements, fuel cost adjustments, other revenue streams and the effectiveness of internal control related to revenue recognition. In addition, the power and utilities industry is currently addressing certain industry-specific issues which have not yet been finalized. As the ultimate impact of the new standard has not yet been determined, TVA has not yet elected its transition method. Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments Description This standard adds or clarifies guidance on the classification of certain cash receipts and payments on the statement of cash flows as follows: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of the predominance principle to separately identifiable cash flows. Effective Date for TVA This standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. TVA will apply the standard using a retrospective transition method to each period presented. Effect on the Financial Statements or Other Significant Matters TVA’s previous treatment of the classification of certain cash receipts and cash payments is consistent with the new standard and will have no impact on TVA’s financial condition, results of operations, or presentation or disclosure of cash flows. Statement of Cash Flows - Restricted Cash Description This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance does not provide a definition of restricted cash or restricted cash equivalents. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. TVA will apply the standard using a retrospective transition method to each period presented. Effect on the Financial Statements or Other Significant Matters Adoption of this standard will result in a change to the amount of cash and cash equivalents and restricted cash explained when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. For the three months ended December 31, 2017, TVA is reflecting $13 million in transfers of cash and cash equivalents to restricted cash within cash flows from operating activities in the consolidated statement of cash flows. Derivatives and Hedging - Improvements to Accounting for Hedging Activities Description This guidance better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2019. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on TVA’s financial condition, results of operations, or cash flows. Lease Accounting Description This guidance changes the provisions of recognition in both the lessee and lessor accounting models. The standard requires entities that lease assets ("lessees") to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance (similar to current capital leases) or operating lease. However, unlike current lease accounting rules, which require only capital leases to be recognized on the balance sheet, the new standard will require both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest on the lease liability separate from amortization expense. The accounting for the owner of the assets leased by the lessee ("lessor accounting") will remain largely unchanged from current lease accounting rules. The standard allows for certain practical expedients to be elected related to lease term determination, separation of lease and non-lease elements, reassessment of existing leases, and short-term leases. When the standard becomes effective, it will include interim periods within that fiscal year and will be required to be applied using a modified retrospective transition. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2019. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA is currently evaluating the potential impact of these changes on its consolidated financial statements and related disclosures. TVA expects the new standard to impact financial position as adoption is expected to increase the amount of assets and liabilities recognized on TVA’s consolidated balance sheets. TVA expects the new standard to have no material impact on results of operations or cash flows. TVA plans to elect certain of the practical expedients included in the new standard. Efforts to date have consisted of evaluating the completeness of TVA’s lease population, the effectiveness of internal control related to leases, appropriate financial statement disclosure, and selection of a lease system solution. TVA is also continuing to monitor unresolved industry implementation issues, including items related to renewables and purchased power agreements, easements, and rights-of-way, and will analyze the related impacts to lease accounting. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 At September 30, 2017 Power receivables $ 1,373 $ 1,441 Other receivables 128 129 Allowance for uncollectible accounts (1 ) (1 ) Accounts receivable, net $ 1,500 $ 1,569 |
Inventories, Net
Inventories, Net | 3 Months Ended |
Dec. 31, 2017 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA’s inventories: Inventories, Net At December 31, 2017 At September 30, 2017 Materials and supplies inventory $ 758 $ 734 Fuel inventory 322 355 Renewable energy certificates/emission allowance inventory, net 12 15 Allowance for inventory obsolescence (45 ) (39 ) Inventories, net $ 1,047 $ 1,065 |
Other Long-Term Assets
Other Long-Term Assets | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 At September 30, 2017 Loans and other long-term receivables, net $ 124 $ 115 EnergyRight ® receivables 98 100 Prepaid capacity payments 32 34 Commodity contract derivative assets 6 2 Currency swap asset, net 5 — Other 65 72 Other long-term assets $ 330 $ 323 In association with the EnergyRight ® Solutions program, local power company customers of TVA ("LPCs") offer financing to end-use customers for the purchase of energy-efficient equipment. 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 December 31, 2017 , and September 30, 2017 , the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $ 24 million and $ 25 million , respectively. See Note 9 for information regarding the associated financing obligation. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 3 Months Ended |
Dec. 31, 2017 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferrals of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below: Regulatory Assets and Liabilities At December 31, 2017 At September 30, 2017 Current regulatory assets Deferred nuclear generating units $ 237 $ 237 Unrealized losses on interest rate derivatives 89 93 Unrealized losses on commodity derivatives 57 68 Fuel cost adjustment receivable 12 1 Environmental agreements 3 2 Environmental cleanup costs - Kingston ash spill 44 44 Gallatin coal combustion residual facilities 10 — Other current regulatory assets 3 2 Total current regulatory assets 455 447 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,945 4,009 Unrealized losses on interest rate derivatives 957 982 Gallatin coal combustion residual facilities 889 899 Nuclear decommissioning costs 771 823 Deferred nuclear generating units 703 759 Non-nuclear decommissioning costs 692 703 Environmental cleanup costs - Kingston ash spill 253 263 Unrealized losses on commodity derivatives 35 9 Environmental agreements 12 13 Other non-current regulatory assets 235 238 Total non-current regulatory assets 8,492 8,698 Total regulatory assets $ 8,947 $ 9,145 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 149 $ 153 Fuel cost adjustment — 2 Unrealized gains on commodity derivatives 10 8 Total current regulatory liabilities 159 163 Non-current regulatory liabilities Deferred other post-retirement benefits cost 19 23 Unrealized gains on commodity derivatives 6 2 Total non-current regulatory liabilities 25 25 Total regulatory liabilities $ 184 $ 188 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Variable Interest Entities | Variable Interest Entities A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. 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. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis. John Sevier VIEs In 2012, TVA entered into a $ 1.0 billion construction management agreement and lease financing arrangement with John Sevier Combined Cycle Generation LLC ("JSCCG") for the completion and lease by TVA of the John Sevier Combined Cycle Facility ("John Sevier CCF") . JSCCG is a special single-purpose limited liability company formed in January 2012 to finance the John Sevier CCF through a $ 900 million secured note issuance (the “JSCCG notes”) and the issuance of $ 100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco") . Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated. The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $ 100 million of secured notes (the “Holdco notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each January 15 and July 15, with a final payment due in January 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 in January 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. Southaven VIE In 2013, TVA entered into a $ 400 million lease financing arrangement with Southaven Combined Cycle Generation LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF") . SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $ 360 million secured notes issuance (the “SCCG notes”) and the issuance of $ 40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco LLC ("SHLLC") . SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests in 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 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. Impact on Consolidated Financial Statements The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG as of December 31, 2017 , and September 30, 2017 , as reflected in the Consolidated Balance Sheets are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At December 31, 2017 At September 30, 2017 Current liabilities Accrued interest $ 26 $ 11 Accounts payable and accrued liabilities 2 2 Current maturities of long-term debt of variable interest entities 36 36 Total current liabilities 64 49 Other liabilities Other long-term liabilities 30 30 Long-term debt, net Long-term debt of variable interest entities, net 1,164 1,164 Total liabilities $ 1,258 $ 1,243 Interest expense of $15 million related to debt of VIEs and membership interests of variable interest entity subject to mandatory redemption is included in the Consolidated Statements of Operations for the three months ended both December 31, 2017 and 2016 . Creditors of the VIEs have no 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. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 3 Months Ended |
Dec. 31, 2017 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other long-term liabilities consist primarily of liabilities related to certain derivative agreements, liabilities for environmental remediation, and liabilities under agreements related to compliance with certain environmental regulations. See Note 17 — Legal Proceedings — Environmental Agreements . The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities At December 31, 2017 At September 30, 2017 Interest rate swap liabilities $ 1,364 $ 1,418 Gallatin coal combustion residual facilities liability 875 880 Capital lease obligations 181 182 EnergyRight® financing obligation 112 115 Currency swap liabilities 59 92 Commodity contract derivative liabilities 35 9 Membership interests of VIE subject to mandatory redemption 30 30 Environmental agreements liability 12 13 Other 293 316 Total other long-term liabilities $ 2,961 $ 3,055 Interest Rate Swap Liabilities. TVA uses interest rate swaps to fix variable short-term debt to a fixed rate. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the consolidated balance sheets. As of December 31, 2017 , and September 30, 2017 , the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities was approximately $90 million and $93 million , respectively. See Note 13 — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the associated interest rate swap liabilities. Gallatin Coal Combustion Residual Facilities Liability . The estimated cost of the potential Gallatin CCR project is approximately $900 million . The current and long-term portions of the resulting obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA’s consolidated balance sheets. As of December 31, 2017 , and September 30, 2017 , related liabilities of $23 million and $ 19 million , respectively, were recorded in Accounts payable and accrued liabilities. See Note 8 for information regarding the Gallatin CCR facilities. EnergyRight ® Financing Obligation . TVA purchases certain loans receivable from its LPCs in association with the EnergyRight ® Solutions program. 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 December 31, 2017 , and September 30, 2017 , the carrying amount of the financing obligation reported in Accounts payable and accrued liabilities was approximately $ 28 million and $ 29 million , respectively. See Note 5 for information regarding the associated loans receivable and for details regarding the EnergyRight ® Solutions program. |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | During the three months ended December 31, 2017 , TVA's total asset retirement obligation ("ARO") liability increased $ 61 million as a result of revisions in estimates and periodic accretion, partially offset by settlement projects that were conducted during this period. The revisions in estimate are primarily related to changes in strategy of asset retirements at certain TVA facilities. The nuclear and non-nuclear accretion expenses were deferred as regulatory assets. During the three months ended December 31, 2017 , $ 36 million of the related non-nuclear regulatory assets were amortized into expense as these amounts were collected in rates. See Note 6 . TVA maintains investment trusts to help fund its decommissioning obligations. See Note 14 — Investment Funds and Note 17 — Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts. Asset Retirement Obligation Activity (1) Nuclear Non-Nuclear Total Balance at September 30, 2017 $ 2,859 $ 1,445 $ 4,304 Settlements — (25 ) (25 ) Revisions in estimate — 46 46 Accretion (recorded as regulatory asset) 32 8 40 Balance at December 31, 2017 $ 2,891 $ 1,474 $ 4,365 Note (1) The current portion of ARO in the amount of $ 159 million and $ 128 million is included in Accounts payable and accrued liabilities at December 31, 2017 , and September 30, 2017 , respectively. |
Debt and Other Obligations
Debt and Other Obligations | 3 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Debt Outstanding Total debt outstanding at December 31, 2017 , and September 30, 2017 , consisted of the following: Debt Outstanding At December 31, 2017 At September 30, 2017 Short-term debt Short-term debt, net $ 2,721 $ 1,998 Current maturities of power bonds 2,031 1,728 Current maturities of long-term debt of variable interest entities 36 36 Current maturities of notes payable 52 53 Total current debt outstanding, net 4,840 3,815 Long-term debt Long-term power bonds (1) 19,362 20,357 Long-term debt of variable interest entities 1,175 1,175 Long-term notes payable 68 69 Unamortized discounts, premiums, issue costs, and other (159 ) (163 ) Total long-term debt, net 20,446 21,438 Total outstanding debt $ 25,286 $ 25,253 Note (1) Includes net exchange gain from currency transactions of $ 118 million at December 31, 2017 , and $ 125 million at September 30, 2017 . Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2017, to December 31, 2017 : Debt Securities Activity Date Amount (1) Interest Rate Redemptions/Maturities electronotes ® First Quarter 2018 $ 47 4.10 % 1997 Series E December 2017 650 6.25 % 2009 Series B December 2017 1 3.77 % Total redemptions/maturities of power bonds 698 Notes payable November 2017 2 1.64 % Total redemptions/maturities of debt $ 700 Note (1) All redemptions were at 100 percent of par. Credit Facility Agreements TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $ 150 million credit facility. This credit facility was renewed for 2018 with a maturity date of September 30, 2018. 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 December 31, 2017 . The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit. TVA also has funding available under four long-term revolving credit facilities totaling $ 2.7 billion : a $150 million credit facility that matures on December 12, 2019, a $ 500 million credit facility that matures on February 1, 2021, a $ 1.0 billion credit facility that matures on June 2, 2020, and a $ 1.0 billion credit facility that 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 $ 2.7 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 December 31, 2017 , and September 30, 2017 , there were approximately $ 1.0 billion and $ 1.2 billion , respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 13 — Other Derivative Instruments — Collateral . The following table provides additional information regarding TVA's funding available under the four long-term credit facilities: Summary of Long-Term Credit Facilities At December 31, 2017 Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability December 2019 $ 150 $ 37 $ — $ 113 February 2021 500 500 — — June 2020 1,000 268 — 732 September 2020 1,000 224 — 776 Total $ 2,650 $ 1,029 $ — $ 1,621 Lease/Leasebacks TVA previously entered into leasing transactions to obtain third-party financing for 24 peaking combustion turbine units ("CTs") as well as certain qualified technological equipment and software (collectively, “QTE”). Due to TVA’s continuing involvement with the combustion turbine facilities and the QTE during the leaseback term, TVA accounted for the lease proceeds as financing obligations. On September 20, 2017, TVA acquired 100 percent of the equity interests in two special purpose entities ("SPEs") created for the purpose of facilitating a portion of the leaseback arrangements. As a result of the acquisition, TVA effectively settled $70 million of its leaseback obligations related to eight CTs. On July 20, 2016, TVA acquired 100 percent of the equity interests in two SPEs created for the purpose of facilitating lease/leaseback arrangements. As a result of the acquisition, TVA effectively settled $70 million of its leaseback obligations related to eight CTs. At both December 31, 2017 , and September 30, 2017 , the outstanding leaseback obligations related to the remaining CTs and QTE were $338 million . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) ("AOCI") represents market valuation adjustments related to TVA’s currency swaps. The currency swaps are cash flow hedges and are the only derivatives in TVA’s portfolio that have been designated and qualify for hedge accounting treatment. TVA records exchange rate gains and losses on its foreign currency-denominated debt in net income and marks its currency swap assets and liabilities to market through other comprehensive income (loss) ("OCI") . TVA then reclassifies an amount out of AOCI into net income, offsetting the exchange gain/loss recorded on the debt. During the three months ended December 31, 2017 and 2016 , TVA reclassified $ 3 million of gains and $38 million of losses, respectively, related to its cash flow hedges from AOCI to Interest expense. 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 6 for a schedule of regulatory assets and liabilities. See Note 13 for a discussion of the recognition in AOCI of gains and losses associated with certain derivative contracts. See Note 14 for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 16 for a discussion of the regulatory accounting related to components of TVA’s benefit plans. |
Risk Management Activities and
Risk Management Activities and Derivative Transactions | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 has suspended its Financial Trading Program ("FTP") and no longer uses financial instruments to hedge risks related to commodity prices; however, TVA plans to continue to manage fuel price volatility through other methods and to periodically reevaluate its suspended FTP program for 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 OCI Three Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative Hedging Instrument 2017 2016 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. $ 39 $ (8 ) Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Three Months Ended Derivatives in Cash Flow Hedging Relationship 2017 2016 Currency swaps $ 3 $ (38 ) Note (1) There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $ 1 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 net exchange gain on the debt. Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment (1) Amount of Gain (Loss) Recognized in Income on Derivatives Three Months Ended Derivative Type Objective of Derivative Accounting for Derivative Instrument 2017 2016 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in interest expense when incurred during the settlement period. $ (24 ) $ (26 ) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses due to contract settlements are recognized in fuel expense as incurred. 3 (2 ) Commodity derivatives under FTP To protect against fluctuations in market prices of purchased commodities (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production. 8 (14 ) Note (1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months ended December 31, 2017 and 2016 . Fair Values of TVA Derivatives At December 31, 2017 At September 30, 2017 Derivatives That Receive Hedge Accounting Treatment Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (59 ) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(55) $ (67 ) Accounts payable and £250 million Sterling 1 Accounts payable and accrued liabilities $(4); Other long-term assets $5 (15 ) Accounts payable and £150 million Sterling (7 ) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(4) (21 ) Accounts payable and At December 31, 2017 At September 30, 2017 Derivatives That Do Not Receive Hedge Accounting Treatment Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional (1,052 ) Accounts payable and (1,093 ) Accounts payable and $476 million notional (394 ) Accounts payable and (410 ) Accounts payable and $42 million notional (8 ) Accounts payable and (8 ) Accounts payable and Commodity contract derivatives (77 ) Other current assets $10; Other long-term assets $6; Other long-term liabilities $(35); Accounts payable and accrued liabilities $(58) (60 ) Other current assets $8; Other long-term assets $2; Other long-term liabilities $(9); Accounts payable and accrued liabilities $(61) FTP Derivatives under FTP (1) — (5 ) Other current assets $(4); Accounts payable and accrued liabilities $(1) Note (1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $4 million at September 30, 2017 , were recorded in TVA's margin cash accounts in Other current assets. These derivatives were 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. At December 31, 2017 , TVA had no derivatives under the FTP in net liability positions. 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 three currency swaps outstanding as of December 31, 2017 , with total currency exposure of £600 million and expiration dates ranging from 2021 to 2043 . When the dollar strengthens against the British pound sterling, the exchange gain on the Bond liability is offset by an equal amount of loss on the swap contract that is reclassified out of AOCI. Conversely, the exchange loss on the Bond liability is offset by an equal amount of gain on the swap contract that is reclassified out of AOCI. 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. The values of the currency swap asset and liabilities are included in Other long-term assets, Accounts payable and accrued liabilities, and Other long-term liabilities on the consolidated balance sheets. Derivatives Not Receiving Hedge Accounting Treatment Interest Rate Derivatives . Generally TVA uses interest rate swaps to fix variable short-term debt to a fixed rate, and 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 gains or losses are realized. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the consolidated balance sheets, and realized gains and losses, if any, are included in TVA's consolidated statements of operations. For the three months ended December 31, 2017 and 2016 , the changes in fair market value of the interest rate swaps resulted in deferred unrealized gains of $ 28 million and $ 441 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 market values as regulatory assets or liabilities on a gross basis. At December 31, 2017 , TVA's coal contract derivatives had terms of up to three years and natural gas contract derivatives had terms of up to four years. Commodity Contract Derivatives At December 31, 2017 At September 30, 2017 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 11 23 million tons $ (73 ) 20 17 million tons $ (67 ) Natural gas contract derivatives 46 253 million mmBtu $ (4 ) 53 271 million mmBtu $ 7 Derivatives Under FTP. TVA has suspended its FTP and no longer uses financial instruments to hedge risks related to commodity prices. At December 31, 2017 , TVA had no open commodity derivatives under the FTP. Derivatives Under Financial Trading Program (1) At December 31, 2017 At September 30, 2017 Notional Amount (in mmBtu) Fair Value (MtM) (in millions) Notional Amount (in mmBtu) Fair Value (MtM) (in millions) Natural gas Swap contracts — $ — 2,800,000 $ (5 ) Note (1) Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts. Prior to the suspension of the FTP, TVA deferred all FTP unrealized gains (losses) as regulatory liabilities (assets) and recorded only realized gains or losses to match the delivery period of the underlying commodity. 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 December 31, At September 30, 2017 FTP unrealized gains (losses) deferred as regulatory liabilities (assets) Natural gas $ — $ (5 ) Financial Trading Program Realized Gains (Losses) Three Months Ended 2017 2016 Decrease (increase) in fuel expense Natural gas $ (6 ) $ (11 ) Decrease (increase) in purchased power expense Natural gas (2 ) (3 ) Offsetting of Derivative Assets and Liabilities The amounts of TVA's derivative instruments as reported in the consolidated balance sheets at December 31, 2017 , and September 30, 2017 , are shown in the table below: Derivative Assets and Liabilities At December 31, 2017 Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Balance Sheet (1) Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) Assets Currency swaps (3) $ 1 $ — $ 1 Commodity derivatives not subject to master netting or similar arrangement $ 16 $ — $ 16 Total assets $ 17 $ — $ 17 Liabilities Currency swaps (3) $ 66 $ — $ 66 Interest rate swaps (3) 1,454 — 1,454 Total derivatives subject to master netting or similar arrangement 1,520 — 1,520 Commodity derivatives not subject to master netting or similar arrangement 93 — 93 Total liabilities $ 1,613 $ — $ 1,613 At September 30, 2017 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 Commodity derivatives not subject to master netting or similar arrangement $ 10 $ — $ 10 Liabilities Currency swaps (3) $ 103 $ — $ 103 Interest rate swaps (3) 1,511 — 1,511 Commodity derivatives under FTP 5 (4 ) 1 Total derivatives subject to master netting or similar arrangement 1,619 (4 ) 1,615 Commodity derivatives not subject to master netting or similar arrangement 70 — 70 Total liabilities $ 1,689 $ (4 ) $ 1,685 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 that are not offset in the consolidated balance sheets. (3) Letters of credit of approximately $ 1.0 billion and $ 1.2 billion were posted as collateral at December 31, 2017 , and September 30, 2017 , respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. Other Derivative Instruments Investment Fund Derivatives . Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT") , the Asset Retirement Trust ("ART") , the Supplemental Executive Retirement Plan ("SERP") , and the TVA Deferred Compensation Plan ("DCP"). All securities in these trusts and plans are classified as trading. See Note 14 — Investment Funds for a discussion of the trusts and plans and the types of investments that they hold. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At December 31, 2017 , and September 30, 2017 , the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $37 million and $ 19 million at December 31, 2017 , and September 30, 2017 , respectively. Collateral . TVA's interest rate swaps and currency swaps contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At December 31, 2017 , the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $ 1.5 billion . TVA's collateral obligations at December 31, 2017 , under these arrangements were approximately $ 1 billion , for which TVA had posted approximately $ 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 Risk TVA may be exposed to certain risks when a counterparty has the potential to fail to meet its obligations in accordance with agreed terms. These risks may be related to credit, operational, or nonperformance matters. To mitigate certain counterparty 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 when required, employs credit mitigation measures, such as collateral or prepayment arrangements and master purchase and sale agreements, to mitigate credit risk. Customers . TVA is exposed to counterparty credit risk associated with trade accounts receivable from delivered power sales to LPCs, and from industries and federal agencies directly served, all located in the Tennessee Valley region. TVA is also exposed to risk 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. See Note 1 — Allowance for Uncollectible Accounts and Note 3 . 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. Nuclear fuel requirements, including uranium mining and milling, conversion services, enrichment services, and fabrication services, are met from various suppliers, depending on the type of service. TVA purchases the majority of its natural gas requirements from a variety of suppliers under short-term contracts. To help ensure a reliable supply of coal, TVA had coal contracts with multiple suppliers at December 31, 2017 . The contracted supply of coal is sourced from multiple geographic regions of the United States and is to be delivered via various transportation methods (i.e., barge, rail, and truck). Emerging technologies, environmental regulations, and low natural 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 and bankruptcies. Continued difficulties by coal suppliers could result in consolidations, additional bankruptcies, restructurings, contract renegotiations, or other scenarios. 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. On March 29, 2017, one of TVA’s suppliers, Westinghouse Electric Company (“Westinghouse”), filed for protection under Chapter 11 of the United States Bankruptcy Code. On January 4, 2018, Brookfield Business Partners L.P. ("Brookfield Business Partners"), together with institutional partners, announced that they have entered into an agreement to acquire 100% of Westinghouse, which is currently owned by Toshiba Corp. Brookfield Business Partners is listed on the New York and Toronto stock exchanges and is the flagship listed business services and industrials company of Brookfield Asset Management Inc., a leading global alternative asset manager with over $265 billion of assets under management, of which approximately $141 billion are in the U.S. Closing of the transaction remains subject to Bankruptcy Court approval and customary closing conditions including, among others, regulatory approvals. Closing is expected to occur in the fourth quarter of 2018. TVA has a power purchase agreement that expires on March 31, 2032, with a supplier of electricity for 440 megawatts ("MW") of summer net capability from a lignite-fired generating plant. TVA has determined that the supplier has the equivalent of a non-investment grade credit rating; therefore, the supplier has provided credit assurance to TVA under the terms of the agreement. Derivative Counterparties . TVA has entered into physical and financial contracts that qualify as derivatives for hedging purposes, and TVA's NDT fund has 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 has 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 December 31, 2017 , all of TVA's currency swaps and interest rate swaps as well as all of the derivatives in the NDT were with banking counterparties whose Moody's credit ratings were A3 or higher. TVA classifies qualified forward coal and natural gas contracts as derivatives. See Derivatives Not Receiving Hedge Accounting Treatment above. At December 31, 2017 , the coal derivative contracts were with counterparties whose Moody's credit rating, or TVA’s internal analysis when such information was unavailable, ranged from C , or D, respectively, to Ba3 . At December 31, 2017 , the natural gas derivative contracts were with counterparties whose Moody's ratings ranged from B1 to A2 . See Suppliers above for discussion of challenges facing the coal industry. TVA's total value for derivative contracts with coal and natural gas counterparties in an asset position as of December 31, 2017 , was approximately $16 million . TVA previously utilized two futures commission merchants ("FCMs") to clear commodity contracts, including futures, options, and similar financial derivatives. These transactions were executed under the FTP by the FCMs on exchanges on behalf of TVA. TVA maintained margin cash accounts with the FCMs. TVA made deposits to the margin cash accounts to adequately cover any net liability positions on its derivatives transacted with the FCMs. At December 31, 2017 , TVA had no positions under the FTP. See the note to the Fair Values of TVA Derivatives table above. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
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 1 is the highest and Level 3 is the lowest) 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 DCP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's consolidated balance sheets and consolidated statements of comprehensive income (loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the consolidated statements of operations or the consolidated statements of cash flows related to these fair value measurements. Investment Funds At December 31, 2017 , Investment funds were composed of $ 2.7 billion of securities classified as trading and measured at fair value. Trading securities are held in the NDT, ART, SERP, and DCP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The balances in the NDT and ART were $ 1.9 billion and $ 655 million , respectively, at December 31, 2017 . TVA established a SERP to provide benefits to selected employees of TVA which are comparable to those provided by competing organizations. The DCP is designed to provide participants with the ability to defer compensation until employment with TVA ends. NDT and SERP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity market performance, and ART and DCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall debt and equity market performance. The NDT, ART, SERP, and DCP are composed of multiple types of investments and are managed by external institutional investment managers. Most U.S. and international equities, U.S. Treasury inflation-protected securities, real estate investment trust securities, and cash securities and certain derivative instruments are measured based on quoted exchange prices in active markets and are classified as Level 1 valuations. Fixed-income investments, high-yield fixed-income investments, currencies, and most derivative instruments are non-exchange traded and are classified as Level 2 valuations. These measurements are based on market and income approaches with observable market inputs. Private equity limited partnerships and private real estate 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. These investments generally involve a three -to- four -year period where the investor contributes capital, followed by a period of distribution, typically over several years. The investment period is generally, at a minimum, 10 years or longer. The NDT had unfunded commitments related to private equity limited partnerships of $ 49 million and unfunded commitments related to private real estate of $ 5 million at December 31, 2017 . 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 equity limited partnerships and private real estate 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 DCP 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 Commingled funds 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 asset or liability 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 during each period as follows: Unrealized Investment Gains (Losses) Three Months Ended Fund Financial Statement Presentation 2017 2016 SERP Other income (expense) $ 1 $ — NDT Regulatory asset 47 (7 ) ART Regulatory asset 20 3 Currency and Interest Rate Derivatives See Note 13 — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments. Commodity Contract Derivatives 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. Nonperformance Risk The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market. Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs") . TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the counterparty. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2017) 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 less than $1 million decrease in the fair value of assets and a $1 million decrease in the fair value of liabilities at December 31, 2017 . Fair Value Measurements The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2017 , and September 30, 2017 . 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 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Investments Equity securities $ 233 $ — $ — $ 233 Government debt securities 78 69 — 147 Corporate debt securities — 393 — 393 Mortgage and asset-backed securities — 50 — 50 Institutional mutual funds 96 — — 96 Forward debt securities contracts — 37 — 37 Private equity funds measured at net asset value (1) — — — 137 Private real estate funds measured at net asset value (1) — — — 115 Commingled funds measured at net asset value (1) — — — 1,506 Total investments 407 549 — 2,714 Currency swaps (2) — 1 — 1 Commodity contract derivatives — 7 9 16 Total $ 407 $ 557 $ 9 $ 2,731 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities Currency swaps (2) $ — $ 66 $ — $ 66 Interest rate swaps — 1,454 — 1,454 Commodity contract derivatives — 11 82 93 Total $ — $ 1,531 $ 82 $ 1,613 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) 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 13 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 226 $ — $ — $ 226 Government debt securities 100 42 — 142 Corporate debt securities — 373 — 373 Mortgage and asset-backed securities — 49 — 49 Institutional mutual funds 94 — — 94 Forward debt securities contracts — 19 — 19 Private equity funds measured at net asset value (1) — — — 136 Private real estate funds measured at net asset value (1) — — — 113 Commingled funds measured at net asset value (1) — — — 1,451 Total investments 420 483 — 2,603 Commodity contract derivatives — 8 2 10 Total $ 420 $ 491 $ 2 $ 2,613 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 103 $ — $ 103 Interest rate swaps — 1,511 — 1,511 Commodity contract derivatives — 1 69 70 Commodity derivatives under FTP (2) Swap contracts — 1 — 1 Total $ — $ 1,616 $ 69 $ 1,685 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 13 — 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, 2016 $ (127 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 23 Balance at December 31, 2016 $ (104 ) Balance at October 1, 2017 $ (67 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (6 ) Balance at December 31, 2017 $ (73 ) 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 December 31, Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 9 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $12.15 - $112.81/ton Liabilities Commodity contract derivatives $ 82 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $12.15 - $112.81/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2017 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 2 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $11.40 - $112.23/ton Liabilities Commodity contract derivatives $ 69 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $11.40 - $112.23/ton 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 December 31, 2017 , and September 30, 2017 , 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 December 31, 2017 , and September 30, 2017 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At December 31, 2017 At September 30, 2017 Valuation Classification Carrying Amount Fair Value Carrying Amount Fair Value EnergyRight ® receivables (including current portion) Level 2 $ 122 $ 123 $ 125 $ 127 Loans and other long-term receivables, net (including current portion) Level 2 $ 127 $ 113 $ 118 $ 107 EnergyRight ® financing obligation (including current portion) Level 2 $ 140 $ 156 $ 144 $ 161 Unfunded loan commitments Level 2 $ — $ 18 $ — $ 18 Membership interest of variable interest entity subject to mandatory redemption (including current portion) Level 2 $ 32 $ 41 $ 32 $ 41 Long-term outstanding power bonds (including current maturities), net Level 2 $ 21,245 $ 26,134 $ 21,933 $ 26,857 Long-term debt of variable interest entities (including current maturities), net Level 2 $ 1,200 $ 1,366 $ 1,200 $ 1,356 Long-term notes payable (including current maturities) Level 2 $ 120 $ 119 $ 122 $ 121 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 entities 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. |
Other Income (Expense), Net
Other Income (Expense), Net | 3 Months Ended |
Dec. 31, 2017 | |
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 Three Months Ended 2017 2016 Interest income $ 6 $ 6 External services 4 3 Gains (losses) on investments 2 — Miscellaneous — 3 Total other income (expense), net $ 12 $ 12 |
Benefit Plans
Benefit Plans | 3 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans TVA sponsors a qualified defined benefit pension plan ("pension plan") that covers most of its full-time employees hired before July 1, 2014, a qualified defined contribution plan ("401(k) 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. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS") , which is governed by its own board of directors (the "TVARS Board"). The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three months ended December 31, 2017 and 2016 , were as follows: Components of TVA’s Benefit Plans For the Three Months Ended December 31 Pension Benefits Other Post-Retirement Benefits 2017 2016 2017 2016 Service cost $ 14 $ 17 $ 4 $ 5 Interest cost 118 116 5 5 Expected return on plan assets (120 ) (114 ) — — Amortization of prior service credit (25 ) (25 ) (6 ) (6 ) Recognized net actuarial loss 103 116 2 3 Total net periodic benefit cost as actuarially determined 90 110 5 7 Amount capitalized due to actions of regulator (14 ) (34 ) — — Total net periodic benefit cost $ 76 $ 76 $ 5 $ 7 As of October 1, 2016, TVARS’s Rules and Regulations require TVA to contribute to the pension plan the greater of the minimum contribution calculated by TVARS's actuary or $ 300 million for a period of 20 years or until the plan has reached a fully funded status if sooner than 20 years. The minimum required contribution for 2018 is $ 300 million . As of December 31, 2017 , TVA had contributed $ 75 million to TVARS and expects to contribute the remaining $ 225 million by September 30, 2018. TVA contributed $800 million to TVARS in 2017, though the minimum required contribution was $ 300 million . TVA also contributed $ 23 million and $ 20 million to the 401(k) plan during the three months ended December 31, 2017 and 2016 , respectively. TVA does not separately set aside assets to fund its other post-retirement benefit plans, but rather funds such benefits on an as-paid basis. TVA provided approximately $ 12 million and $ 20 million , net of rebates and subsidies, to other post-retirement benefit plans for the three months ended December 31, 2017 and 2016 , respectively. TVA includes its cash contributions to the pension plan in the rate-making formula; accordingly, TVA recognizes 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. |
Contingencies and Legal Proceed
Contingencies and Legal Proceedings | 3 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Legal Proceedings | Contingencies and Legal Proceedings Contingencies Nuclear Insurance . Section 170 of the Atomic Energy Act, commonly known as the Price-Anderson Act, provides a layered framework of protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear event in the United States. For the first layer, all of the Nuclear Regulatory Commission ("NRC") nuclear plant licensees, including TVA, purchase $450 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 seven licensed units, TVA could be required to pay a maximum of $891 million per nuclear incident, but it would have to pay no more than $133 million per incident in any one year. When the contributions of the nuclear plant licensees are added to the insurance proceeds of $450 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. Federal law requires that each NRC power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing or shutting down a reactor after an accident. TVA carries property, decommissioning, and decontamination insurance from Nuclear Electric Insurance Limited ("NEIL") , totaling $5.1 billion for its licensed nuclear plants with up to $2.1 billion available for a loss at any one site. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $126 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 $ 43 million . Decommissioning Costs . TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to nuclear generating plants, coal-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. See Note 10 . 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 December 31, 2017 , the estimated future decommissioning cost of $2.9 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 differences in the underlying assumptions. TVA maintains a NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 14 — Investment Funds . 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 and additional contributions, if necessary, will be available to support decommissioning. TVA’s operating nuclear power units are licensed through 2033 - 2055, depending on the unit. It may be possible to extend the operating life of some of the units with approval from the NRC. Non-Nuclear Decommissioning . The estimated future non-nuclear decommissioning ARO was $1.5 billion at December 31, 2017 . 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. See Note 14 . Estimates involved in determining if additional funding will be made to the ART include inflation rate, rate of return projections on the fund investments, and the planned use of other sources to fund decommissioning costs. Environmental Matters. TVA’s power generation activities, like those across the utility industry and in other industrial sectors, are subject to 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. Environmental requirements placed on the operation of TVA’s coal-fired and other generating units will likely continue to become more restrictive over time. Litigation over emissions or discharges from coal-fired generating units is also occurring, including litigation against TVA. Failure to comply with environmental and safety laws can result in TVA being subject to enforcement actions, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or the shutting down of non-compliant facilities . TVA estimates that compliance with existing and future Clean Air Act ("CAA") requirements (excluding greenhouse gas ("GHG") requirements) could lead to costs of approximately $ 175 million from 2018 to 2022, which include future clean air controls, existing controls capital projects, and air operations and maintenance projects. TVA also estimates additional expenditures of $1 billion from 2018 to 2022 relating to TVA’s coal combustion residuals ("CCR") conversion program, not including costs related to any new requirements related to the Gallatin CCR facilities lawsuits, as well as expenditures of approximately $ 500 million from 2018 to 2024 relating to compliance with Clean Water Act requirements. Future costs could differ from these estimates if new environmental laws or regulations become applicable to TVA or the facilities it operates, or if existing environmental laws or regulations are revised or reinterpreted. There could also be costs that cannot reasonably be predicted at this time, due to uncertainty of actions, that could increase these estimates. Liability for releases and cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and other federal and parallel state statutes. In a manner similar to many other industries and power systems, TVA has generated or used hazardous substances over the years. TVA operations at some facilities have resulted in contamination that TVA is addressing. At December 31, 2017 , and September 30, 2017 , TVA’s estimated liability for cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was approximately $8 million and $7 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 December 31, 2017 , TVA had accrued $ 18 million of probable losses with respect to Legal Proceedings. Of the accrued amount, $ 11 million is included in Other long-term liabilities and $ 7 million is included in Accounts payable and accrued liabilities. 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 Environmental Protection Agency ("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 sulfur dioxide ("SO 2 ") and nitrogen oxide, (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. Case Involving Tennessee Valley Authority Retirement System . In March 2010, eight current and former participants in and beneficiaries of TVARS filed suit in the U.S. District Court for the Middle District of Tennessee challenging the TVARS Board's 2009 decision to amend the TVARS Rules and Regulations (“Rules”) in exchange for a $1.0 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 COLAs 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 violated the substantive and procedural components of an anti-cutback provision in the Rules. TVA and the 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 Sixth Circuit. On August 12, 2016, the Sixth Circuit held that the plaintiffs’ rights were not violated because COLAs are not vested benefits. A few other issues were remanded to the district court for further proceedings. On March 2, 2017, the district court granted TVA's motion for a judgment on the administrative record and dismissed all the remaining claims in this case. The plaintiffs appealed this order, and oral argument before the Sixth Circuit was held on January 31, 2018. Cases Involving Gallatin Fossil Plant CCR Facilities . TVA is a party in two lawsuits relating to alleged releases of waste materials from the CCR facilities at Gallatin. See Note 8 — Background — Lawsuit Brought by TDEC and — Lawsuit Brought by TSRA and TCWN . Petitions to Intervene in the Proceeding Involving the Early Site Permit Application for Small Modular Reactors at TVA's Clinch River Site . Three environmental groups — the Southern Alliance for Clean Energy ("SACE") , Tennessee Environmental Council ("TEC") , and Blue Ridge Environmental Defense League ("BREDL") — filed petitions to intervene in the proceeding regarding the Early Site Permit Application that TVA submitted for review by the NRC in May 2016 relating to the potential future construction and operation of two or more small modular reactor units at TVA’s Clinch River site in Oak Ridge, Tennessee. On October 10, 2017, the Atomic Safety and Licensing Board issued a decision admitting two contentions proffered jointly by SACE and TEC and dismissing a third. The two admitted contentions challenge the application’s environmental report. One of the contentions alleges that the environmental report fails to consider the possibility of a spent fuel pool fire, and the other objects to language in the environmental report regarding the technical advantages of small modular reactors. The decision also denied admission of BREDL’s one proffered contention. On November 6, 2017, TVA appealed the admission of the two contentions to the NRC. Gallatin Fossil Plant Clean Air Act Permit . In August 2016, the Sierra Club filed a petition with the EPA requesting that the EPA object to the CAA renewal permit issued by TDEC to TVA for operations at Gallatin. The petition alleges that the permit (1) contains compliance evaluation requirements for opacity, particulate matter, and fugitive dust that are not as stringent as required, (2) includes allowances for startup, shutdown, and malfunctions that are inconsistent with the CAA, (3) fails to include reporting requirements to ensure compliance with the Environmental Agreements, and (4) contains impermissibly high SO 2 emission limits. On May 15, 2017, the Sierra Club filed a lawsuit in the United States District Court for the District of Columbia seeking to compel the EPA to act on the petition. On November 17, 2017, the District Court ordered the EPA to respond to the petition by January 31, 2018. While proceedings on this petition were ongoing, TDEC modified the CAA renewal permit on November 6, 2017, to address compliance with the 1-hour SO 2 NAAQS. On November 20, 2017, the Sierra Club filed a second petition requesting the EPA to object to the modified permit. On January 31, 2018, the EPA denied both petitions. |
Gallatin Coal Combustion Residu
Gallatin Coal Combustion Residual Facilities (Notes) | 3 Months Ended |
Dec. 31, 2017 | |
Gallatin Coal Combustion Residuals Facilities [Abstract] | |
Gallatin coal combustion residual facilities [Text Block] | Gallatin Coal Combustion Residual Facilities Background TVA is planning to close wet CCR impoundments in accordance with federal and applicable state requirements when (1) coal-fired plants are converted to dry CCR processes and dry storage landfills become operational or (2) the related plant operations cease. Closure project schedules and costs are driven by the selected closure technology. The impoundments at Gallatin are pending additional studies to determine the final closure methodology and schedule. While plans are currently being formulated for the CCR closure methodology for Gallatin, TVA is involved in two lawsuits relating to alleged discharges of pollutants from the CCR facilities at Gallatin. Lawsuit Brought by TDEC . In January 2015, the Tennessee Department of Environment and Conservation ("TDEC") filed a lawsuit against TVA in the Chancery Court for Davidson County, Tennessee. The lawsuit alleges that pollutants have been discharged into waters of the State from CCR facilities at Gallatin in violation of the Tennessee Water Quality Control Act and the Tennessee Solid Waste Disposal Act. TDEC seeks injunctive relief, which could include an order requiring TVA to relocate the CCR facilities. TDEC also requested 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 Tennessee Scenic Rivers Association ("TSRA") and Tennessee Clean Water Network ("TCWN") to intervene in the case, and in January 2016, the court ordered TVA, among other things, to develop and submit to TDEC an environmental investigation plan and an environmental assessment report. On August 4, 2017, TDEC filed an amended complaint adding new facts, claims, and causes of action. Consequently, on August 10, 2017, TVA removed the case from state court to federal court. The case is now in the United States District Court for the Middle District of Tennessee. The plaintiffs have filed motions requesting that the case be remanded to state court and briefing on the motions has been completed. Lawsuit Brought by TSRA and TCWN . In April 2015, TSRA and the TCWN filed a lawsuit against TVA in the United States District Court for the Middle District of Tennessee alleging that pollutants have been discharged into the Cumberland River from CCR facilities at Gallatin in violation of the Clean Water Act ("CWA") . The plaintiffs are seeking injunctive relief, including an order requiring TVA to relocate the CCR facilities, civil penalties of up to $ 37,500 per violation per day, and attorneys’ fees. Trial in this action began on January 30, 2017, and concluded February 2, 2017. On August 4, 2017, the court issued a decision largely in favor of the plaintiffs (the “August 2017 Order”), finding that TVA had discharged pollutants into the Cumberland River in the past and that the discharge was likely ongoing. The court ordered TVA to excavate the CCR materials and move them to a lined facility. The court further required TVA to file within 30 days a timetable for excavating and removing the material. The court did not assess any monetary penalties against TVA for the CWA violations, citing the fact that its order to relocate the CCR material would cause TVA to incur significant costs. On September 5, 2017, TVA submitted the required timetable, which assumes that a new lined facility can be permitted and built on the Gallatin site. The process of obtaining the necessary permits, constructing the facility, and moving all of the CCR materials is estimated to take approximately 24 years. Under current regulations, TVA would be required to monitor the existing facilities and the new facility for 30 years after closure. The estimated cost of the potential Gallatin CCR project is approximately $ 900 million . At December 31, 2017 , related liabilities of $ 875 million and $23 million were recorded in Other long-term liabilities and Accounts payable and accrued liabilities, respectively. Prior to the court’s decision, TVA had anticipated spending approximately $ 200 million to cap and close the existing CCR facilities. On October 2, 2017, TVA appealed the court’s decision to the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit"). Financial Impact In August 2017, TVA began using regulatory accounting treatment to defer expected future costs of compliance with orders or settlements related to lawsuits involving the Gallatin CCR facilities. The TVA Board approved a plan to amortize these costs over the anticipated duration of the Gallatin CCR facilities project (excluding post-closure care), beginning October 1, 2018 as amounts are included in rates or paid out. TVA has estimated these costs to be approximately $ 900 million . These costs include, among other things, environmental studies concerning the existing and new facilities, the licensing activities for the new facility, design and construction of the new facility, relocating the material from the existing facilities to the new facility, closing the existing facilities, monitoring activities, and an amount of additional costs reflecting the expected impacts of inflation given the anticipated duration of the project. The costs do not include such items as any additional order or penalty arising from the TDEC lawsuit, which cannot be reasonably estimated at this time. TVA has not discounted this environmental obligation to a present value amount. TVA also committed in its timetable to complete capital projects related to construction of a permanent bottom ash dewatering facility and wastewater process ponds. These capital projects, which are not included in the estimate for cleanup costs above, are estimated to cost approximately $ 91 million and be completed by 2020. It is reasonably possible that TVA will not be able to obtain the necessary permits to build the facility on the Gallatin site and will be required to move the CCR materials offsite. Offsite relocation would materially increase both the cost and the time to comply with the August 2017 Order. TVA has estimated that if it is required to relocate the materials to a facility off the Gallatin site, TVA may incur up to $ 2.0 billion in expenses. These costs include, among other things, environmental studies concerning the existing and new facilities, the licensing activities for the new facility, design and construction of the new facility, relocating the material from the existing facilities to the new facility, closing the existing facilities, monitoring activities, and an amount of additional costs reflecting the expected impacts of inflation given the anticipated duration of the project. The process of obtaining the necessary permits for offsite disposal, locating or constructing an offsite facility, and moving all of the CCR materials offsite is estimated to take approximately 40 years. TVA would also be required to monitor the existing facilities and the offsite facility for 30 years after the facilities are closed, based on current regulations. The ultimate cost of the removal project will depend on actual timing and results of ongoing litigation, environmental studies, licensing, permitting, site subsurface conditions, contractor availability, weather, equipment, available material resources, and other contingency factors. These contingency factors could cause the project cost estimate to change materially in the near term. TVA updates its estimate for project costs as changes in these factors are determined to be probable of occurring. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
General | General The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("U.S.") that was created in 1933 by legislation enacted by the 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 U.S., 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. |
Fiscal Year | Fiscal Year TVA's fiscal year ends September 30. Years ( 2018 , 2017 , 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 future recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. 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 TVA prepares its consolidated interim financial statements in conformity with GAAP for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2017 , and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2017 (the “Annual Report”). In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for fair presentation are included in the consolidated interim financial statements. The accompanying consolidated interim financial statements, which have been prepared in accordance with GAAP, include the accounts of TVA, wholly-owned direct subsidiaries, and variable interest entities ("VIE") of which TVA is the primary beneficiary. See Note 7 . 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. |
Restricted cash | Restricted Cash Restricted cash reflects amounts to be used primarily for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 17 — Legal Proceedings — Environmental Agreements . |
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 less than $ 1 million at both December 31, 2017 , and September 30, 2017 . TVA had loans receivable of $127 million and $ 118 million at December 31, 2017 , and September 30, 2017 , respectively, and these amounts are reported net of allowances for uncollectible accounts of $1 million at both December 31, 2017 , and September 30, 2017 . The current portion of loans receivable was $3 million at both December 31, 2017 , and September 30, 2017 and is included in Accounts receivable, net. The long-term portions of loans receivable are included in Other long-term assets. |
Pre-Commercial Plant Operations | Pre-Commercial Plant Operations As part of the process of completing the construction of a generating unit, the electricity produced is used to serve the demands of the electric system. TVA estimates revenue from such pre-commercial generation based on the guidance provided by Federal Energy Regulatory Commission ("FERC") regulations. Watts Bar Nuclear Plant ("Watts Bar") Unit 2 commenced pre-commercial plant operations on June 3, 2016, and commercial operations began on October 19, 2016. In addition, the Paradise Combined Cycle Plant commenced pre-commercial plant operations on October 10, 2016, and commercial operations began on April 7, 2017. Furthermore, the Allen Combined Cycle Plant began pre-commercial operations on September 9, 2017. Estimated revenue of $ 1 million and $ 14 million primarily related to these projects was capitalized to offset project costs for the three months ended December 31, 2017 and 2016 , respectively. TVA also capitalized related fuel costs for these construction projects of approximately $ 2 million and $ 5 million during the three months ended December 31, 2017 and 2016 , respectively. In addition to the projects above, Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during the first quarter of 2018. |
Depreciation | 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 rates are determined based on an external depreciation study. TVA concluded and implemented a new depreciation study effective October 1, 2016. This study will be updated at least every five years. Depreciation expense was $319 million and $336 million for the three months ended December 31, 2017 and 2016 , respectively. |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 3 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Variable Interest Entity Policy | A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. 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. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis. |
Gallatin Coal Combustion Resi26
Gallatin Coal Combustion Residual Facilities Regulatory Accounting Treatment (Policies) | 3 Months Ended |
Dec. 31, 2017 | |
Regulatory Asset Accounting Treatment [Abstract] | |
Regulatory Asset Accounting Treatment [Table Text Block] | In August 2017, TVA began using regulatory accounting treatment to defer expected future costs of compliance with orders or settlements related to lawsuits involving the Gallatin CCR facilities. The TVA Board approved a plan to amortize these costs over the anticipated duration of the Gallatin CCR facilities project (excluding post-closure care), beginning October 1, 2018 as amounts are included in rates or paid out. |
Impact of New Accounting Stan27
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Impact of New Accounting Standards and Interpretations The following are accounting standard updates issued by the Financial Accounting Standards Board ("FASB") that TVA adopted during the first quarter of 2018. Derivatives and Hedging - Contingent Put and Call Options in Debt Instruments Description This guidance clarifies the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this update is required to assess the embedded call or put options solely in accordance with a four-step decision sequence. The standard includes interim periods within the fiscal year of adoption and requires a modified retrospective transition. Effective Date for TVA October 1, 2017 Effect on the Financial Statements or Other Significant Matters 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. If the coupon rate is going to be reset, holders may request, for a limited period of time, redemption of the PARRS at par value, with repayment of principal on the reset date. This put option is otherwise not available. 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 PARRS. TVA has determined under the new guidance that contingent put options that can accelerate the payment of principal on the PARRS are clearly and closely related to their debt hosts. The adoption of this standard did not have a material impact on TVA’s financial condition, results of operations, or cash flows. Inventory Valuation Description This guidance 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 or the retail inventory method (for example, first-in, first-out or average cost). This amendment is intended to simplify the subsequent measurement of inventory. The standard includes interim periods within the fiscal year of adoption and requires a prospective transition. Effective Date for TVA October 1, 2017 Effect on the Financial Statements or Other Significant Matters The adoption of this standard did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standards have been issued but as of December 31, 2017 , were not effective and had not been adopted by TVA. Defined Benefit Costs Description This guidance changes how information about defined benefit costs for pension plans and other post-retirement benefit plans is presented in employer financial statements. The guidance requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit and settlement and curtailment effects, are to be included in nonoperating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA has evaluated the impact of adopting this guidance, and if the guidance had been effective for TVA for the three months ended December 31, 2017 and 2016, TVA would have reclassified $63 million and $62 million, respectively, of net periodic benefit costs from Operating and maintenance expense to Other income (expense), net on the consolidated statements of operations. There will be no impact on the consolidated balance sheets because TVA has historically capitalized the service cost component which is consistent with the new guidance. Financial Instruments Description This guidance applies to the recognition and measurement of financial assets and liabilities. The standard requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). The standard also amends presentation requirements related to certain changes in the fair value of a liability and eliminates certain disclosure requirements of significant assumptions for financial instruments measured at amortized cost on the balance sheet. Public entities must apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. Early adoption is not permitted unless specific early adoption guidance is applied. TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA currently measures all of its equity investments (other than those that result in the consolidation of the investee) at fair value, with changes in the fair value recognized through net income. The TVA Board has authorized the use of regulatory accounting for changes in fair value of certain equity investments, and as a result, those changes in fair value are deferred as regulatory assets or liabilities. TVA currently discloses significant assumptions around its estimates of fair value for financial instruments carried at amortized cost on its consolidated balance sheet. The adoption of this standard is not expected to have a material impact on TVA's financial condition, results of operations or cash flows because TVA holds no available-for-sale securities. Revenue Recognition Description This guidance related to revenue from contracts with customers, including subsequent amendments, replaces the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the guidance is to recognize revenue related to the transfer of goods or services to customers at the amount expected to be collected. The objective of the new standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within and across industries. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers. At adoption, companies must also select a transition method to be applied either retrospectively to each prior reporting period presented or retrospectively with a cumulative effect adjustment to retained earnings at the date of initial adoption. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA will not adopt the standard early. Effect on the Financial Statements or Other Significant Matters While TVA expects most of its revenue to be included in the scope of the new guidance, it has not completed its evaluation of all contracts with customers. TVA’s efforts to date have focused on the scoping of revenue streams and evaluation of contracts with LPCs, which represent the majority of TVA's revenues. TVA is also conducting ongoing evaluations of sales to directly served industrial customers, sales to federal agencies, purchase power agreements, fuel cost adjustments, other revenue streams and the effectiveness of internal control related to revenue recognition. In addition, the power and utilities industry is currently addressing certain industry-specific issues which have not yet been finalized. As the ultimate impact of the new standard has not yet been determined, TVA has not yet elected its transition method. Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments Description This standard adds or clarifies guidance on the classification of certain cash receipts and payments on the statement of cash flows as follows: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of the predominance principle to separately identifiable cash flows. Effective Date for TVA This standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. TVA will apply the standard using a retrospective transition method to each period presented. Effect on the Financial Statements or Other Significant Matters TVA’s previous treatment of the classification of certain cash receipts and cash payments is consistent with the new standard and will have no impact on TVA’s financial condition, results of operations, or presentation or disclosure of cash flows. Statement of Cash Flows - Restricted Cash Description This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance does not provide a definition of restricted cash or restricted cash equivalents. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2018. While early adoption is permitted, TVA does not currently plan to adopt the standard early. TVA will apply the standard using a retrospective transition method to each period presented. Effect on the Financial Statements or Other Significant Matters Adoption of this standard will result in a change to the amount of cash and cash equivalents and restricted cash explained when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. For the three months ended December 31, 2017, TVA is reflecting $13 million in transfers of cash and cash equivalents to restricted cash within cash flows from operating activities in the consolidated statement of cash flows. Derivatives and Hedging - Improvements to Accounting for Hedging Activities Description This guidance better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2019. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on TVA’s financial condition, results of operations, or cash flows. Lease Accounting Description This guidance changes the provisions of recognition in both the lessee and lessor accounting models. The standard requires entities that lease assets ("lessees") to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance (similar to current capital leases) or operating lease. However, unlike current lease accounting rules, which require only capital leases to be recognized on the balance sheet, the new standard will require both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest on the lease liability separate from amortization expense. The accounting for the owner of the assets leased by the lessee ("lessor accounting") will remain largely unchanged from current lease accounting rules. The standard allows for certain practical expedients to be elected related to lease term determination, separation of lease and non-lease elements, reassessment of existing leases, and short-term leases. When the standard becomes effective, it will include interim periods within that fiscal year and will be required to be applied using a modified retrospective transition. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2019. While early adoption is permitted, TVA does not currently plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA is currently evaluating the potential impact of these changes on its consolidated financial statements and related disclosures. TVA expects the new standard to impact financial position as adoption is expected to increase the amount of assets and liabilities recognized on TVA’s consolidated balance sheets. TVA expects the new standard to have no material impact on results of operations or cash flows. TVA plans to elect certain of the practical expedients included in the new standard. Efforts to date have consisted of evaluating the completeness of TVA’s lease population, the effectiveness of internal control related to leases, appropriate financial statement disclosure, and selection of a lease system solution. TVA is also continuing to monitor unresolved industry implementation issues, including items related to renewables and purchased power agreements, easements, and rights-of-way, and will analyze the related impacts to lease accounting. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | The table below summarizes the types and amounts of TVA’s accounts receivable: Accounts Receivable, Net At December 31, 2017 At September 30, 2017 Power receivables $ 1,373 $ 1,441 Other receivables 128 129 Allowance for uncollectible accounts (1 ) (1 ) Accounts receivable, net $ 1,500 $ 1,569 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA’s inventories: Inventories, Net At December 31, 2017 At September 30, 2017 Materials and supplies inventory $ 758 $ 734 Fuel inventory 322 355 Renewable energy certificates/emission allowance inventory, net 12 15 Allowance for inventory obsolescence (45 ) (39 ) Inventories, net $ 1,047 $ 1,065 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 At September 30, 2017 Loans and other long-term receivables, net $ 124 $ 115 EnergyRight ® receivables 98 100 Prepaid capacity payments 32 34 Commodity contract derivative assets 6 2 Currency swap asset, net 5 — Other 65 72 Other long-term assets $ 330 $ 323 |
Regulatory Assets and Liabili31
Regulatory Assets and Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 At September 30, 2017 Current regulatory assets Deferred nuclear generating units $ 237 $ 237 Unrealized losses on interest rate derivatives 89 93 Unrealized losses on commodity derivatives 57 68 Fuel cost adjustment receivable 12 1 Environmental agreements 3 2 Environmental cleanup costs - Kingston ash spill 44 44 Gallatin coal combustion residual facilities 10 — Other current regulatory assets 3 2 Total current regulatory assets 455 447 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,945 4,009 Unrealized losses on interest rate derivatives 957 982 Gallatin coal combustion residual facilities 889 899 Nuclear decommissioning costs 771 823 Deferred nuclear generating units 703 759 Non-nuclear decommissioning costs 692 703 Environmental cleanup costs - Kingston ash spill 253 263 Unrealized losses on commodity derivatives 35 9 Environmental agreements 12 13 Other non-current regulatory assets 235 238 Total non-current regulatory assets 8,492 8,698 Total regulatory assets $ 8,947 $ 9,145 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 149 $ 153 Fuel cost adjustment — 2 Unrealized gains on commodity derivatives 10 8 Total current regulatory liabilities 159 163 Non-current regulatory liabilities Deferred other post-retirement benefits cost 19 23 Unrealized gains on commodity derivatives 6 2 Total non-current regulatory liabilities 25 25 Total regulatory liabilities $ 184 $ 188 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 , and September 30, 2017 , as reflected in the Consolidated Balance Sheets are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At December 31, 2017 At September 30, 2017 Current liabilities Accrued interest $ 26 $ 11 Accounts payable and accrued liabilities 2 2 Current maturities of long-term debt of variable interest entities 36 36 Total current liabilities 64 49 Other liabilities Other long-term liabilities 30 30 Long-term debt, net Long-term debt of variable interest entities, net 1,164 1,164 Total liabilities $ 1,258 $ 1,243 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 At September 30, 2017 Interest rate swap liabilities $ 1,364 $ 1,418 Gallatin coal combustion residual facilities liability 875 880 Capital lease obligations 181 182 EnergyRight® financing obligation 112 115 Currency swap liabilities 59 92 Commodity contract derivative liabilities 35 9 Membership interests of VIE subject to mandatory redemption 30 30 Environmental agreements liability 12 13 Other 293 316 Total other long-term liabilities $ 2,961 $ 3,055 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity (1) Nuclear Non-Nuclear Total Balance at September 30, 2017 $ 2,859 $ 1,445 $ 4,304 Settlements — (25 ) (25 ) Revisions in estimate — 46 46 Accretion (recorded as regulatory asset) 32 8 40 Balance at December 31, 2017 $ 2,891 $ 1,474 $ 4,365 Note (1) The current portion of ARO in the amount of $ 159 million and $ 128 million is included in Accounts payable and accrued liabilities at December 31, 2017 , and September 30, 2017 , respectively. |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Total debt outstanding at December 31, 2017 , and September 30, 2017 , consisted of the following: Debt Outstanding At December 31, 2017 At September 30, 2017 Short-term debt Short-term debt, net $ 2,721 $ 1,998 Current maturities of power bonds 2,031 1,728 Current maturities of long-term debt of variable interest entities 36 36 Current maturities of notes payable 52 53 Total current debt outstanding, net 4,840 3,815 Long-term debt Long-term power bonds (1) 19,362 20,357 Long-term debt of variable interest entities 1,175 1,175 Long-term notes payable 68 69 Unamortized discounts, premiums, issue costs, and other (159 ) (163 ) Total long-term debt, net 20,446 21,438 Total outstanding debt $ 25,286 $ 25,253 Note (1) Includes net exchange gain from currency transactions of $ 118 million at December 31, 2017 , and $ 125 million at September 30, 2017 . |
Debt Securities Activity | The table below summarizes the long-term debt securities activity for the period from October 1, 2017, to December 31, 2017 : Debt Securities Activity Date Amount (1) Interest Rate Redemptions/Maturities electronotes ® First Quarter 2018 $ 47 4.10 % 1997 Series E December 2017 650 6.25 % 2009 Series B December 2017 1 3.77 % Total redemptions/maturities of power bonds 698 Notes payable November 2017 2 1.64 % Total redemptions/maturities of debt $ 700 Note (1) All redemptions were at 100 percent of par. |
Credit Facility Agreements | |
Summary of Long-Term Credit Facilities | The following table provides additional information regarding TVA's funding available under the four long-term credit facilities: Summary of Long-Term Credit Facilities At December 31, 2017 Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability December 2019 $ 150 $ 37 $ — $ 113 February 2021 500 500 — — June 2020 1,000 268 — 732 September 2020 1,000 224 — 776 Total $ 2,650 $ 1,029 $ — $ 1,621 |
Risk Management Activities an36
Risk Management Activities and Derivative Transactions (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | The following tables summarize the accounting treatment that certain of TVA's financial derivative transactions receive: Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1) Amount of Mark-to-Market Gain (Loss) Recognized in OCI Three Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative Hedging Instrument 2017 2016 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. $ 39 $ (8 ) Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Three Months Ended Derivatives in Cash Flow Hedging Relationship 2017 2016 Currency swaps $ 3 $ (38 ) Note (1) There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $ 1 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 net 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 (1) Amount of Gain (Loss) Recognized in Income on Derivatives Three Months Ended Derivative Type Objective of Derivative Accounting for Derivative Instrument 2017 2016 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in interest expense when incurred during the settlement period. $ (24 ) $ (26 ) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses due to contract settlements are recognized in fuel expense as incurred. 3 (2 ) Commodity derivatives under FTP To protect against fluctuations in market prices of purchased commodities (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production. 8 (14 ) Note (1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months ended December 31, 2017 and 2016 . |
Fair Value of TVA Derivatives | Fair Values of TVA Derivatives At December 31, 2017 At September 30, 2017 Derivatives That Receive Hedge Accounting Treatment Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (59 ) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(55) $ (67 ) Accounts payable and £250 million Sterling 1 Accounts payable and accrued liabilities $(4); Other long-term assets $5 (15 ) Accounts payable and £150 million Sterling (7 ) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(4) (21 ) Accounts payable and At December 31, 2017 At September 30, 2017 Derivatives That Do Not Receive Hedge Accounting Treatment Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional (1,052 ) Accounts payable and (1,093 ) Accounts payable and $476 million notional (394 ) Accounts payable and (410 ) Accounts payable and $42 million notional (8 ) Accounts payable and (8 ) Accounts payable and Commodity contract derivatives (77 ) Other current assets $10; Other long-term assets $6; Other long-term liabilities $(35); Accounts payable and accrued liabilities $(58) (60 ) Other current assets $8; Other long-term assets $2; Other long-term liabilities $(9); Accounts payable and accrued liabilities $(61) FTP Derivatives under FTP (1) — (5 ) Other current assets $(4); Accounts payable and accrued liabilities $(1) Note (1) Fair values of certain derivatives under the FTP that were in net liability positions totaling $4 million at September 30, 2017 , were recorded in TVA's margin cash accounts in Other current assets. These derivatives were 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. At December 31, 2017 , TVA had no derivatives under the FTP in net liability positions. |
Commodity Contract Derivatives | Commodity Contract Derivatives At December 31, 2017 At September 30, 2017 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 11 23 million tons $ (73 ) 20 17 million tons $ (67 ) Natural gas contract derivatives 46 253 million mmBtu $ (4 ) 53 271 million mmBtu $ 7 |
Derivatives Under Financial Trading Program | Derivatives Under Financial Trading Program (1) At December 31, 2017 At September 30, 2017 Notional Amount (in mmBtu) Fair Value (MtM) (in millions) Notional Amount (in mmBtu) Fair Value (MtM) (in millions) Natural gas Swap contracts — $ — 2,800,000 $ (5 ) Note (1) Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts. |
Financial Trading Program Unrealized Gains (Losses) | 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 December 31, At September 30, 2017 FTP unrealized gains (losses) deferred as regulatory liabilities (assets) Natural gas $ — $ (5 ) |
Financial Trading Program Realized Gains (Losses) | Financial Trading Program Realized Gains (Losses) Three Months Ended 2017 2016 Decrease (increase) in fuel expense Natural gas $ (6 ) $ (11 ) Decrease (increase) in purchased power expense Natural gas (2 ) (3 ) |
Offsetting Assets and Liabilities | The amounts of TVA's derivative instruments as reported in the consolidated balance sheets at December 31, 2017 , and September 30, 2017 , are shown in the table below: Derivative Assets and Liabilities At December 31, 2017 Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Balance Sheet (1) Net Amounts of Assets/Liabilities Presented in the Balance Sheet (2) Assets Currency swaps (3) $ 1 $ — $ 1 Commodity derivatives not subject to master netting or similar arrangement $ 16 $ — $ 16 Total assets $ 17 $ — $ 17 Liabilities Currency swaps (3) $ 66 $ — $ 66 Interest rate swaps (3) 1,454 — 1,454 Total derivatives subject to master netting or similar arrangement 1,520 — 1,520 Commodity derivatives not subject to master netting or similar arrangement 93 — 93 Total liabilities $ 1,613 $ — $ 1,613 At September 30, 2017 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 Commodity derivatives not subject to master netting or similar arrangement $ 10 $ — $ 10 Liabilities Currency swaps (3) $ 103 $ — $ 103 Interest rate swaps (3) 1,511 — 1,511 Commodity derivatives under FTP 5 (4 ) 1 Total derivatives subject to master netting or similar arrangement 1,619 (4 ) 1,615 Commodity derivatives not subject to master netting or similar arrangement 70 — 70 Total liabilities $ 1,689 $ (4 ) $ 1,685 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 that are not offset in the consolidated balance sheets. (3) Letters of credit of approximately $ 1.0 billion and $ 1.2 billion were posted as collateral at December 31, 2017 , and September 30, 2017 , respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 during each period as follows: Unrealized Investment Gains (Losses) Three Months Ended Fund Financial Statement Presentation 2017 2016 SERP Other income (expense) $ 1 $ — NDT Regulatory asset 47 (7 ) ART Regulatory asset 20 3 |
Fair Value Measurements | Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Investments Equity securities $ 233 $ — $ — $ 233 Government debt securities 78 69 — 147 Corporate debt securities — 393 — 393 Mortgage and asset-backed securities — 50 — 50 Institutional mutual funds 96 — — 96 Forward debt securities contracts — 37 — 37 Private equity funds measured at net asset value (1) — — — 137 Private real estate funds measured at net asset value (1) — — — 115 Commingled funds measured at net asset value (1) — — — 1,506 Total investments 407 549 — 2,714 Currency swaps (2) — 1 — 1 Commodity contract derivatives — 7 9 16 Total $ 407 $ 557 $ 9 $ 2,731 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities Currency swaps (2) $ — $ 66 $ — $ 66 Interest rate swaps — 1,454 — 1,454 Commodity contract derivatives — 11 82 93 Total $ — $ 1,531 $ 82 $ 1,613 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) 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 13 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 226 $ — $ — $ 226 Government debt securities 100 42 — 142 Corporate debt securities — 373 — 373 Mortgage and asset-backed securities — 49 — 49 Institutional mutual funds 94 — — 94 Forward debt securities contracts — 19 — 19 Private equity funds measured at net asset value (1) — — — 136 Private real estate funds measured at net asset value (1) — — — 113 Commingled funds measured at net asset value (1) — — — 1,451 Total investments 420 483 — 2,603 Commodity contract derivatives — 8 2 10 Total $ 420 $ 491 $ 2 $ 2,613 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 103 $ — $ 103 Interest rate swaps — 1,511 — 1,511 Commodity contract derivatives — 1 69 70 Commodity derivatives under FTP (2) Swap contracts — 1 — 1 Total $ — $ 1,616 $ 69 $ 1,685 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 13 — 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, 2016 $ (127 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 23 Balance at December 31, 2016 $ (104 ) Balance at October 1, 2017 $ (67 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (6 ) Balance at December 31, 2017 $ (73 ) |
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 December 31, Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 9 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $12.15 - $112.81/ton Liabilities Commodity contract derivatives $ 82 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $12.15 - $112.81/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2017 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 2 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $11.40 - $112.23/ton Liabilities Commodity contract derivatives $ 69 Pricing model Coal supply and demand 0.6 - 0.7 billion tons/year Long-term market prices $11.40 - $112.23/ton |
Estimated Values of Financial Instruments Not Recorded at Fair Value | The estimated values of TVA's financial instruments not recorded at fair value at December 31, 2017 , and September 30, 2017 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At December 31, 2017 At September 30, 2017 Valuation Classification Carrying Amount Fair Value Carrying Amount Fair Value EnergyRight ® receivables (including current portion) Level 2 $ 122 $ 123 $ 125 $ 127 Loans and other long-term receivables, net (including current portion) Level 2 $ 127 $ 113 $ 118 $ 107 EnergyRight ® financing obligation (including current portion) Level 2 $ 140 $ 156 $ 144 $ 161 Unfunded loan commitments Level 2 $ — $ 18 $ — $ 18 Membership interest of variable interest entity subject to mandatory redemption (including current portion) Level 2 $ 32 $ 41 $ 32 $ 41 Long-term outstanding power bonds (including current maturities), net Level 2 $ 21,245 $ 26,134 $ 21,933 $ 26,857 Long-term debt of variable interest entities (including current maturities), net Level 2 $ 1,200 $ 1,366 $ 1,200 $ 1,356 Long-term notes payable (including current maturities) Level 2 $ 120 $ 119 $ 122 $ 121 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
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 Three Months Ended 2017 2016 Interest income $ 6 $ 6 External services 4 3 Gains (losses) on investments 2 — Miscellaneous — 3 Total other income (expense), net $ 12 $ 12 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Components of TVA's Benefit Plans | The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three months ended December 31, 2017 and 2016 , were as follows: Components of TVA’s Benefit Plans For the Three Months Ended December 31 Pension Benefits Other Post-Retirement Benefits 2017 2016 2017 2016 Service cost $ 14 $ 17 $ 4 $ 5 Interest cost 118 116 5 5 Expected return on plan assets (120 ) (114 ) — — Amortization of prior service credit (25 ) (25 ) (6 ) (6 ) Recognized net actuarial loss 103 116 2 3 Total net periodic benefit cost as actuarially determined 90 110 5 7 Amount capitalized due to actions of regulator (14 ) (34 ) — — Total net periodic benefit cost $ 76 $ 76 $ 5 $ 7 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies General and Basis of Presentation (Details) People in Millions, $ in Millions | 3 Months Ended | ||
Dec. 31, 2017USD ($)People | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | |
General and Basis of Presentation | |||
Population of TVA's service area | People | 9 | ||
Allowance for uncollectible accounts, accounts receivable | $ 1 | $ 1 | |
Loans receivable, carrying value | 113 | 107 | |
Allowance for loans receivable | 1 | ||
Revenue capitalized during pre-commercial operations | 1 | $ 14 | |
Fuel cost capitalized during pre-commercial operations | 2 | 5 | |
Depreciation expense | 319 | $ 336 | |
Financing Receivable, Recorded Investment, Current | $ 3 | $ 3 |
Impact of New Accounting Stan41
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |||
Restricted cash | $ 13 | $ 0 | |
Reclassification from Operating and maintenance expense to Other income | $ 63 | $ 62 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Accounts Receivable, Net | ||
Power receivables | $ 1,373 | $ 1,441 |
Other receivables | 128 | 129 |
Allowance for uncollectible accounts | (1) | (1) |
Accounts receivable, net | $ 1,500 | $ 1,569 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Inventories, Net | ||
Materials and supplies inventory | $ 758 | $ 734 |
Fuel inventory | 322 | 355 |
Renewable energy certificates/emission allowance inventory, net | 12 | 15 |
Allowance for inventory obsolescence | (45) | (39) |
Inventories, net | $ 1,047 | $ 1,065 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | |
Other Long-Term Assets | ||
EnergyRight® receivables | $ 123 | $ 127 |
Currency swap assets, net | 1 | |
Other long-term assets | 330 | 323 |
Other long-term assets | ||
Other Long-Term Assets | ||
Loans and other long-term receivables, net | 124 | 115 |
EnergyRight® receivables | 98 | 100 |
Prepaid capacity payments | 32 | 34 |
Commodity contract derivative assets | 6 | 2 |
Currency swap assets, net | 5 | 0 |
Other | 65 | 72 |
Accounts Receivable | ||
Other Long-Term Assets | ||
EnergyRight® receivables | $ 24 | $ 25 |
Energy Right | ||
Other Long-Term Assets | ||
Number of days in default | 180 days | |
Energy Right | Minimum | ||
Other Long-Term Assets | ||
EnergyRight loan term | 5 years | |
Energy Right | Maximum | ||
Other Long-Term Assets | ||
EnergyRight loan term | 10 years |
Regulatory Assets and Liabili45
Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 455 | $ 447 |
Non-current regulatory assets | 8,492 | 8,698 |
Regulatory assets | 8,947 | 9,145 |
Current regulatory liabilities | 159 | 163 |
Non-current regulatory liabilities | 25 | 25 |
Regulatory liabilities | 184 | 188 |
Deferred other post-retirement benefits cost | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory liabilities | 19 | 23 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 149 | 153 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 0 | 2 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 10 | 8 |
Non-current regulatory liabilities | 6 | 2 |
Deferred nuclear generating units | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 237 | 237 |
Non-current regulatory assets | 703 | 759 |
Unrealized losses on interest rate derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 89 | 93 |
Non-current regulatory assets | 957 | 982 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 57 | 68 |
Non-current regulatory assets | 35 | 9 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 12 | 1 |
Environmental agreements | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 3 | 2 |
Non-current regulatory assets | 12 | 13 |
Environmental cleanup costs - Kingston ash spill | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 44 | 44 |
Non-current regulatory assets | 253 | 263 |
Gallatin coal combustion residual facilities | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 10 | 0 |
Non-current regulatory assets | 889 | 899 |
Other current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 3 | 2 |
Deferred pension costs and other post-retirement benefits costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 3,945 | 4,009 |
Nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 771 | 823 |
Non-nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 692 | 703 |
Other non-current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 235 | $ 238 |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2013 | Sep. 30, 2012 | |
Variable Interest Entities | |||||
Accrued interest | $ 26 | $ 11 | |||
VIE Financing | |||||
Construction management agreement and lease | 1,258 | 1,243 | $ 400 | $ 1,000 | |
Face amount | $ 40 | ||||
Financial instruments subject to mandatory redemption, interest rate, stated percentage | 7.00% | ||||
Liabilities | |||||
Current maturities of long-term debt of variable interest entities | 36 | $ 36 | |||
Long-term debt of variable interest entities, net | 1,164 | 1,164 | |||
Interest Expense | 15 | $ 15 | |||
SCCG | |||||
VIE Financing | |||||
Face amount | 360 | ||||
JSCCG | |||||
VIE Financing | |||||
Face amount | 900 | ||||
Holdco | |||||
VIE Financing | |||||
Face amount | 100 | ||||
Accounts payable and accrued liabilities | |||||
VIE Financing | |||||
Construction management agreement and lease | 2 | 2 | |||
Total current liabilities | |||||
VIE Financing | |||||
Construction management agreement and lease | 64 | 49 | |||
Other long-term liabilities | |||||
VIE Financing | |||||
Construction management agreement and lease | $ 30 | $ 30 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | |
Other Long-Term Liabilities | |||
Gallatin coal combustion residual facilities estimated cost relocate onsite | $ 900 | ||
Interest rate swap liabilities | 1,454 | $ 1,511 | |
Capital lease obligations | 301 | 302 | |
Currency swap liabilities | [1] | 66 | 103 |
Commodity contract derivative liabilities | 156 | 161 | |
Total other long-term liabilities | 2,961 | 3,055 | |
Other long-term liabilities | |||
Other Long-Term Liabilities | |||
Interest rate swap liabilities | 1,364 | 1,418 | |
Capital lease obligations | 181 | 182 | |
Currency swap liabilities | 59 | 92 | |
Commodity contract derivative liabilities | 112 | 115 | |
Membership interests of VIE subject to mandatory redemption | 30 | 30 | |
Commodity contract derivative liabilities | 35 | 9 | |
Environmental agreements liability | 12 | 13 | |
Other | 293 | 316 | |
Accounts payable and accrued liabilities | |||
Other Long-Term Liabilities | |||
Accrued Environmental Loss Contingencies, Current | 23 | 19 | |
Interest rate swap liabilities | 90 | 93 | |
Commodity contract derivative liabilities | $ 28 | $ 29 | |
[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 13 — Offsetting of Derivative Assets and Liabilities. |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | |
Asset Retirement Obligations | ||
Asset Retirement Obligation, Period Increase (Decrease) | $ 61 | |
Amortization and Depreciation of Decontaminating and Decommissioning Assets | 36 | |
Balance at September 30, 2017 | 4,304 | |
Settlements | (25) | |
Revisions in estimate | 46 | |
Accretion (recorded as regulatory asset) | 40 | |
Balance at December 31, 2017 | 4,365 | |
Nuclear | ||
Asset Retirement Obligations | ||
Balance at September 30, 2017 | 2,859 | |
Settlements | 0 | |
Revisions in estimate | 0 | |
Accretion (recorded as regulatory asset) | 32 | |
Balance at December 31, 2017 | 2,891 | |
Non-nuclear | ||
Asset Retirement Obligations | ||
Balance at September 30, 2017 | 1,445 | |
Settlements | (25) | |
Revisions in estimate | 46 | |
Accretion (recorded as regulatory asset) | 8 | |
Balance at December 31, 2017 | 1,474 | |
Accounts payable and accrued liabilities | ||
Asset Retirement Obligations | ||
Current portion of ARO | $ 159 | $ 128 |
Debt and Other Obligations Debt
Debt and Other Obligations Debt Outstanding (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | ||
Short-term debt | ||||
Short-term debt, net | $ 2,721 | $ 1,998 | ||
Current maturities of power bonds | 2,031 | 1,728 | ||
Current maturities of long-term debt of variable interest entities | 36 | 36 | ||
Current maturities of notes payable | 52 | 53 | ||
Total current debt outstanding, net | 4,840 | 3,815 | ||
Long-term debt | ||||
Long-term power bonds | [1] | 19,362 | 20,357 | |
Long-term debt of variable interest entities | 1,175 | 1,175 | ||
Long-term notes payable | 68 | 69 | ||
Unamortized discounts, premiums, issues costs, and other | (159) | (163) | ||
Total long-term debt, net | 20,446 | 21,438 | ||
Total outstanding debt | 25,286 | $ 25,253 | ||
Net exchange gain from currency transactions | $ 118 | $ 125 | ||
[1] | Includes net exchange gain from currency transactions of $118 million at December 31, 2017, and $125 million at September 30, 2017. |
Debt and Other Obligations De50
Debt and Other Obligations Debt Securities Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Debt Instrument | ||||
Redemptions/maturities of power bonds | $ 698 | [1] | $ 527 | |
Total redemptions/maturities of debt | [1] | 700 | ||
Repayments of Notes Payable | 2 | $ 0 | ||
electronotes | ||||
Debt Instrument | ||||
Redemptions/maturities of power bonds | $ 47 | |||
Interest rate | 4.10% | |||
2009 Series B | ||||
Debt Instrument | ||||
Redemptions/maturities of power bonds | $ 1 | |||
Interest rate | 3.77% | |||
Total | ||||
Debt Instrument | ||||
Percent of par value | 100.00% | |||
Notes payable | ||||
Debt Instrument | ||||
Interest rate | 1.64% | |||
Repayments of Notes Payable | $ 2 | |||
1997 Series E | ||||
Debt Instrument | ||||
Redemptions/maturities of power bonds | $ 650 | |||
Interest rate | 6.25% | |||
[1] | All redemptions were at 100 percent of par. |
Debt and Other Obligations Cred
Debt and Other Obligations Credit Facility Agreements (Details) $ in Millions | Dec. 31, 2017USD ($)Credit_facilities | Sep. 30, 2017USD ($) |
Line of Credit | ||
Credit Facility Agreements | ||
Current borrowing capacity for credit facilities | $ 150 | |
Total Cash Borrowings for Credit Facilities | 0 | |
Revolving Credit Facilities | ||
Credit Facility Agreements | ||
Current borrowing capacity for credit facilities | $ 2,700 | |
Number of revolving credit facilities | Credit_facilities | 4 | |
December 2019 Credit Facility | $ 150 | |
February 2021 Credit Facility | 500 | |
June 2020 Credit Facility | 1,000 | |
September 2020 Credit Facility | 1,000 | |
Cash Borrowings-December 2019 Credit Facility | 0 | |
Cash Borrowings-February 2021 Credit Facility | 0 | |
Cash Borrowings-June 2020 Credit Facility | 0 | |
Cash Borrowings-September 2020 Credit Facility | 0 | |
Total Cash Borrowings for Credit Facilities | 0 | |
Remaining Availability, December 2019 Credit Facility | 113 | |
Remaining Availability, February 2021 Credit Facility | 0 | |
Remaining Availability, June 2020 Credit Facility | 732 | |
Remaining Availability, September 2020 Credit Facility | 776 | |
Total Remaining Availability for Credit Facilities | 1,621 | |
Letter of Credit | ||
Credit Facility Agreements | ||
Letter of Credit Outstanding, December 2019 Credit Facility | 37 | |
Letter of Credit Outstanding, February 2021 Credit Facility | 500 | |
Letter of Credit Outstanding, June 2020 Credit Facility | 268 | |
Letter of Credit Outstanding, September 2020 Credit Facility | 224 | |
Amount of letters of credit outstanding for credit facilities | $ 1,000 | $ 1,200 |
Debt and Other Obligations Leas
Debt and Other Obligations Lease/Leaseback Obligations (Details) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017USD ($) | Sep. 20, 2017USD ($) | Jul. 20, 2016USD ($) | |
Debt Disclosure [Abstract] | |||
Leasing transaction, number of units | 24 | ||
Percentage equity interests acquired | 100.00% | ||
Number of Businesses Acquired | 2 | ||
Leaseback obligation settled as a result of acquisition | $ 70 | $ 70 | |
Number of combustion units - Leaseback obligation | 8 | ||
CT and QTE outstanding leaseback obligation | $ 338 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Equity [Abstract] | |||
Reclassification to earnings from cash flow hedges | [1] | $ (3) | $ 38 |
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $1 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
Risk Management Activities an54
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | |||
Net unrealized gain (loss) on cash flow hedges | $ 39,000,000 | $ (8,000,000) | |
Reclassification to earnings from cash flow hedges | [1] | (3,000,000) | 38,000,000 |
Ineffective portion excluded from testing | 0 | $ 0 | |
Reclassification to earnings from cash flow hedges in the next 12 months | $ (1,000,000) | ||
[1] | There were no ineffective portions or amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $1 million of losses from AOCI to interest expense within the next twelve months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
Risk Management Activities an55
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) | 3 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | |||
Derivative | |||||
Amount recognized for unrealized gains (losses) | $ 0 | $ 0 | |||
Change in Unrealized gains (losses) on Interest Rate Derivatives | (28,000,000) | 441,000,000 | |||
Interest Rate Swap | |||||
Derivative | |||||
Gain (loss) recognized in income on derivatives | [1] | (24,000,000) | (26,000,000) | ||
Fair value | (394,000,000) | $ (410,000,000) | |||
Commodity Contract Derivatives | |||||
Derivative | |||||
Gain (loss) recognized in income on derivatives | 3,000,000 | [1] | (2,000,000) | ||
Fair value | (77,000,000) | (60,000,000) | |||
Commodity derivatives under the financial trading program | |||||
Derivative | |||||
Gain (loss) recognized in income on derivatives | [1] | 8,000,000 | $ (14,000,000) | ||
Fair value | [2] | $ 0 | $ (5,000,000) | ||
Coal Contract Derivatives | |||||
Derivative | |||||
Number of contracts | 11 | 20 | |||
Notional amount | 23,000,000 | 17,000,000 | |||
Fair value | $ (73,000,000) | $ (67,000,000) | |||
Natural gas contract derivatives | |||||
Derivative | |||||
Number of contracts | 46 | 53 | |||
Notional amount | 253,000,000 | 271,000,000 | |||
Fair value | $ (4,000,000) | $ 7,000,000 | |||
Natural gas contract derivatives | |||||
Derivative | |||||
Fair value | $ 0 | $ (5,000,000) | |||
[1] | All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in incomebut instead are deferred as regulatory assets and liabilities. As such, there was no related gain (loss) recognized in income for these unrealized gains (losses) for the three months ended December 31, 2017 and 2016. | ||||
[2] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $4 million at September 30, 2017, were recorded in TVA's margin cash accounts in Other current assets. These derivatives were transacted with futures commission merchants, and cash deposits have been posted to the margin cash accounts held with each futures commission merchant to offset the net liability positions in full. At December 31, 2017, TVA had no derivatives under the FTP in net liability positions. |
Risk Management Activities an56
Risk Management Activities and Derivative Transactions Fair Values of TVA Derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | |
Derivatives, Fair Value | |||
Gross amounts of recognized liabilities | $ 1,520 | $ 1,619 | |
200 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | (59) | (67) | |
Gross amounts of recognized liabilities | [1] | 66 | 103 |
200 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (55) | (62) | |
200 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (4) | (5) | |
250 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | 1 | (15) | |
250 million Sterling currency swap | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 5 | ||
250 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (11) | ||
250 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (4) | (4) | |
150 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | (7) | (21) | |
150 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (4) | (19) | |
150 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (3) | (2) | |
$1.0 billion notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (1,052) | (1,093) | |
$1.0 billion notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (988) | (1,027) | |
$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (64) | (66) | |
$476 million notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (394) | (410) | |
$476 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (370) | (385) | |
$476 million notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (24) | (25) | |
$42 million notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (8) | (8) | |
$42 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (6) | (6) | |
$42 million notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (2) | (2) | |
Commodity contract derivatives | |||
Derivatives, Fair Value | |||
Fair value | (77) | (60) | |
Commodity contract derivatives | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 6 | 2 | |
Commodity contract derivatives | Other current assets | |||
Derivatives, Fair Value | |||
Fair value | 10 | 8 | |
Commodity contract derivatives | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (35) | (9) | |
Commodity contract derivatives | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (58) | (61) | |
Commodity derivatives under FTP | |||
Derivatives, Fair Value | |||
Fair value | [2] | 0 | (5) |
Gross amounts of recognized liabilities | 5 | ||
Derivatives in net liability positions | Other current assets | |||
Derivatives, Fair Value | |||
Fair value | $ 0 | (4) | |
Gross amounts of recognized liabilities | 4 | ||
Derivatives in net liability positions | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | $ (1) | ||
[1] | Letters of credit of approximately $1.0 billion and $1.2 billion were posted as collateral at December 31, 2017, and September 30, 2017, 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. | ||
[2] | Fair values of certain derivatives under the FTP that were in net liability positions totaling $4 million at September 30, 2017, were recorded in TVA's margin cash accounts in Other current assets. These derivatives were 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. At December 31, 2017, TVA had no derivatives under the FTP in net liability positions. |
Risk Management Activities an57
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($)Bond_issues | |
Derivative | |
Number of British pound sterling denominated bond transactions | 3 |
Number of currency swaps outstanding | 3 |
Associated TVA bond issues currency exposure | $ | $ 600 |
Minimum | |
Derivative | |
Expiration date range of swaps | 2,021 |
Maximum | |
Derivative | |
Expiration date range of swaps | 2,043 |
Risk Management Activities an58
Risk Management Activities and Derivative Transactions Derivatives Under FTP (Details) $ in Millions | 3 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | ||
Derivative | ||||
Forward Contract Derivative Asset, at Fair Value | $ 37 | $ 19 | ||
Coal Contract | ||||
Derivative | ||||
Notional amount | 23,000,000 | 17,000,000 | ||
Fair value | $ (73) | $ (67) | ||
Natural Gas Contract Derivatives | ||||
Derivative | ||||
Notional amount | 253,000,000 | 271,000,000 | ||
Fair value | $ (4) | $ 7 | ||
Natural Gas Contract Derivatives | ||||
Derivative | ||||
Fair value | 0 | $ (5) | ||
Decrease (increase) in fuel expense | (6) | $ (11) | ||
Decrease (increase) in purchased power expense | $ (2) | $ (3) | ||
Natural Gas swap | ||||
Derivative | ||||
Notional amount | [1] | 0 | 2,800,000 | |
Fair value | [1] | $ 0 | $ (5) | |
Fair Value, Inputs, Level 2 | ||||
Derivative | ||||
Forward Contract Derivative Asset, at Fair Value | $ 37 | $ 19 | ||
[1] | Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts. |
Risk Management Activities an59
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | |
Offsetting Assets [Line Items] | |||
Gross Amounts Offset in the Balance Sheet | [1] | $ 0 | |
Net Amounts of Assets Presented in the Balance Sheet | [2] | 17 | |
Total derivatives not subject to master netting or similar arrangement | [2] | 16 | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 17 | ||
Letter of Credit | |||
Offsetting Assets [Line Items] | |||
Amount of letters of credit outstanding for credit facilities | 1,000 | $ 1,200 | |
Currency Swap | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | [3] | 1 | |
Gross Amounts Offset in the Balance Sheet | [1],[3] | 0 | |
Net Amounts of Assets Presented in the Balance Sheet | [2],[3] | $ 1 | |
Commodity derivatives under FTP | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 10 | ||
Gross Amounts Offset in the Balance Sheet | [1] | 0 | |
Net Amounts of Assets Presented in the Balance Sheet | [2] | $ 10 | |
[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 that are not offset in the consolidated balance sheets. | ||
[3] | Letters of credit of approximately $1.0 billion and $1.2 billion were posted as collateral at December 31, 2017, and September 30, 2017, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Risk Management Activities an60
Risk Management Activities and Derivative Transactions Offsetting for Derivative Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | |
Offsetting Liabilities [Line Items] | |||
Total derivatives not subject to master netting or similar arrangement | [1] | $ 16 | |
Gross amounts of recognized liabilities | 1,520 | $ 1,619 | |
Gross Amounts Offset in the Balance Sheet | [2] | 0 | (4) |
Net Amounts of Liabilities Presented in the Balance Sheet | [1] | 1,613 | 1,685 |
Commodity derivatives not subject to master netting or similar arrangement | [1] | 93 | 70 |
Total | 1,613 | 1,689 | |
Forward Contract Derivative Asset, at Fair Value | 37 | 19 | |
Currency Swap | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | [3] | 66 | 103 |
Gross Amounts Offset in the Balance Sheet | [2],[3] | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | [1],[3] | 66 | 103 |
Interest Rate Contract | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | [3] | 1,454 | 1,511 |
Gross Amounts Offset in the Balance Sheet | [2],[3] | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | [1],[3] | 1,454 | 1,511 |
Commodity derivatives under FTP | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 5 | ||
Gross Amounts Offset in the Balance Sheet | [2] | (4) | |
Net Amounts of Liabilities Presented in the Balance Sheet | [1] | 1 | |
Total derivatives subject to master netting or similar arrangement | |||
Offsetting Liabilities [Line Items] | |||
Net Amounts of Liabilities Presented in the Balance Sheet | [1] | 1,520 | 1,615 |
Letter of Credit | |||
Offsetting Liabilities [Line Items] | |||
Amount of letters of credit outstanding | 1,000 | 1,200 | |
Fair Value, Inputs, Level 2 | |||
Offsetting Liabilities [Line Items] | |||
Forward Contract Derivative Asset, at Fair Value | $ 37 | $ 19 | |
[1] | There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset in the consolidated balance sheets. | ||
[2] | 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. | ||
[3] | Letters of credit of approximately $1.0 billion and $1.2 billion were posted as collateral at December 31, 2017, and September 30, 2017, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Risk Management Activities an61
Risk Management Activities and Derivative Transactions Collateral (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 37 | $ 19 |
Likely cash collateral obligation increase | 22 | |
Securities Pledged as Collateral [Member] | ||
Derivative | ||
Derivative, Net Liability Position, Aggregate Fair Value | 1,500 | |
Derivative, Collateral, Right to Reclaim Cash | 1,000 | |
Letter of Credit | ||
Derivative | ||
Amount of letters of credit outstanding | 1,000 | 1,200 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 37 | $ 19 |
Risk Management Activities an62
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) $ in Millions | Dec. 31, 2017USD ($)merchantsmegawatts | |
Derivative | ||
Number of active future commission merchants | merchants | 2 | |
Total derivatives not subject to master netting or similar arrangement | $ | $ 16 | [1] |
Megawatts of Power Purchase Agreement | ||
Derivative | ||
Megawatts | megawatts | 440 | |
[1] | There are no derivative contracts subject to a master netting arrangement or similar agreement that are not offset in the consolidated balance sheets. |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Investment Gains (Losses) | ||
Investment fund securities classified as trading and measured at fair value | $ 2,700 | |
Balance in NDT | 1,900 | |
Balance in ART | $ 655 | |
Period of time where the investor contributes capital to an investment in a private partnership - minimum | three | |
Period of time where the investor contributes capital to an investment in a private partnership - maximum | four | |
Minimum investment period | 10 years | |
Number of readily available quoted exchange prices for the investments | 0 | |
SERP | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | $ 1 | $ 0 |
NDT | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | 47 | (7) |
ART | ||
Investment Gains (Losses) | ||
Unrealized gains (losses) on investments | 20 | $ 3 |
Equity Funds | ||
Investment Gains (Losses) | ||
NDT unfunded commitments related to private equity and real estate | 49 | |
Real Estate Funds | ||
Investment Gains (Losses) | ||
NDT unfunded commitments related to private equity and real estate | $ 5 |
Fair Value Measurements Fair 64
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Dec. 31, 2017USD ($) |
Nonperformance Risk | |
Derivative credit valuation adjustment, assets | $ 1 |
Derivative credit valuation adjustment, liabilities | $ 1 |
Fair Value Measurements Fair 65
Fair Value Measurements Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 | |
Investments | |||
Equity securities | $ 233 | $ 226 | |
Government debt securities | 147 | 142 | |
Corporate debt securities | 393 | 373 | |
Mortgage and asset-backed securities | 50 | 49 | |
Institutional mutual funds | 96 | 94 | |
Forward debt securities contracts | 37 | 19 | |
Private equity funds measured at net asset value(1) | [1] | 137 | 136 |
Private real estate funds measured at net asset value(1) | [1] | 115 | 113 |
Commingled funds measured at net asset value(1) | [1] | 1,506 | 1,451 |
Total investments | 2,714 | 2,603 | |
Currency swap | 1 | ||
Commodity contract derivatives | 16 | 10 | |
Total | 2,731 | 2,613 | |
Liabilities | |||
Currency swaps | [2] | 66 | 103 |
Interest rate swaps | 1,454 | 1,511 | |
Commodity contract derivatives | 93 | 70 | |
Swap contracts | [2] | 1 | |
Total | 1,613 | 1,685 | |
Fair Value, Inputs, Level 1 | |||
Investments | |||
Equity securities | 233 | 226 | |
Government debt securities | 78 | 100 | |
Corporate debt securities | 0 | 0 | |
Mortgage and asset-backed securities | 0 | 0 | |
Institutional mutual funds | 96 | 94 | |
Forward debt securities contracts | 0 | 0 | |
Private equity funds measured at net asset value(1) | [1] | 0 | 0 |
Private real estate funds measured at net asset value(1) | [1] | 0 | 0 |
Commingled funds measured at net asset value(1) | [1] | 0 | 0 |
Total investments | 407 | 420 | |
Currency swap | 0 | ||
Commodity contract derivatives | 0 | 0 | |
Total | 407 | 420 | |
Liabilities | |||
Currency swaps | [2] | 0 | 0 |
Interest rate swaps | 0 | 0 | |
Commodity contract derivatives | 0 | 0 | |
Swap contracts | [2] | 0 | |
Total | 0 | 0 | |
Fair Value, Inputs, Level 2 | |||
Investments | |||
Equity securities | 0 | 0 | |
Government debt securities | 69 | 42 | |
Corporate debt securities | 393 | 373 | |
Mortgage and asset-backed securities | 50 | 49 | |
Institutional mutual funds | 0 | 0 | |
Forward debt securities contracts | 37 | 19 | |
Private equity funds measured at net asset value(1) | [1] | 0 | 0 |
Private real estate funds measured at net asset value(1) | [1] | 0 | 0 |
Commingled funds measured at net asset value(1) | [1] | 0 | 0 |
Total investments | 549 | 483 | |
Currency swap | 1 | ||
Commodity contract derivatives | 7 | 8 | |
Total | 557 | 491 | |
Liabilities | |||
Currency swaps | [2] | 66 | 103 |
Interest rate swaps | 1,454 | 1,511 | |
Commodity contract derivatives | 11 | 1 | |
Swap contracts | [2] | 1 | |
Total | 1,531 | 1,616 | |
Fair Value, Inputs, Level 3 | |||
Investments | |||
Equity securities | 0 | 0 | |
Government debt securities | 0 | 0 | |
Corporate debt securities | 0 | 0 | |
Mortgage and asset-backed securities | 0 | 0 | |
Institutional mutual funds | 0 | 0 | |
Forward debt securities contracts | 0 | 0 | |
Private equity funds measured at net asset value(1) | [1] | 0 | 0 |
Private real estate funds measured at net asset value(1) | [1] | 0 | 0 |
Commingled funds measured at net asset value(1) | [1] | 0 | 0 |
Total investments | 0 | 0 | |
Currency swap | 0 | ||
Commodity contract derivatives | 9 | 2 | |
Total | 9 | 2 | |
Liabilities | |||
Currency swaps | [2] | 0 | 0 |
Interest rate swaps | 0 | 0 | |
Commodity contract derivatives | 82 | 69 | |
Swap contracts | [2] | 0 | |
Total | $ 82 | $ 69 | |
[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 13 — Offsetting of Derivative Assets and Liabilities. |
Fair Value Measurements Fair 66
Fair Value Measurements Fair Value Measurements Using Significant Unobservable Inputs (Details) tons-per-year in Billions | 3 Months Ended | |||
Dec. 31, 2017USD ($)tons-per-year | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($)tons-per-year | Sep. 30, 2016USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Commodity contract derivatives | $ 16,000,000 | $ 10,000,000 | ||
Commodity contract derivatives | $ 93,000,000 | $ 70,000,000 | ||
Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value measurements tons per year | tons-per-year | 0.7 | 0.7 | ||
Price per ton | $ 112.81 | $ 112.23 | ||
Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value measurements tons per year | tons-per-year | 0.6 | 0.6 | ||
Price per ton | $ 12.15 | $ 11.40 | ||
Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Commodity contract derivatives | 9,000,000 | 2,000,000 | ||
Commodity contract derivatives | 82,000,000 | 69,000,000 | ||
Commodity Contract Derivatives | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance | (73,000,000) | $ (104,000,000) | $ (67,000,000) | $ (127,000,000) |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | $ (6,000,000) | $ 23,000,000 |
Fair Value Measurements Estimat
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Sep. 30, 2017 |
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables (including current portion) | $ 123 | $ 127 |
Loans and other long-term receivables, net (including current portion) | 113 | 107 |
EnergyRight® financing obligation (including current portion) | 156 | 161 |
Unfunded loan commitments | 18 | 18 |
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | 41 | 41 |
Long-term outstanding power bonds (including current maturities), net | 26,134 | 26,857 |
Long-term debt of variable interest entities (including current maturities), net | 1,366 | 1,356 |
Long-term notes payable (including current maturities) | 119 | 121 |
Carrying Value | ||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables (including current portion) | 122 | 125 |
Loans and other long-term receivables, net (including current portion) | 127 | 118 |
EnergyRight® financing obligation (including current portion) | 140 | 144 |
Unfunded loan commitments | 0 | 0 |
Membership interest of variable interest entity subject to mandatory redemption (including current portion) | 32 | 32 |
Long-term outstanding power bonds (including current maturities), net | 21,245 | 21,933 |
Long-term debt of variable interest entities (including current maturities), net | 1,200 | 1,200 |
Long-term notes payable (including current maturities) | $ 120 | $ 122 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income (Expense), Net | ||
External services | $ 4 | $ 3 |
Interest income | 6 | 6 |
Gains (losses) on investments | 2 | 0 |
Miscellaneous | 0 | 3 |
Total other income (expense), net | $ 12 | $ 12 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) | 3 Months Ended |
Dec. 31, 2017plans | |
Retirement Plan Disclosure | |
Number of defined benefit plans | 1 |
Number of unfunded post-retirement health care plans | 2 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 75,000,000 | $ 800,000,000 | |||
Pension Benefits | |||||
Retirement Plan Disclosure | |||||
Service cost | 14,000,000 | $ 17,000,000 | |||
Interest cost | 118,000,000 | 116,000,000 | |||
Expected return on plan assets | (120,000,000) | (114,000,000) | |||
Amortization of prior service cost | (25,000,000) | (25,000,000) | |||
Recognized net actuarial loss | 103,000,000 | 116,000,000 | |||
Total net periodic benefit cost as actuarially determined | 90,000,000 | 110,000,000 | |||
Amount capitalized due to actions of regulator | (14,000,000) | (34,000,000) | |||
Total net periodic benefit cost | 76,000,000 | 76,000,000 | |||
Other Post-retirement Benefits | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | 12,000,000 | 20,000,000 | |||
Service cost | 4,000,000 | 5,000,000 | |||
Interest cost | 5,000,000 | 5,000,000 | |||
Expected return on plan assets | 0 | 0 | |||
Amortization of prior service cost | (6,000,000) | (6,000,000) | |||
Recognized net actuarial loss | 2,000,000 | 3,000,000 | |||
Total net periodic benefit cost as actuarially determined | 5,000,000 | 7,000,000 | |||
Amount capitalized due to actions of regulator | 0 | 0 | |||
Total net periodic benefit cost | $ 5,000,000 | $ 7,000,000 | |||
Scenario, Forecast | Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 225,000,000 | $ 300,000,000 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Retirement Plan Disclosure | |||||
Number of qualified defined contribution plans | 1 | ||||
401(k) Contributions | $ 23,000,000 | $ 20,000,000 | |||
Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | 75,000,000 | $ 800,000,000 | |||
Other Post-retirement Benefits | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 12,000,000 | $ 20,000,000 | |||
Scenario, Forecast | Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 225,000,000 | $ 300,000,000 | |||
Minimum | Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 300,000,000 |
Contingencies and Legal Proce72
Contingencies and Legal Proceedings Contingencies (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2017USD ($)reactorsInsurance_layersProcedures | Sep. 30, 2017USD ($) | |
Loss Contingencies | ||
Nuclear liability insurance | $ 450 | |
Assessment from licensees for each licensed reactor | $ 127 | |
Number of licensed reactors in US | reactors | 102 | |
Nuclear accident assessment limitation per year per unit | $ 19 | |
Maximum assessment per nuclear incident | 891 | |
Maximum payment required per accident in any one year | 133 | |
Total amount of protection available | $ 13,000 | |
Surcharge for legal expenses | 5.00% | |
Number of layers before Congress is required to take action | Insurance_layers | 2 | |
Amount of property, decommissioning, and decontamination insurance carried | $ 5,100 | |
Amount of insurance available for loss at any one site | 2,100 | |
Maximum amount of retrospective premiums | 126 | |
Maximum idemnity if a covered accident takes or keeps a nuclear unit offline | 490 | |
Maximum retrospective premiums | 43 | |
Estimated future decommissioning cost | $ 4,365 | $ 4,304 |
Number of procedures for determining estimates for the costs of nuclear decommissioning | Procedures | 2 | |
Possible additional future costs for compliance with Clean Air Act requirements | $ 175 | |
Possible additional future costs for compliance with CCR requirements | 1,000 | |
Possible additional future costs for compliance with Clean Water requirements. | 500 | |
Estimated liability for cleanup and environmental work | 8 | 7 |
Nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 2,891 | 2,859 |
Non-nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | $ 1,474 | $ 1,445 |
Contingencies and Legal Proce73
Contingencies and Legal Proceedings Legal Proceedings (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($)PeoplemegawattsGroupsUnitsYearsAgreements | |
General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 18 |
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 environmental advocacy groups | Groups | 3 |
Number of units to be idled | Units | 18 |
Megawatts | megawatts | 2,200 |
Megawatts option 2 | 3,500 |
Amount to be invested in certain TVA environmental projects | $ 290 |
Amount to be provided to fund environmental projects | 60 |
Amount to pay civil penalties | $ 10 |
Case Involving Tennessee Valley Authority Retirement System | |
Legal Proceedings | |
Number of participants that filed suit | People | 8 |
Contribution from TVA | $ 1,000 |
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 |
Other long-term liabilities | General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 11 |
Accounts payable and accrued liabilities | General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 7 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Subsequent Event [Line Items] | |||
Redemptions/maturities of power bonds | $ 698 | [1] | $ 527 |
[1] | All redemptions were at 100 percent of par. |
Gallatin Coal Combustion Resi75
Gallatin Coal Combustion Residual Facilities (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | |
Other Long-Term Liabilities | ||
Current regulatory assets | $ 455,000,000 | $ 447,000,000 |
Gallatin coal combustion residual facilities original estimated cost for dewatering facility | 91,000,000 | |
Gallatin coal combustion residual facilities estimated cost relocate offsite | 2,000,000,000 | |
Gallatin coal combustion residual facilities estimated cost to cap and close | 200,000,000 | |
TDEC civil penalties related to Gallatin | 17,000 | |
Plaintiff civil penalties related to Gallatin | 37,500 | |
Gallatin coal combustion residual facilities estimated cost relocate onsite | 900,000,000 | |
Other long-term liabilities | ||
Other Long-Term Liabilities | ||
Gallatin coal combustion residual facilities | 875,000,000 | 880,000,000 |
Removal Costs | ||
Other Long-Term Liabilities | ||
Current regulatory assets | $ 10,000,000 | $ 0 |