DEI Document
DEI Document - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Document Information [Line Items] | ||||
Other revenue | $ 38 | $ 39 | $ 82 | $ 79 |
Defined Benefit Plan, Other Cost (Credit) | $ 65 | $ 65 | $ 129 | $ 128 |
Entity Registrant Name | Tennessee Valley Authority | |||
Entity Central Index Key | 0001376986 | |||
Current Fiscal Year End Date | --09-30 | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | false | |||
Entity Emerging Growth Company | false | |||
Document Type | 10-Q | |||
Document Period End Date | Mar. 31, 2019 | |||
Document Fiscal Year Focus | 2019 | |||
Document Fiscal Period Focus | Q2 | |||
Amendment Flag | false | |||
Entity Common Stock, Shares Outstanding | 0 | 0 | ||
Entity Current Reporting Status | Yes | |||
Entity Public Float | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Operating revenues | ||||
Sales of Electricity | $ 2,712 | $ 2,753 | $ 5,393 | $ 5,262 |
Other revenue | 38 | 39 | 82 | 79 |
Revenues | 2,750 | 2,792 | 5,475 | 5,341 |
Operating expenses | ||||
Fuel | 501 | 495 | 942 | 970 |
Purchased power | 255 | 273 | 552 | 493 |
Operating and maintenance | 800 | 632 | 1,545 | 1,278 |
Depreciation and amortization | 466 | 436 | 811 | 859 |
Tax equivalents | 136 | 126 | 268 | 250 |
Total operating expenses | 2,158 | 1,962 | 4,118 | 3,850 |
Operating income | 592 | 830 | 1,357 | 1,491 |
Other income (expense), net | 14 | 11 | 38 | 23 |
Defined Benefit Plan, Other Cost (Credit) | 65 | 65 | 129 | 128 |
Interest expense | ||||
Interest expense | 300 | 314 | 602 | 636 |
Net income (loss) | $ 241 | $ 462 | $ 664 | $ 750 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Net income (loss) | $ 241 | $ 462 | $ 664 | $ 750 | |
Other comprehensive income (loss) | |||||
Net unrealized gain (loss) on cash flow hedges | 23 | 44 | (29) | 83 | |
Reclassification to earnings from cash flow hedges | [1] | (14) | (28) | 4 | (31) |
Total other comprehensive income (loss) | 9 | 16 | (25) | 52 | |
Total comprehensive income (loss) | $ 250 | $ 478 | $ 639 | $ 802 | |
[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 $40 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Current assets | ||
Cash and cash equivalents | $ 300 | $ 299 |
Accounts receivable, net | 1,394 | 1,657 |
Inventories, net | 1,016 | 961 |
Regulatory assets | 241 | 414 |
Other current assets | 93 | 86 |
Total current assets | 3,044 | 3,417 |
Property, plant, and equipment | ||
Completed plant | 61,712 | 61,114 |
Less accumulated depreciation | (29,803) | (29,335) |
Net completed plant | 31,909 | 31,779 |
Construction in progress | 1,921 | 1,999 |
Nuclear fuel | 1,444 | 1,487 |
Capital leases | 143 | 149 |
Total property, plant, and equipment, net | 35,417 | 35,414 |
Investment funds | 2,862 | |
Debt Securities, Trading, and Equity Securities, FV-NI | 2,835 | |
Regulatory and other long-term assets | ||
Regulatory assets | 6,822 | 6,612 |
Other long-term assets | 347 | 362 |
Total regulatory and other long-term assets | 7,169 | 6,974 |
Total assets | 48,465 | 48,667 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,597 | 1,982 |
Accrued interest | 307 | 305 |
Current portion of leaseback obligations | 40 | 38 |
Current portion of energy prepayment obligations | 0 | 10 |
Regulatory liabilities | 195 | 187 |
Short-term debt, net | 1,617 | 1,216 |
Current maturities of power bonds | 1,032 | 1,032 |
Current maturities of long-term debt of variable interest entities | 38 | 38 |
Current maturities of notes payable | 26 | 46 |
Total current liabilities | 4,852 | 4,854 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 4,318 | 4,476 |
Asset retirement obligations | 4,875 | 4,665 |
Other long-term liabilities | 2,914 | 2,715 |
Leaseback obligations | 223 | 263 |
Regulatory liabilities | 73 | 104 |
Total other liabilities | 12,403 | 12,223 |
Long-term debt, net | ||
Long-term power bonds, net | 19,161 | 20,157 |
Long-term debt of variable interest entities, net | 1,108 | 1,127 |
Long-term notes payable | 22 | 23 |
Total long-term debt, net | 20,291 | 21,307 |
Total liabilities | 37,546 | 38,384 |
Proprietary capital | ||
Power program appropriation investment | 258 | 258 |
Power program retained earnings | 10,069 | 9,404 |
Total power program proprietary capital | 10,327 | 9,662 |
Nonpower programs appropriation investment, net | 560 | 564 |
Accumulated other comprehensive income (loss) | 32 | 57 |
Total proprietary capital | 10,919 | 10,283 |
Total liabilities and proprietary capital | $ 48,465 | $ 48,667 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 323 | $ 1,220 | |
Financing costs, net | 0 | 3 | |
Cash flows from operating activities | |||
Net income (loss) | 664 | 750 | |
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) | 821 | 875 | |
Amortization of nuclear fuel cost | 179 | 189 | |
Non-cash retirement benefit expense | 157 | 162 | |
Prepayment credits applied to revenue | (10) | (50) | |
Amortization of Regulatory Asset | (184) | (26) | |
Changes in current assets and liabilities | |||
Accounts receivable, net | 269 | 230 | |
Inventories and other current assets, net | (83) | 19 | |
Accounts payable and accrued liabilities | (274) | (111) | |
Accrued interest | 6 | 4 | |
Pension contributions | (155) | (154) | |
Other, net | (11) | (30) | |
Net cash provided by operating activities | 1,747 | 1,858 | |
Cash flows from investing activities | |||
Construction expenditures | (862) | (958) | |
Nuclear fuel expenditures | (172) | (177) | |
Loans and other receivables | |||
Advances | (4) | (10) | |
Repayments | 4 | 2 | |
Other, net | (6) | 2 | |
Net cash used in investing activities | (1,040) | (1,141) | |
Long-term debt | |||
Redemptions and repurchases of power bonds | (1,003) | [1] | (700) |
Repayments of Other Long-term Debt | 21 | 18 | |
Redemptions of debt of variable interest entities | (19) | (29) | |
Short-term debt issues (redemptions), net | 378 | (13) | |
Payments on leases and leasebacks | (40) | (39) | |
Other, net | (1) | (4) | |
Net cash provided by (used in) financing activities | (706) | 192 | |
Net change in cash and cash equivalents | 1 | 909 | |
Cash and cash equivalents at end of period | 300 | ||
Significant non-cash transactions | |||
Accrued capital and nuclear fuel expenditures | 281 | 294 | |
Proceeds from Issuance of Unsecured Debt | $ 0 | $ 998 | |
[1] | (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 | 6 Months Ended | ||||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Power Program Appropriation Investment | $ 258 | $ 258 | $ 258 | |||||
Power Program Retained Earnings | 10,069 | 10,069 | 9,404 | |||||
Nonpower Programs Appropriation Investment, Net | 560 | 560 | 564 | |||||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | 32 | 32 | 57 | |||||
Total Proprietary Capital | 10,919 | $ 9,932 | 10,919 | $ 9,932 | $ 10,670 | 10,283 | $ 9,456 | $ 9,133 |
Net income (loss) | 241 | 462 | 664 | 750 | ||||
Total other comprehensive income (loss) | 9 | 16 | (25) | 52 | ||||
Return on power program appropriation investment | (1) | (2) | (3) | (3) | ||||
Power Program Appropriation Investment | ||||||||
Power Program Appropriation Investment | 258 | 258 | 258 | 258 | 258 | 258 | 258 | 258 |
Net income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | 0 | 0 | 0 | 0 | ||||
Power Program Retained Earnings | ||||||||
Power Program Retained Earnings | 10,069 | 9,033 | 10,069 | 9,033 | 9,827 | 9,404 | 8,571 | 8,282 |
Net income (loss) | 243 | 464 | 668 | 754 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | (1) | (2) | (3) | (3) | ||||
Nonpower Programs Appropriation Investment, Net | ||||||||
Nonpower Programs Appropriation Investment, Net | 560 | 568 | 560 | 568 | 562 | 564 | 570 | 572 |
Net income (loss) | (2) | (2) | (4) | (4) | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | 0 | 0 | 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 | 32 | 73 | 32 | 73 | $ 23 | $ 57 | $ 57 | $ 21 |
Net income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | 16 | 52 | ||||||
Return on power program appropriation investment | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | 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 federal legislation in response to a proposal 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 nearly 10 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 (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. TVA fulfilled its obligation under the TVA Act to repay $1.0 billion of the Power Program Appropriation Investment with the 2014 payment, and therefore this item is no longer a component of rate setting. 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 ( 2019 , 2018 , etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years. Cost-Based Regulation Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. Based on current projections, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. All regulatory asset write-offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable. Basis of Presentation 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, 2018 , and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2018 (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 8 . Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact TVA's financial condition, results of operations, or cash flows. Reclassifications Certain historical amounts have been reclassified in the accompanying consolidated financial statements to the current presentation. TVA reclassified $65 million and $128 million of net periodic benefit cost from Operating and maintenance expense to Other net periodic benefit cost in the Consolidated Statements of Operations for the three and six months ended March 31, 2018, respectively, as a result of the retrospective presentation of financing costs due to the implementation of the new accounting standard for defined benefit plan cost effective for TVA October 1, 2018. TVA also reclassified $13 million from Restricted cash and cash equivalents to Other long-term assets on the Consolidated Balance Sheet at September 30, 2018. In the March 31, 2018 Consolidated Statements of Cash Flows, amounts previously reported as $(39) million Fuel cost adjustment deferral, $ (6) million Fuel cost tax equivalents, and $19 million Other, net were consolidated and presented as $(26) million Other regulatory amortization and deferrals. Additionally, $(17) million in cash flows from operating activities previously recorded as $(12) million Accounts payable and accrued liabilities and $(5) million Regulatory asset costs were reclassified to Other, net. Cash, Cash Equivalents, and Restricted Cash Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets in the Consolidated Balance Sheets. Restricted cash and cash equivalents includes cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 19 — Legal Proceedings — Environmental Agreements . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash At March 31, 2019 At September 30, 2018 Cash and cash equivalents $ 300 $ 299 Restricted cash and cash equivalents included in Other long-term assets 23 23 Total Cash, cash equivalents, and restricted cash $ 323 $ 322 Revenues TVA recognizes revenue from contracts with customers to depict the transfer of goods or services to customers in an amount to which the entity expects to be entitled in exchange for those goods or services. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for the customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. In addition to power sales invoiced and recorded during the month, TVA accrues estimated unbilled revenues for power sales provided to five customers whose billing date occurs prior to the end of the month. Exchange power sales are presented in the accompanying Consolidated Statements of Operations as a component of sales of electricity. Exchange power sales are sales of excess power after meeting TVA native load and directly served requirements. Native load refers to the customers on whose behalf a company, by statute, franchise, regulatory requirement, or contract, has undertaken an obligation to serve. TVA engages in other arrangements in addition to power sales. Revenue from activities related to TVA’s overall mission (e.g., generation and transmission of power and stewardship of TVA-owned or controlled property) are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net. From time to time, TVA may transfer fiber optic capacity on TVA’s network to telecommunications service carriers and TVA's local power company customers ("LPCs") . These transactions are structured as indefeasible rights of use ("IRUs"), which are the exclusive right to use a specified amount of fiber optic capacity for a specified term. TVA accounts for the consideration received on transfers of fiber optic capacity and on all of the other elements deliverable under an IRU as revenue ratably over the term of the agreement. TVA does not recognize revenue on any contemporaneous exchanges of its fiber optic capacity for an IRU of fiber optic capacity of the counterparty to the exchange. 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 March 31, 2019 , and September 30, 2018 , for accounts receivable. Additionally, loans receivable of $151 million and $ 138 million at March 31, 2019 , and September 30, 2018 , respectively, are included in Accounts receivable, net and Other long-term assets and are reported net of allowances for uncollectible accounts of less than $1 million at both March 31, 2019 , and September 30, 2018 . 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. The Allen Combined Cycle Plant ("Allen CC") began pre-commercial operations in September 2017, and began commercial operations in April 2018. Cogeneration capability at Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during December 2017. Estimated revenue of $10 million and $11 million related to these projects was capitalized to offset project costs for the three and six months ended March 31, 2018 , respectively. TVA also capitalized related fuel costs for these construction projects of approximately $11 million and $14 million during the three and six months ended March 31, 2018 , respectively. No such amounts were capitalized during the three and six months ended March 31, 2019 . Depreciation TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies. These studies are updated at least every five years. Depreciation expense was $424 million and $331 million for the three months ended March 31, 2019 and 2018 , respectively. Depreciation expense was $732 million and $649 million for the six months ended March 31, 2019 and 2018 , respectively. See Note 5 — Financial Impact for a discussion of the impact of plant closures. |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
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 2019 : 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 post-retirement 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 non-operating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. The guidance requires retrospective presentation of the service and non-service cost components in the Consolidated Statements of Operations. Effective Date for TVA October 1, 2018 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a retrospective basis for the prior period presented resulting in lower operating expenses and higher non-operating expenses in the Consolidated Statements of Operations of $129 million and $128 million for the six months ended March 31, 2019 and 2018, respectively. There was no impact on the Consolidated Balance Sheets because TVA has historically capitalized only 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 October 1, 2018 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, unless regulatory accounting is applied. 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 did not have a material impact on TVA's financial condition, results of operations, or cash flows because changes in fair value accounting are recognized through regulatory accounting. Revenue from Contracts with Customers Description This guidance, 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. Effective Date for TVA October 1, 2018 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard using the modified retrospective method with no material changes to the amount or timing of revenue recognition. In accordance with the modified retrospective method, TVA’s previously issued financial statements have not been restated to comply the new accounting standard. TVA recognizes revenue when it satisfies a performance obligation by transferring control to the customer. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for a customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. TVA utilized certain practical expedients including applying the guidance to open contracts at the date of adoption, applying the guidance to a portfolio of contracts with similar characteristics, and recognizing revenue in the amount for which it has the right to invoice. As a result of adoption of the standard, TVA did not have a cumulative-effect adjustment to proprietary capital. 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 October 1, 2018 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 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 October 1, 2018 Effect on the Financial Statements or Other Significant Matters Adoption of this standard resulted in a change to the beginning-of-period and end-of-period cash and cash equivalents and restricted cash amounts shown on the Consolidated Statements of Cash Flows. TVA applied this standard on a retrospective basis for the prior periods presented. The following accounting standards have been issued but as of March 31, 2019 , were not effective and had not been adopted by TVA: 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 financing 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 the fiscal year of adoption 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. The standard is expected to impact financial position as adoption will increase the amount of assets and liabilities recognized on TVA’s Consolidated Balance Sheets. The standard is not expected to have a material impact on results of operations or cash flows as expense recognition is intended to be substantially the same as the existing standard. TVA plans to elect certain of the practical expedients included in the new standard. TVA has selected a lease system solution and continues to evaluate the completeness of the lease population, the effectiveness of internal control related to leases, and appropriate financial statement disclosure. TVA is also continuing to monitor unresolved industry implementation issues and will analyze the related impacts to lease accounting. Defined Benefit Plans - Disclosure Requirements Description This guidance applies to all employers that sponsor defined benefit pension or other post-retirement plans and modifies or clarifies the disclosure requirements for those plans. The amendments in this update remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Entities are required to apply the amendments retrospectively. Effective Date for TVA The new standard is effective for TVA's annual reporting periods beginning October 1, 2021. 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. Customer's Accounting for Implementation Costs in a Cloud Arrangement That Is a Service Contract Description This guidance relates to the accounting for a customer’s implementation costs in a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing those implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments also provide requirements for the classification of the capitalized costs and related expense and cash flows in the financial statements, the application of impairment guidance to the capitalized costs, and the application of abandonment guidance to the capitalized costs. Entities are required to apply the amendments either retrospectively or prospectively to all implementation costs incurred after the adoption date. Effective Date for TVA The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. Early adoption is permitted, and TVA is currently evaluating its adoption options. 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. Financial Instruments - Credit Losses Description This guidance eliminates the probable initial recognition threshold in current GAAP and, instead, requires an allowance to be recorded for all expected credit losses for certain financial assets that are not measured at fair value. The allowance for credit losses is based on historical information, current conditions, and reasonable and supportable forecasts. The new standard also makes revisions to the other than temporary impairment model for available-for-sale debt securities. Disclosures of credit quality indicators in relation to the amortized cost of financing receivables are further disaggregated by year of origination. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2020. 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. Fair Value Measurement Disclosure Description The guidance changes certain disclosure requirements for fair value measurements. It removes certain disclosure requirements, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of the transfers between levels; and the valuation processes for Level 3 fair value measurements. Some disclosure requirements are added, such as the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2020. 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. TVA is currently evaluating the potential impact on related disclosures. |
Accounts Receivable, Net
Accounts Receivable, Net | 6 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 At September 30, 2018 Power receivables $ 1,322 $ 1,570 Other receivables 72 87 Accounts receivable, net $ 1,394 $ 1,657 Note Allowance for uncollectible accounts was less than $ 1 million at March 31, 2019 and September 30, 2018 , and therefore is not represented in the table above. |
Inventories, Net
Inventories, Net | 6 Months Ended |
Mar. 31, 2019 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At March 31, 2019 At September 30, 2018 Materials and supplies inventory $ 734 $ 725 Fuel inventory 318 266 Renewable energy certificates/emission allowance inventory, net 16 14 Allowance for inventory obsolescence (52 ) (44 ) Inventories, net $ 1,016 $ 961 |
Other Long-Term Assets
Other Long-Term Assets | 6 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets The table below summarizes the types and amounts of TVA's other long-term assets: Other Long-Term Assets At March 31, 2019 At September 30, 2018 Loans and other long-term receivables, net (1) $ 144 $ 125 EnergyRight ® receivables 86 90 Prepaid capacity payments 23 27 Restricted cash and cash equivalents (1) 23 23 Commodity contract derivative assets 10 31 Other 61 66 Other long-term assets $ 347 $ 362 Note (1) Certain historical amounts have been reclassified to conform with current year presentation of Restricted cash and cash equivalents. In association with the EnergyRight ® Solutions program, LPCs offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years . TVA purchases the resulting loans receivable from LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are 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 March 31, 2019 , and September 30, 2018 , the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $ 21 million and $22 million , respectively. See Note 10 for information regarding the associated financing obligation. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 6 Months Ended |
Mar. 31, 2019 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below: Regulatory Assets and Liabilities At March 31, 2019 At September 30, 2018 Current regulatory assets Gallatin coal combustion residual facilities $ 26 $ 38 Unrealized losses on interest rate derivatives 78 73 Environmental agreements — 3 Unrealized losses on commodity contracts 7 4 Environmental cleanup costs – Kingston ash spill 130 266 Fuel cost adjustment receivable — 30 Total current regulatory assets 241 414 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,000 3,119 Non-nuclear decommissioning costs 1,054 1,019 Nuclear decommissioning costs 856 784 Gallatin coal combustion residual facilities 864 861 Unrealized losses on interest rate derivatives 897 692 Environmental agreements 12 11 Unrealized losses on commodity contracts 7 8 Other non-current regulatory assets 132 118 Total non-current regulatory assets 6,822 6,612 Total regulatory assets $ 7,063 $ 7,026 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 144 $ 146 Fuel cost adjustment 19 — Unrealized gains on commodity derivatives 32 41 Total current regulatory liabilities 195 187 Non-current regulatory liabilities Deferred other post-retirement benefits cost 63 73 Unrealized gains on commodity derivatives 10 31 Total non-current regulatory liabilities 73 104 Total regulatory liabilities $ 268 $ 291 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , and September 30, 2018 , as reflected in the Consolidated Balance Sheets are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At March 31, 2019 At September 30, 2018 Current liabilities Accrued interest $ 11 $ 11 Accounts payable and accrued liabilities 2 2 Current maturities of long-term debt of variable interest entities 38 38 Total current liabilities 51 51 Other liabilities Other long-term liabilities 27 28 Long-term debt, net Long-term debt of variable interest entities, net 1,108 1,127 Total liabilities $ 1,186 $ 1,206 Interest expense of $ 14 million for both the three months ended March 31, 2019 and 2018 , and $28 million and $29 million for the six months ended March 31, 2019 and 2018 , respectively, is included in the Consolidated Statements of Operations related to debt of VIEs and membership interests of VIEs subject to mandatory redemption. 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 | 6 Months Ended |
Mar. 31, 2019 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist primarily of liabilities related to certain derivative agreements, liabilities for environmental remediation, and liabilities under agreements related to compliance with certain environmental regulations. The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities At March 31, 2019 At September 30, 2018 Interest rate swap liabilities $ 1,330 $ 1,122 Gallatin coal combustion residual facilities liability 864 862 Capital lease obligations 176 178 Currency swap liabilities 110 81 EnergyRight ® financing obligation 96 102 Paradise pipeline financing obligation (1) 80 80 Accrued long-term service agreement (1) 71 74 Other (1) 187 216 Total other long-term liabilities $ 2,914 $ 2,715 Note (1) Certain amounts have been reclassified to conform with current year presentation. 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 March 31, 2019 , and September 30, 2018 , the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities was approximately $78 million and $77 million , respectively. See Note 14 — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. As of March 31, 2019 , Interest rate swap liabilities increased $ 208 million as compared to September 30, 2018 , primarily due to large decreases in interest rates resulting in higher mark-to-market values on future expected net cash flows. 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 March 31, 2019 , and September 30, 2018 , related liabilities of $ 22 million and $ 30 million , respectively, were recorded in Accounts payable and accrued liabilities. See Note 9 for information regarding the Gallatin CCR facilities. EnergyRight ® Financing Obligation . TVA purchases certain loans receivable from 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. The carrying amount of the financing obligation reported in Accounts payable and accrued liabilities for March 31, 2019 , and September 30, 2018 , was approximately $24 million and $ 25 million , respectively. See Note 6 for information regarding the associated loans receivable. Paradise Pipeline Financing Obligation. TVA reserves firm pipeline capacity on an approximately 19 mile pipeline owned by Texas Gas, which serves TVA’s Paradise Combined Cycle Plant. The capacity contract contains a lease component due to TVA’s exclusive right to use the pipeline. TVA accounts for this lease component as a financing transaction. 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 both March 31, 2019 , and September 30, 2018 , related liabilities of less than $1 million were recorded in Accounts payable and accrued liabilities. Accrued Long-Term Service Agreement. TVA has entered into various long-term service agreements for major maintenance activities at certain of its combined cycle plants. TVA uses the direct expense method of accounting for these arrangements. TVA accrues for parts when it takes ownership and for contractor services when they are rendered. Under certain of these agreements, parts received and services rendered exceed payments made. 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 March 31, 2019 , and September 30, 2018 , related liabilities of $ 15 million and $ 30 million , respectively, were recorded in Accounts payable and accrued liabilities. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Mar. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the six months ended March 31, 2019 , TVA's total asset retirement obligations ("ARO") liability increased $ 198 million as a result of revisions in estimates and periodic accretion, partially offset by settlement activity from ongoing ARO projects at TVA facilities. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the six months ended March 31, 2019 , $ 72 million of the related non-nuclear regulatory assets were amortized into expense as these amounts were collected in rates. See Note 7 . TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 — Investment Funds and Note 19 — 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, 2018 $ 2,989 $ 1,790 $ 4,779 Settlements — (42 ) (42 ) Revisions in estimate — 136 136 Additional Obligation 14 — 14 Accretion (recorded as regulatory asset) 67 23 90 Balance at March 31, 2019 $ 3,070 $ 1,907 $ 4,977 Note (1) The current portion of ARO in the amount of $ 102 million and $ 115 million is included in Accounts payable and accrued liabilities at March 31, 2019 , and September 30, 2018 , respectively. As a result of recent experience in completing settlements at certain facilities, the revisions in non-nuclear estimates increased $ 103 million primarily due to expected costs for asbestos abatement activities across TVA's fossil fleet. In addition, TVA approved a change in the preferred closure method for the Allen West Impoundment from closure in place to closure by removal, which resulted in a cost increase of $ 33 million . |
Debt and Other Obligations
Debt and Other Obligations | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Debt Outstanding Total debt outstanding at March 31, 2019 , and September 30, 2018 , consisted of the following: Debt Outstanding At March 31, 2019 At September 30, 2018 Short-term debt Short-term debt, net $ 1,617 $ 1,216 Current maturities of power bonds 1,032 1,032 Current maturities of long-term debt of variable interest entities 38 38 Current maturities of notes payable 26 46 Total current debt outstanding, net 2,713 2,332 Long-term debt Long-term power bonds (1) 19,298 20,300 Long-term debt of variable interest entities, net 1,108 1,127 Long-term notes payable 22 23 Unamortized discounts, premiums, issue costs, and other (137 ) (143 ) Total long-term debt, net 20,291 21,307 Total outstanding debt $ 23,004 $ 23,639 Note (1) Includes net exchange gain from currency transactions of $146 million and $ 147 million at March 31, 2019 , and September 30, 2018 , respectively. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2018, to March 31, 2019 : Debt Securities Activity Date Amount (1) Interest Rate Redemptions/Maturities electronotes ® First Quarter 2019 $ 1 2.65 % electronotes ® Second Quarter 2019 1 3.48 % 2013 Series A October 2018 1,000 1.75 % 2009 Series B December 2018 1 3.77 % Total redemptions/maturities of power bonds 1,003 Notes payable 21 0.84 % Debt of variable interest entities 19 4.31 % Total redemptions/maturities of debt $ 1,043 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 in 2018 with a maturity date of September 30, 2019. 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 U.S. with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at March 31, 2019 . 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 11, 2021, a $ 500 million credit facility that matures on February 1, 2022, a $ 1.0 billion credit facility that matures on June 13, 2023, and a $ 1.0 billion credit facility that matures on September 28, 2023. 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 March 31, 2019 , and September 30, 2018 , there were approximately $932 million and $ 921 million , respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. See Note 14 — Other Derivative Instruments — Collateral . The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities: Summary of Long-Term Credit Facilities At March 31, 2019 Facility Limit Letters of Credit Outstanding Cash Borrowings Availability Maturity Date December 2021 $ 150 $ 38 $ — $ 112 February 2022 500 500 — — June 2023 1,000 213 — 787 September 2023 1,000 181 — 819 Total $ 2,650 $ 932 $ — $ 1,718 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. At March 31, 2019 , and September 30, 2018 , the outstanding leaseback obligations related to the remaining CTs and QTE were $ 263 million and $301 million , respectively. In March 2019, TVA made final rent payments under lease/leaseback transactions involving eight CTs, and TVA had previously acquired the equity interests related to these transactions. Final rent payments are scheduled to be made under the remaining CT lease/leaseback transactions on various dates from May 2020 to January 2022. TVA has already acquired the equity interests related to transactions involving eight of these CTs and will have the option to acquire the equity interests related to transactions involving remaining eight CTs for additional amounts. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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 and any related accrued interest 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 March 31, 2019 and 2018 , TVA reclassified $ 14 million and $28 million of gains, respectively, related to its cash flow hedges from AOCI to Interest expense. During the six months ended March 31, 2019 and 2018 , TVA reclassified $4 million of losses and $31 million of gains, 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 7 for a schedule of regulatory assets and liabilities. See Note 14 for a discussion of the recognition in AOCI of gains and losses associated with certain derivative contracts. See Note 15 for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 18 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 | 6 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management Activities and Derivative Transactions | Risk Management Activities and Derivative Transactions TVA is exposed to various risks. These include risks related to commodity prices, investment prices, interest rates, currency exchange rates, and inflation as well as counterparty credit and performance risks. To help manage certain of these risks, TVA has historically 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 Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2019 2018 2019 2018 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 $ 23 $ 44 $ (29 ) $ 83 Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationship 2019 2018 2019 2018 Currency swaps $ 14 $ 28 $ (4 ) $ 31 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 $ 40 million of gains from AOCI to interest expense within the next 12 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 Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended Six Months Ended Derivative Type Objective of Derivative Accounting for Derivative Instrument 2019 2018 2019 2018 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 $ (19 ) $ (23 ) $ (39 ) $ (47 ) 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 — — 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 ) 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 and six months ended March 31, 2019 and 2018 . Fair Values of TVA Derivatives At March 31, 2019 At September 30, 2018 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (72 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(67) $ (67 ) Accounts payable and £250 million Sterling (25 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(20) (12 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(7) £150 million Sterling (26 ) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(23) (15 ) Accounts payable and Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (1,020 ) Accounts payable and $ (878 ) Accounts payable and $476 million notional (383 ) Accounts payable and (317 ) Accounts payable and $42 million notional (5 ) Accounts payable and (4 ) Accounts payable and Commodity contract derivatives 28 Other current assets $32; Other long-term assets $10; Other long-term liabilities $(7); Accounts payable and accrued liabilities $(7) 60 Other current assets $41; Other long-term assets $31; Other long-term liabilities $(8); Accounts payable and accrued liabilities $(4) 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 occurre d. TVA had three currency swaps outstanding as of March 31, 2019 , 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 and related accrued interest 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 and related accrued interest 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 and related accrued interest are included in Long-term debt, net and Accounts payable and accrued liabilities, respectively. 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 liabilities are included in 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 mark-to-market ("MtM") gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory assets or liabilities on TVA's Consolidated Balance Sheets and are included in the ratemaking formula when 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 March 31, 2019 and 2018 , the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized losses of $99 million and unrealized gains of $143 million , respectively. For the six months ended March 31, 2019 and 2018 , the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized losses of $209 million and unrealized gains of $171 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 March 31, 2019 , TVA's coal contract derivatives had terms of up to two years, and TVA's natural gas contract derivatives had terms of up to three years. Commodity Contract Derivatives At March 31, 2019 At September 30, 2018 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 16 15 million tons $ 38 13 20 million tons $ 58 Natural gas contract derivatives 42 360 million mmBtu $ (10 ) 61 359 million mmBtu $ 2 Derivatives Under FTP. TVA has suspended its FTP and no longer uses financial instruments to he dge risks related to commodity prices . 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 did not experience any unrealized gains and losses related to the FTP at March 31, 2019 or September 30, 2018 . TVA experienced the following realized losses related to the FTP during the periods set forth in the table below: Financial Trading Program Realized Gains (Losses) Three Months Ended Six Months Ended 2019 2018 2019 2018 Decrease (increase) in fuel expense Natural gas $ — $ — $ — $ (6 ) Decrease (increase) in purchased power expense Natural gas — — — (2 ) Offsetting of Derivative Assets and Liabilities The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets at March 31, 2019 , and September 30, 2018 , are shown in the table below: Derivative Assets and Liabilities At March 31, 2019 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 $ 42 $ — $ 42 Liabilities Currency swaps (3) $ 123 $ — $ 123 Interest rate swaps (3) 1,408 — 1,408 Total derivatives subject to master netting or similar arrangement 1,531 — 1,531 Commodity derivatives not subject to master netting or similar arrangement 14 — 14 Total liabilities $ 1,545 $ — $ 1,545 At September 30, 2018 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 $ 72 $ — $ 72 Liabilities Currency swaps (3) $ 94 $ — $ 94 Interest rate swaps (3) 1,199 — 1,199 Total derivatives subject to master netting or similar arrangement 1,293 — 1,293 Commodity derivatives not subject to master netting or similar arrangement 12 — 12 Total liabilities $ 1,305 $ — $ 1,305 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 $ 932 million and $ 921 million were posted as collateral at March 31, 2019 , and September 30, 2018 , 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"). See Note 15 — Investment Funds for a discussion of the trusts, plans, and types of investments. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At March 31, 2019 , and September 30, 2018 , the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $59 million and $45 million at March 31, 2019 , and September 30, 2018 , 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 March 31, 2019 , 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 March 31, 2019 , under these arrangements were approximately $ 1.0 billion , for which TVA had posted approximately $ 932 million in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the contract as a result of this posted collateral. For all of its derivative instruments with credit-risk related contingent features: • If TVA remains a majority-owned U.S. government entity but Standard & Poor's Financial Services, LLC ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA's credit rating to AA or Aa2, respectively, TVA's collateral obligations would likely increase by $ 22 million , and • If TVA ceases to be majority-owned by the U.S. government, TVA's credit rating would likely be downgraded and TVA would be required to post additional collateral. Counterparty 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. T VA 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 March 31, 2019 . 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, restructuring, 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. 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 and qualified defined benefit pension plan have entered into derivative contracts for investment purposes. If a counterparty to one of the physical or financial derivative transactions defaults, TVA might incur substantial costs in connection with entering into a replacement transaction. If a counterparty to the derivative contracts into which the NDT fund and the qualified pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking and coal industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At March 31, 2019 , 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 March 31, 2019 , the coal contracts were with counterparties whose Moody's credit rating, or TVA’s internal analysis when such information was unavailable, ranged from Ca to Baa2 . At March 31, 2019 , the natural gas contracts were with counterparties whose 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 March 31, 2019 , was approximately $42 million . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. Valuation Techniques The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows: Level 1 — Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing. Level 2 — Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means. Level 3 — Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. A financial instrument's level within the fair value hierarchy (where Level 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 March 31, 2019 , Investment funds were composed of $ 2.8 billion of equity securities and debt securities classified as trading measured at fair value. Equity and trading debt 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 $ 2.1 billion and $ 698 million , respectively, at March 31, 2019 . 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. The NDT, ART, SERP, and DCP funds are invested in portfolios of securities generally designed to achieve a return in line with overall equity and debt 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, private real estate investments, and private credit 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 $ 142 million , unfunded commitments related to private real estate of $ 26 million , and unfunded commitments related to private credit of $11 million at March 31, 2019 . The ART had unfunded commitments related to private equity limited partnerships of $59 million , unfunded commitments related to private real estate of $11 million , and unfunded commitments rela ted to private credit of $6 million at March 31, 2019 . These investments have no redemption or limited redemption options and may also impose restrictions on the NDT's and ART's ability to liquidate their investments. There are no readily available quoted exchange prices for these investments. During the second quarter of 2019, TVA transitioned its valuation methodology for determining the fair value of these investments. The fair value of the investments is now based on TVA's ownership percentage of the fair value of the underlying investments and estimated by TVA utilizing public market equivalent benchmarks. The fair value of these investments were previously based on information provided by the investment managers. These investments are typically valued on a quarterly basis. TVA's private equity limited partnerships, private real estate investments , and private credit 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 equity and trading debt 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 equity and trading debt securities held during each period as follows: Unrealized Investment Gains (Losses) Three Months Ended Six Months Ended Fund Financial Statement Presentation 2019 2018 2019 2018 SERP Other income (expense) $ 5 $ (2 ) $ (1 ) $ — DCP Other income (expense) 1 (1 ) (2 ) — NDT Regulatory asset 154 (75 ) (47 ) (29 ) ART Regulatory asset 52 (14 ) (52 ) 6 Currency and Interest Rate Derivatives See Note 14 — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments. Commodity Contract Derivatives 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 March 31, 2019 . 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 March 31, 2019 , and September 30, 2018 . 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 Significant Other Significant Total Assets Investments Equity securities $ 258 $ — $ — $ 258 Government debt securities 219 50 — 269 Corporate debt securities — 504 — 504 Mortgage and asset-backed securities — 34 — 34 Institutional mutual funds 224 — — 224 Forward debt securities contracts — 59 — 59 Private credit measured at net asset value (1) — — — 19 Private equity funds measured at net asset value (1) — — — 140 Private real estate funds measured at net asset value (1) — — — 128 Commingled funds measured at net asset value (1) — — — 1,200 Total investments 701 647 — 2,835 Commodity contract derivatives — 2 40 42 Total $ 701 $ 649 $ 40 $ 2,877 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 123 $ — $ 123 Interest rate swaps — 1,408 — 1,408 Commodity contract derivatives — 12 2 14 Total $ — $ 1,543 $ 2 $ 1,545 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 14 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 220 $ — $ — $ 220 Government debt securities 199 37 — 236 Corporate debt securities — 499 — 499 Mortgage and asset-backed securities — 50 — 50 Institutional mutual funds 126 — — 126 Forward debt securities contracts — 45 — 45 Private equity funds measured at net asset value (1) — — — 132 Private real estate funds measured at net asset value (1) — — — 124 Commingled funds measured at net asset value (1) — — — 1,430 Total investments 545 631 — 2,862 Commodity contract derivatives — 13 59 72 Total $ 545 $ 644 $ 59 $ 2,934 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 94 $ — $ 94 Interest rate swaps — 1,199 — 1,199 Commodity contract derivatives — 11 1 12 Total $ — $ 1,304 $ 1 $ 1,305 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 14 — 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 Three Months Ended Six Months Ended Balance at beginning of period $ (73 ) $ (67 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 21 15 Balance at March 31, 2018 $ (52 ) $ (52 ) Balance at beginning of period $ 63 $ 58 Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (25 ) (20 ) Balance at March 31, 2019 $ 38 $ 38 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 March 31, Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 40 Pricing model Coal supply and demand 0.6 - 0.8 billion tons/year Long-term market prices $12.30 - $106.21/ton Liabilities Commodity contract derivatives $ (2 ) Pricing model Coal supply and demand 0.6 - 0.8 billion tons/year Long-term market prices $12.30 - $106.21/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2018 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 59 Pricing model Coal supply and demand 0.7 - 0.8 billion tons/year Long-term market prices $12.25 - $112.24/ton Liabilities Commodity contract derivatives $ 1 Pricing model Coal supply and demand 0.7 - 0.8 billion tons/year Long-term market prices $12.25 - $112.24/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 March 31, 2019 , and September 30, 2018 , 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 March 31, 2019 , and September 30, 2018 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At March 31, 2019 At September 30, 2018 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables (including current portion) Level 2 $ 107 $ 106 $ 112 $ 112 Loans and other long-term receivables, net (including current portion) Level 2 $ 151 $ 136 $ 138 $ 123 EnergyRight ® financing obligation (including current portion) Level 2 $ 120 $ 135 $ 127 $ 143 Unfunded loan commitments Level 2 $ — $ 5 $ — $ 3 Membership interest of variable interest entities subject to mandatory redemption (including current portion) Level 2 $ 29 $ 36 $ 30 $ 37 Long-term outstanding power bonds (including current maturities), net Level 2 $ 20,193 $ 24,180 $ 21,189 $ 23,896 Long-term debt of variable interest entities (including current maturities), net Level 2 $ 1,146 $ 1,299 $ 1,165 $ 1,256 Long-term notes payable (including current maturities) Level 2 $ 48 $ 47 $ 69 $ 68 The carrying value of Cash and cash equivalents, Restricted cash and cash equivalents, and Short-term debt, net 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 and membership interests of VIE 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 | 6 Months Ended |
Mar. 31, 2019 | |
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 Six Months Ended 2019 2018 2019 2018 Bellefonte deposit $ — $ — $ 21 $ — Interest income 6 6 12 11 External services 2 4 6 8 Miscellaneous — 1 — 1 Gains (losses) on investments 6 — (1 ) 3 Total other income (expense), net $ 14 $ 11 $ 38 $ 23 During the three months ended March 31, 2019 , other income (expense), net increased $3 million primarily driven by $ 6 million of unrealized gains on the SERP and DCP investments during the quarter. During the six months ended March 31, 2019 , other income (expense), net increased $ 15 million primarily driven by $ 21 million of other income related to a deposit liability received by TVA as a down payment on the sale of Bellefonte. The purchaser, Nuclear Development, LLC, failed to fulfill the requirements of the sales contract with respect to obtaining NRC approval of the transfer of required nuclear licenses and payment of the remainder of the selling price before the November 30, 2018, closing date. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans TVA sponsors a qualified defined benefit 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 post-employment 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 components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and six months ended March 31, 2019 and 2018 , were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended For the Six Months Ended Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2019 2018 2019 2018 2019 2018 2019 2018 Service cost $ 10 $ 13 $ 3 $ 3 $ 22 $ 27 $ 6 $ 7 Interest cost 126 119 5 4 249 237 9 9 Expected return on plan assets (120 ) (119 ) — — (239 ) (239 ) — — Amortization of prior service credit (24 ) (24 ) (6 ) (5 ) (49 ) (49 ) (12 ) (11 ) Recognized net actuarial loss 86 101 1 2 168 204 2 4 Total net periodic benefit cost as actuarially determined 78 90 3 4 151 180 5 9 Amount expensed (capitalized) due to actions of regulator (2 ) (13 ) — — 1 (27 ) — — Total net periodic benefit cost $ 76 $ 77 $ 3 $ 4 $ 152 $ 153 $ 5 $ 9 Note (1) The components of net benefit cost other than the service cost component are included in Other net periodic benefit cost in the Consolidated Statements of Operations. TVA's minimum required pension plan contribution for 2019 is $300 million . TVA contributes $25 million per month to TVARS and as of March 31, 2019 , had contributed $150 million . The remaining $150 million will be contributed by September 30, 2019. For the six months ended March 31, 2019 , TVA also contributed $44 million to the 401(k) plan and $20 million (net of $2 million in rebates) to the other post-retirement plans. TVA has contributed $5 million to the SERP for the six months ended March 31, 2019, and expects to contribute an additional $1 million in 2019. |
Contingencies and Legal Proceed
Contingencies and Legal Proceedings | 6 Months Ended |
Mar. 31, 2019 | |
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 U.S. This protection consists of two layers of coverage: • The primary level is private insurance underwritten by American Nuclear Insurers ("ANI") and provides public liability insurance coverage of $450 million for each operating reactor. If this amount is not sufficient to cover claims arising from an accident, the second level, Secondary Financial Protection, applies. • Within the Secondary Financial Protection level, the owner of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $138 million per reactor per incident. With TVA’s seven reactors, the maximum total contingent obligation per incident is $963 million . This retrospective premium is payable at a rate currently set at approximately $20 million per year per incident per reactor. Currently, 99 reactors are participating in the Secondary Financial Protection program. In the event that a nuclear power plant event results in third-party damages, the primary level provided by ANI combined with the Secondary Financial Protection would provide approximately $14.1 billion in coverage. 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 $128 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 $ 44 million . Workers' Compensation. The Federal Employees' Compensation Act ("FECA") governs liability to TVA employees for service-connected injuries. TVA purchases insurance that compensates TVA for certain FECA costs. In addition, TVA sponsors an Owner Controlled Insurance Program ("OCIP") that provides workers' compensation and liability insurance for a select group of contractors performing maintenance, modifications, outage, and new construction activities at TVA facilities. The insurance and OCIP are subject to the terms and conditions of the relevant policies including deductibles and self-insured retentions. To the extent insurance would not provide either a partial or total recovery of the costs associated with a loss, TVA would have to recover any such costs through other means, including through power rates. 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 11 . 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 March 31, 2019 , the estimated future decommissioning cost of $3.1 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 15 — 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 various dates between 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 $1.9 billion at March 31, 2019 . 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 selected closure methodology, changes in available technology, and changes in the cost of labor, materials, and equipment. TVA maintains an ART to help fund the ultimate decommissioning of its non-nuclear power assets. See Note 15 . 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 $ 153 million from 2019 to 2023, which include future clean air controls, existing controls capital projects, and air operations and maintenance projects. TVA also estimates additional expenditures of $1.2 billion from 2019 to 2023 relating to TVA's CCR conversion program, not including costs related to any new requirements related to the Gallatin CCR facilities lawsuits, as well as expenditures of approximately $ 313 million from 2019 to 2025 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 March 31, 2019 , and September 30, 2018 , TVA's estimated liability for cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was approximately $16 million and $12 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. Potential Liability Associated with Workers’ Exposure to CCR Materials. In response to the 2008 ash spill at Kingston, TVA hired Jacobs Engineering Group, Inc. ("Jacobs") to oversee certain aspects of the cleanup. After the cleanup was completed, Jacobs was sued in the United States District Court for the Eastern District of Tennessee ("Eastern District") by employees of a contractor involved in the cleanup and family members of some of the employees. The plaintiffs alleged that Jacobs had failed to take or provide proper health precautions and misled workers about the health risks associated with exposure to coal fly ash, which is a CCR material. The plaintiffs alleged that exposure to the fly ash caused a variety of significant health issues and illnesses, including in some cases death. The case was split into two phases, with the first phase considering, among other issues, general causation and the second determining specific causation and damages. On November 7, 2018, a jury hearing the first phase returned a verdict in favor of the plaintiffs, including determinations that Jacobs failed to adhere to its contract with TVA or the Site Wide Safety and Health Plan in place; Jacobs failed to provide reasonable care to the plaintiffs; and Jacobs’s failures were capable of causing a list of medical conditions, ranging from hypertension to cancer. On January 11, 2019, the district court referred the parties to mediation. Depending on the outcome of mediation, the litigation will proceed to the second phase on the question of whether Jacobs’s failures did in fact cause the plaintiffs’ alleged injuries and damages. While TVA is not a party to this litigation, TVA could be contractually obligated to reimburse Jacobs for some amounts that Jacobs is required to pay as a result of this litigation. Further, TVA will continue monitoring this litigation to determine whether this or similar cases could have broader implications for the utility industry. 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 March 31, 2019 , TVA had accrued $ 14 million of probable losses with respect to Legal Proceedings. Of the accrued amount, $ 12 million is included in Other long-term liabilities and $ 2 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 (of which TVA had spent approximately $278 million as of March 31, 2019 ), (5) provide $ 60 million to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects, and (6) pay civil penalties of $ 10 million . In exchange for these commitments, most past claims against TVA based on alleged New Source Review and associated violations were waived and cannot be brought against TVA. Future claims, including those for sulfuric acid mist and GHG emissions, can still be brought against TVA, and claims for increases in particulates can also be pursued at many of TVA's coal-fired units. Additionally, the Environmental Agreements do not address compliance with new laws and regulations or the cost associated with such compliance. The liabilities related to the Environmental Agreements are included in Accounts payable and accrued liabilities and Other long-term liabilities on the March 31, 2019 , Consolidated Balance Sheet. In conjunction with the approval of the Environmental Agreements, the TVA Board determined that it was appropriate to record TVA's obligations under the Environmental Agreements as regulatory assets, and they are included as such on the March 31, 2019 , Consolidated Balance Sheet and will be recovered in rates in future periods. TVA has substantially completed the requirements in the Environmental Agreements related to retiring coal-fired units or installing controls on such units. 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 9 — Background — Lawsuit Brought by TDEC and — Lawsuit Brought by TSRA and TCWN . Consent Decree Involving Colbert Fossil Plant. In May 2013, the Alabama Department of Environmental Management ("ADEM") and TVA entered into a consent decree concerning alleged violations of the Alabama Water Pollution Control Act. The consent decree required, among other things, that TVA continue remediation efforts TVA had begun prior to the suit being filed and stop using an unlined landfill after a lined landfill is approved and constructed. TVA also paid $ 150,000 to Alabama under this 2013 consent decree. In August 2018, the parties agreed to amend the consent decree to deal with groundwater issues identified after TVA published groundwater monitoring reports in accordance with the EPA's CCR rule. The amended consent decree requires TVA to investigate the nature and extent of any groundwater contamination, develop and implement a remedy, provide semiannual status reports to ADEM, and remedy any seeps identified during inspections. TVA also paid $ 100,000 to Alabama under the amended consent decree. Case Involving Tennessee River Boat Accident . On July 23, 2015, plaintiffs filed suit in the United States District Court for the Northern District of Alabama, seeking recovery for personal injuries sustained when the plaintiffs’ boat struck a TVA transmission line which was being raised from the Tennessee River during a repair operation. The district court dismissed the case, finding that TVA’s exercise of its discretion as a governmental entity in deciding how to carry out the operation barred any liability for negligence. In August 2017, the United States Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) affirmed the decision. The plaintiffs petitioned the U.S. Supreme Court ("Supreme Court") for review of the decision, arguing that the provision of the TVA Act which allows suit to be brought against TVA does not allow TVA to claim immunity for discretionary actions. The Supreme Court granted the plaintiffs’ petition to review the case on September 27, 2018, and heard oral arguments on January 14, 2019. On April 29, 2019, the Supreme Court issued its opinion reversing the judgment of the Eleventh Circuit and remanding the case for further proceedings consistent with the opinion. Case Involving Bellefonte Nuclear Plant. On November 30, 2018, Nuclear Development, LLC filed suit against TVA in the United States District Court for the Northern District of Alabama. The plaintiff alleges that TVA breached its agreement to sell Bellefonte to the plaintiff. The plaintiff seeks, among other things, (1) an injunction requiring TVA to maintain Bellefonte and the associated NRC permits until the case is concluded, (2) an order compelling TVA to complete the sale of Bellefonte to the plaintiff, and (3) if the court does not order TVA to complete the sale, monetary damages in excess of $ 30 million . On December 26, 2018, Nuclear Development, LLC and TVA filed a joint stipulation with the court. Under the stipulation, Nuclear Development, LLC withdrew its request for an expedited hearing on its injunction in exchange for TVA’s agreement to continue to maintain Bellefonte in accordance with the NRC permits and to give Nuclear Development, LLC and the court five days prior notice of any filing by TVA to terminate the permits or sell the site. TVA filed a motion to dismiss the case on February 4, 2019. A hearing on TVA’s motion is scheduled for May 13, 2019. |
Gallatin Coal Combustion Residu
Gallatin Coal Combustion Residual Facilities (Notes) | 6 Months Ended |
Mar. 31, 2019 | |
Gallatin Coal Combustion Residuals Facilities [Abstract] | |
Gallatin coal combustion residual facilities [Text Block] | Gallatin Coal Combustion Residual Facilities Background 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, alleging that pollutants from Gallatin have been discharged 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, and civil penalties of up to $17,000 per day for each day TVA is found to have violated the statutes. The Tennessee Scenic Rivers Association ("TSRA") and Tennessee Clean Water Network ("TCWN") are also plaintiffs. Trial in this action is scheduled to begin in October 2019. Lawsuit Brought by TSRA and TCWN . In April 2015, TSRA and TCWN filed a lawsuit against TVA in the U.S. 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 sought 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. On August 4, 2017, the court issued a decision (the "August 2017 Order") that found 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 did not assess any monetary penalties against TVA for the CWA violations, citing the fact that its order to relocate the CCR materials would cause TVA to incur significant costs. On October 2, 2017, TVA appealed the court's decision to the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit"). On September 24, 2018, a panel of the Sixth Circuit reversed the district court decision and held that the district court erred by imposing CWA liability against TVA and that, therefore, the imposition of injunctive relief was an abuse of discretion. On October 22, 2018, the plaintiffs filed a petition requesting that the full Sixth Circuit rehear the case. On January 17, 2019, the Sixth Circuit denied the petition. On February 1, 2019, the Sixth Circuit issued its mandate, which made its September 24, 2018, decision final. On April 15, 2019, the plaintiffs requested review by the United States Supreme Court. 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), that began on October 1, 2018, as project costs are incurred. 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 permitting activities for the new facility, design and construction of the new facility onsite at Gallatin, 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 over the 24 year expected 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 plans on completing a capital project related to construction of a permanent bottom ash dewatering facility. This capital project, which is not included in the estimate for cleanup costs above, is estimated to cost approximately $71 million and be completed by 2020. It is reasonably possible that TVA will be required to move the CCR materials offsite, which would materially increase both the cost and the time to complete the project. 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, plus an amount of additional costs reflecting the expected impacts of inflation given the extended duration of an offsite relocation project. It is estimated that the process of obtaining the necessary permits for offsite disposal, locating or constructing an offsite facility, and moving all of the CCR materials offsite would take approximately 40 years. 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. At March 31, 2019 , related liabilities of $864 million and $22 million were recorded in Other long-term liabilities and Accounts payable and accrued liabilities, respectively. |
Revenue (Notes)
Revenue (Notes) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue As described in Note 2 , TVA adopted Revenue from Contracts with Customers effective October 1, 2018, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. As a result of the adoption of this standard, no cumulative effect adjustment was recorded. Additionally, comparative disclosures for 2018 operating results with the previous revenue recognition rules are not applicable as TVA’s revenue recognition has not materially changed as a result of the new standard. Revenue from Sales of Electricity TVA’s revenue from contracts with customers is primarily derived from the generation and sale of electricity to its customers and is included in Revenue from sales of electricity on the Consolidated Statements of Operations. Electricity is sold primarily to LPCs for distribution to their end-use customers. In addition, TVA sells electricity to directly served industrial companies, federal agencies, and others. LPC sales Approximately 93 percent of TVA’s revenue from sales of electricity is to LPCs, which then distribute the power to their customers using their own distribution systems. Power is delivered to each LPC at delivery points within the LPC's service territory. TVA recognizes revenue when the customer takes possession of the power at the delivery point. For power sales, the performance obligation to deliver power is satisfied in a series over time because the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Credits are designed to achieve objectives of the TVA Act and include items such as hydro preference credits for residential customers of LPCs, economic development credits to promote growth in the Tennessee Valley, and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. Directly served customers Directly served customers, including industrial customers, federal agencies, and other customers, take power for their own consumption. Similar to LPCs, power is delivered to a delivery point, at which time the customer takes possession and TVA recognizes revenue. For all power sales, the performance obligation to deliver power is satisfied in a series over time since the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Examples of credits include items such as economic development credits to promote growth in the Tennessee Valley and interruptible credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. Other Revenue Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, and certain other ancillary goods or services. Disaggregated Revenue During the three and six months ended March 31, 2019 , revenues generated from TVA’s electricity sales were $2.7 billion and $5.4 billion , respectively, and accounted for virtually all of TVA’s revenues. TVA’s revenues by state for the three and six months ended March 31, 2019 and 2018 are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Alabama $ 387 $ 406 $ 779 $ 767 Georgia 70 73 137 136 Kentucky 173 174 341 333 Mississippi 249 252 501 489 North Carolina 21 20 41 36 Tennessee 1,799 1,822 3,568 3,482 Virginia 13 14 25 26 Subtotal 2,712 2,761 5,392 5,269 Off-system sales — 2 1 4 Revenue capitalized during pre-commercial plant operations (1) — (10 ) — (11 ) Revenue from sales of electricity 2,712 2,753 5,393 5,262 Other revenues 38 39 82 79 Total operating revenues $ 2,750 $ 2,792 $ 5,475 $ 5,341 Note (1) Represents revenue capitalized during pre-commercial operations of $10 million and $11 million for the three and six months ended March 31, 2018 , respectively. See Note 1 — Pre-Commercial Plant Operations . TVA’s revenues by customer type for the three and six months ended March 31, 2019 and 2018 are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Revenue from sales of electricity Local power companies $ 2,514 $ 2,564 $ 4,981 $ 4,880 Industries directly served 168 168 353 333 Federal agencies and other 30 31 59 60 Revenue capitalized during pre-commercial plant operations (1) — (10 ) — (11 ) Revenue from sales of electricity 2,712 2,753 5,393 5,262 Other revenues 38 39 82 79 Total operating revenues $ 2,750 $ 2,792 $ 5,475 $ 5,341 Note (1) Represents revenue capitalized during pre-commercial operations of $10 million and $11 million for the three and six months ended March 31, 2018 , respectively. See Note 1 — Pre-Commercial Plant Operations . The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements for the three and six months ended March 31, 2019 , and the percentage of TVA’s total operating revenues for the three and six months ended March 31, 2019 represented by these revenues are summarized in the tables below: TVA Local Power Company Contracts At March 31, 2019 Contract Arrangements (1) Number of LPCs Sales to LPCs Percentage of Total Operating Revenues in the Three Months Ended March 31, 2019 20-year termination notice 3 $ 34 1.2 % 15-year termination notice 11 127 4.6 % 12-year termination notice 1 6 0.2 % 10-year termination notice 52 862 31.3 % 6-year termination notice 1 13 0.5 % 5-year termination notice 86 1,472 53.5 % Total 154 $ 2,514 91.3 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. TVA Local Power Company Contracts At March 31, 2019 Contract Arrangements (1) Number of LPCs Sales to LPCs Percentage of Total Operating Revenues in the 20-year termination notice 3 $ 67 1.2 % 15-year termination notice 11 251 4.6 % 12-year termination notice 1 12 0.2 % 10-year termination notice 52 1,714 31.3 % 6-year termination notice 1 25 0.5 % 5-year termination notice 86 2,912 53.2 % Total 154 $ 4,981 91.0 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. TVA’s two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 10-year termination notice period, respectively. Sales to MLGW and NES both accounted for eight percent of TVA’s total operating revenues during the six months ending March 31, 2019. Contract Balances Contract assets represent an entity’s right to consideration in exchange for goods and services that the entity has transferred to customers. TVA does not have any material contract assets as of March 31, 2019 . Contract liabilities represent an entity’s obligations to transfer goods or services to customers for which the entity has received consideration (or an amount of consideration is due) from the customers. These contract liabilities are primarily related to upfront consideration received prior to the satisfaction of the performance obligation. Energy Prepayment Obligations. In 2004, TVA and its largest customer, Memphis Light, Gas and Water Division ("MLGW"), entered into an energy prepayment agreement under which MLGW prepaid TVA $1.5 billion for the future costs of electricity to be delivered by TVA to MLGW over a period of 15 years. TVA accounted for the prepayment as unearned revenue and reported the obligation to deliver power under this arrangement as Energy prepayment obligations and Current portion of energy prepayment obligations on the September 30, 2018 Consolidated Balance Sheet. TVA recognized approximately $100 million of noncash revenue in each year of the arrangement as electricity was delivered to MLGW based on the ratio of units of kilowatt hours delivered to total units of kilowatt hours under contract. At March 31, 2019 , $1.5 billion had been recognized as noncash revenue on a cumulative basis during the life of the agreement, $ 25 million of which was recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations during the three months ended March 31, 2018 . There was no recognized noncash revenue during the three months ended March 31, 2019. During the six months ended March 31, 2019 and 2018 , $ 10 million and $ 50 million , respectively, were recognized as noncash revenue and a corresponding reduction in the balance of Energy prepayment obligations. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $ 12 million for the three months ended March 31, 2018 . There were no discounts to account for the time value of money during the three months ended March 31, 2019. Discounts to account for the time value of money, which were recorded as a reduction to electricity sales, amounted to $ 4 million and $ 23 million for the six months ended March 31, 2019 and 2018 , respectively. Economic Development Incentives. Under certain economic development programs, TVA offers incentives to existing and potential power customers in certain business sectors that make multi-year commitments to invest in the Tennessee Valley. TVA records those incentives as reductions of revenue. Incentives recorded as a reduction to revenue were $ 89 million and $ 71 million during the three months ended March 31, 2019, and 2018, respectively. Incentives recorded as a reduction to revenue were $ 156 million and $ 136 million during the six months ended March 31, 2019, and 2018, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities in the Consolidated Balance Sheets. At March 31, 2019 and September 30, 2018 , the outstanding unpaid incentives were $ 154 million and $ 145 million , respectively. These incentives may be subject to clawback provisions if the customers fail to meet certain program requirements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
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 federal legislation in response to a proposal 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 nearly 10 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 (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. TVA fulfilled its obligation under the TVA Act to repay $1.0 billion of the Power Program Appropriation Investment with the 2014 payment, and therefore this item is no longer a component of rate setting. 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 ( 2019 , 2018 , etc.) refer to TVA's fiscal years unless they are preceded by "CY," in which case the references are to calendar years. |
Cost-Based Regulation | Cost-Based Regulation Since the TVA Board is authorized by the TVA Act to set rates for power sold to its customers, TVA is self-regulated. Additionally, TVA's regulated rates are designed to recover its costs. Based on current projections, TVA believes that rates, set at levels that will recover TVA's costs, can be charged and collected. As a result of these factors, TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. TVA assesses whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes, potential legislation, and changes in technology. Based on these assessments, TVA believes the existing regulatory assets are probable of recovery. This determination reflects the current regulatory and political environment and is subject to change in the future. If future recovery of regulatory assets ceases to be probable, or any of the other factors described above cease to be applicable, TVA would no longer be considered to be a regulated entity and would be required to write off these costs. All regulatory asset write-offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable. |
Basis of Presentation | Basis of Presentation 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, 2018 , and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2018 (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 8 . Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses reported during the reporting period. Each of these estimates varies in regard to the level of judgment involved and its potential impact on TVA's financial results. Estimates are 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 | Cash includes cash on hand, non-interest bearing cash, and deposit accounts. All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents that are restricted, as to withdrawal or use under the terms of certain contractual agreements, are recorded in Other long-term assets in the Consolidated Balance Sheets. Restricted cash and cash equivalents includes cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 19 — 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 March 31, 2019 , and September 30, 2018 , for accounts receivable. Additionally, loans receivable of $151 million and $ 138 million at March 31, 2019 , and September 30, 2018 , respectively, are included in Accounts receivable, net and Other long-term assets and are reported net of allowances for uncollectible accounts of less than $1 million at both March 31, 2019 , and September 30, 2018 . |
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. The Allen Combined Cycle Plant ("Allen CC") began pre-commercial operations in September 2017, and began commercial operations in April 2018. Cogeneration capability at Johnsonville Combustion Turbine Unit 20 commenced pre-commercial plant operations in September 2017, and was placed in service during December 2017. Estimated revenue of $10 million and $11 million related to these projects was capitalized to offset project costs for the three and six months ended March 31, 2018 , respectively. TVA also capitalized related fuel costs for these construction projects of approximately $11 million and $14 million during the three and six months ended March 31, 2018 |
Depreciation | Depreciation TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies. These studies are updated at least every five years. Depreciation expense was $424 million and $331 million for the three months ended March 31, 2019 and 2018 , respectively. Depreciation expense was $732 million and $649 million for the six months ended March 31, 2019 and 2018 , respectively. See Note 5 — Financial Impact for a discussion of the impact of plant closures. |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
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 Resi_2
Gallatin Coal Combustion Residual Facilities Regulatory Accounting Treatment (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
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), that began on October 1, 2018, as project costs are incurred. |
Impact of New Accounting Stan_2
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 2019 : 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 post-retirement 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 non-operating expenses. Additionally, the guidance stipulates that only the service cost component of net benefit cost is eligible for capitalization in assets. The guidance requires retrospective presentation of the service and non-service cost components in the Consolidated Statements of Operations. Effective Date for TVA October 1, 2018 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a retrospective basis for the prior period presented resulting in lower operating expenses and higher non-operating expenses in the Consolidated Statements of Operations of $129 million and $128 million for the six months ended March 31, 2019 and 2018, respectively. There was no impact on the Consolidated Balance Sheets because TVA has historically capitalized only 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 October 1, 2018 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, unless regulatory accounting is applied. 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 did not have a material impact on TVA's financial condition, results of operations, or cash flows because changes in fair value accounting are recognized through regulatory accounting. Revenue from Contracts with Customers Description This guidance, 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. Effective Date for TVA October 1, 2018 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard using the modified retrospective method with no material changes to the amount or timing of revenue recognition. In accordance with the modified retrospective method, TVA’s previously issued financial statements have not been restated to comply the new accounting standard. TVA recognizes revenue when it satisfies a performance obligation by transferring control to the customer. For the generation and transmission of electricity, this is generally at the time the power is delivered to a metered customer delivery point for a customer's consumption or distribution. As a result, revenues from power sales are recorded as electricity is delivered to customers. TVA utilized certain practical expedients including applying the guidance to open contracts at the date of adoption, applying the guidance to a portfolio of contracts with similar characteristics, and recognizing revenue in the amount for which it has the right to invoice. As a result of adoption of the standard, TVA did not have a cumulative-effect adjustment to proprietary capital. 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 October 1, 2018 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 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 October 1, 2018 Effect on the Financial Statements or Other Significant Matters Adoption of this standard resulted in a change to the beginning-of-period and end-of-period cash and cash equivalents and restricted cash amounts shown on the Consolidated Statements of Cash Flows. TVA applied this standard on a retrospective basis for the prior periods presented. The following accounting standards have been issued but as of March 31, 2019 , were not effective and had not been adopted by TVA: 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 financing 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 the fiscal year of adoption 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. The standard is expected to impact financial position as adoption will increase the amount of assets and liabilities recognized on TVA’s Consolidated Balance Sheets. The standard is not expected to have a material impact on results of operations or cash flows as expense recognition is intended to be substantially the same as the existing standard. TVA plans to elect certain of the practical expedients included in the new standard. TVA has selected a lease system solution and continues to evaluate the completeness of the lease population, the effectiveness of internal control related to leases, and appropriate financial statement disclosure. TVA is also continuing to monitor unresolved industry implementation issues and will analyze the related impacts to lease accounting. Defined Benefit Plans - Disclosure Requirements Description This guidance applies to all employers that sponsor defined benefit pension or other post-retirement plans and modifies or clarifies the disclosure requirements for those plans. The amendments in this update remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Entities are required to apply the amendments retrospectively. Effective Date for TVA The new standard is effective for TVA's annual reporting periods beginning October 1, 2021. 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. Customer's Accounting for Implementation Costs in a Cloud Arrangement That Is a Service Contract Description This guidance relates to the accounting for a customer’s implementation costs in a hosting arrangement that is a service contract. The amendments align the requirements for capitalizing those implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments also provide requirements for the classification of the capitalized costs and related expense and cash flows in the financial statements, the application of impairment guidance to the capitalized costs, and the application of abandonment guidance to the capitalized costs. Entities are required to apply the amendments either retrospectively or prospectively to all implementation costs incurred after the adoption date. Effective Date for TVA The new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2020. Early adoption is permitted, and TVA is currently evaluating its adoption options. 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. Financial Instruments - Credit Losses Description This guidance eliminates the probable initial recognition threshold in current GAAP and, instead, requires an allowance to be recorded for all expected credit losses for certain financial assets that are not measured at fair value. The allowance for credit losses is based on historical information, current conditions, and reasonable and supportable forecasts. The new standard also makes revisions to the other than temporary impairment model for available-for-sale debt securities. Disclosures of credit quality indicators in relation to the amortized cost of financing receivables are further disaggregated by year of origination. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2020. 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. Fair Value Measurement Disclosure Description The guidance changes certain disclosure requirements for fair value measurements. It removes certain disclosure requirements, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of the transfers between levels; and the valuation processes for Level 3 fair value measurements. Some disclosure requirements are added, such as the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Effective Date for TVA The new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2020. 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. TVA is currently evaluating the potential impact on related disclosures. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | The table below summarizes the types and amounts of TVA's accounts receivable: Accounts Receivable, Net At March 31, 2019 At September 30, 2018 Power receivables $ 1,322 $ 1,570 Other receivables 72 87 Accounts receivable, net $ 1,394 $ 1,657 Note Allowance for uncollectible accounts was less than $ 1 million at March 31, 2019 and September 30, 2018 , and therefore is not represented in the table above. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At March 31, 2019 At September 30, 2018 Materials and supplies inventory $ 734 $ 725 Fuel inventory 318 266 Renewable energy certificates/emission allowance inventory, net 16 14 Allowance for inventory obsolescence (52 ) (44 ) Inventories, net $ 1,016 $ 961 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 At September 30, 2018 Loans and other long-term receivables, net (1) $ 144 $ 125 EnergyRight ® receivables 86 90 Prepaid capacity payments 23 27 Restricted cash and cash equivalents (1) 23 23 Commodity contract derivative assets 10 31 Other 61 66 Other long-term assets $ 347 $ 362 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue from External Customer [Line Items] | |
Revenue from External Customers by Products and Services [Table Text Block] | TVA’s revenues by customer type for the three and six months ended March 31, 2019 and 2018 are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Revenue from sales of electricity Local power companies $ 2,514 $ 2,564 $ 4,981 $ 4,880 Industries directly served 168 168 353 333 Federal agencies and other 30 31 59 60 Revenue capitalized during pre-commercial plant operations (1) — (10 ) — (11 ) Revenue from sales of electricity 2,712 2,753 5,393 5,262 Other revenues 38 39 82 79 Total operating revenues $ 2,750 $ 2,792 $ 5,475 $ 5,341 Note (1) Represents revenue capitalized during pre-commercial operations of $10 million and $11 million for the three and six months ended March 31, 2018 , respectively. See Note 1 — Pre-Commercial Plant Operations . |
Regulatory Assets and Liabilities | Components of regulatory assets and regulatory liabilities are summarized in the table below: Regulatory Assets and Liabilities At March 31, 2019 At September 30, 2018 Current regulatory assets Gallatin coal combustion residual facilities $ 26 $ 38 Unrealized losses on interest rate derivatives 78 73 Environmental agreements — 3 Unrealized losses on commodity contracts 7 4 Environmental cleanup costs – Kingston ash spill 130 266 Fuel cost adjustment receivable — 30 Total current regulatory assets 241 414 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,000 3,119 Non-nuclear decommissioning costs 1,054 1,019 Nuclear decommissioning costs 856 784 Gallatin coal combustion residual facilities 864 861 Unrealized losses on interest rate derivatives 897 692 Environmental agreements 12 11 Unrealized losses on commodity contracts 7 8 Other non-current regulatory assets 132 118 Total non-current regulatory assets 6,822 6,612 Total regulatory assets $ 7,063 $ 7,026 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 144 $ 146 Fuel cost adjustment 19 — Unrealized gains on commodity derivatives 32 41 Total current regulatory liabilities 195 187 Non-current regulatory liabilities Deferred other post-retirement benefits cost 63 73 Unrealized gains on commodity derivatives 10 31 Total non-current regulatory liabilities 73 104 Total regulatory liabilities $ 268 $ 291 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , and September 30, 2018 , as reflected in the Consolidated Balance Sheets are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets At March 31, 2019 At September 30, 2018 Current liabilities Accrued interest $ 11 $ 11 Accounts payable and accrued liabilities 2 2 Current maturities of long-term debt of variable interest entities 38 38 Total current liabilities 51 51 Other liabilities Other long-term liabilities 27 28 Long-term debt, net Long-term debt of variable interest entities, net 1,108 1,127 Total liabilities $ 1,186 $ 1,206 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 At September 30, 2018 Interest rate swap liabilities $ 1,330 $ 1,122 Gallatin coal combustion residual facilities liability 864 862 Capital lease obligations 176 178 Currency swap liabilities 110 81 EnergyRight ® financing obligation 96 102 Paradise pipeline financing obligation (1) 80 80 Accrued long-term service agreement (1) 71 74 Other (1) 187 216 Total other long-term liabilities $ 2,914 $ 2,715 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity (1) Nuclear Non-Nuclear Total Balance at September 30, 2018 $ 2,989 $ 1,790 $ 4,779 Settlements — (42 ) (42 ) Revisions in estimate — 136 136 Additional Obligation 14 — 14 Accretion (recorded as regulatory asset) 67 23 90 Balance at March 31, 2019 $ 3,070 $ 1,907 $ 4,977 Note (1) The current portion of ARO in the amount of $ 102 million and $ 115 million is included in Accounts payable and accrued liabilities at March 31, 2019 , and September 30, 2018 , respectively. As a result of recent experience in completing settlements at certain facilities, the revisions in non-nuclear estimates increased $ 103 million primarily due to expected costs for asbestos abatement activities across TVA's fossil fleet. In addition, TVA approved a change in the preferred closure method for the Allen West Impoundment from closure in place to closure by removal, which resulted in a cost increase of $ 33 million . |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Total debt outstanding at March 31, 2019 , and September 30, 2018 , consisted of the following: Debt Outstanding At March 31, 2019 At September 30, 2018 Short-term debt Short-term debt, net $ 1,617 $ 1,216 Current maturities of power bonds 1,032 1,032 Current maturities of long-term debt of variable interest entities 38 38 Current maturities of notes payable 26 46 Total current debt outstanding, net 2,713 2,332 Long-term debt Long-term power bonds (1) 19,298 20,300 Long-term debt of variable interest entities, net 1,108 1,127 Long-term notes payable 22 23 Unamortized discounts, premiums, issue costs, and other (137 ) (143 ) Total long-term debt, net 20,291 21,307 Total outstanding debt $ 23,004 $ 23,639 Note (1) Includes net exchange gain from currency transactions of $146 million and $ 147 million at March 31, 2019 , and September 30, 2018 , respectively. |
Debt Securities Activity | The table below summarizes the long-term debt securities activity for the period from October 1, 2018, to March 31, 2019 : Debt Securities Activity Date Amount (1) Interest Rate Redemptions/Maturities electronotes ® First Quarter 2019 $ 1 2.65 % electronotes ® Second Quarter 2019 1 3.48 % 2013 Series A October 2018 1,000 1.75 % 2009 Series B December 2018 1 3.77 % Total redemptions/maturities of power bonds 1,003 Notes payable 21 0.84 % Debt of variable interest entities 19 4.31 % Total redemptions/maturities of debt $ 1,043 Note (1) All redemptions were at 100 percent of par. |
Risk Management Activities an_2
Risk Management Activities and Derivative Transactions (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2019 2018 2019 2018 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 $ 23 $ 44 $ (29 ) $ 83 Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Three Months Ended Six Months Ended Derivatives in Cash Flow Hedging Relationship 2019 2018 2019 2018 Currency swaps $ 14 $ 28 $ (4 ) $ 31 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 $ 40 million of gains from AOCI to interest expense within the next 12 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 Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended Six Months Ended Derivative Type Objective of Derivative Accounting for Derivative Instrument 2019 2018 2019 2018 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 $ (19 ) $ (23 ) $ (39 ) $ (47 ) 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 — — 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 ) 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 and six months ended March 31, 2019 and 2018 . |
Fair Value of TVA Derivatives | Fair Values of TVA Derivatives At March 31, 2019 At September 30, 2018 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (72 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(67) $ (67 ) Accounts payable and £250 million Sterling (25 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(20) (12 ) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(7) £150 million Sterling (26 ) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(23) (15 ) Accounts payable and Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (1,020 ) Accounts payable and $ (878 ) Accounts payable and $476 million notional (383 ) Accounts payable and (317 ) Accounts payable and $42 million notional (5 ) Accounts payable and (4 ) Accounts payable and Commodity contract derivatives 28 Other current assets $32; Other long-term assets $10; Other long-term liabilities $(7); Accounts payable and accrued liabilities $(7) 60 Other current assets $41; Other long-term assets $31; Other long-term liabilities $(8); Accounts payable and accrued liabilities $(4) |
Commodity Contract Derivatives | Commodity Contract Derivatives At March 31, 2019 At September 30, 2018 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 16 15 million tons $ 38 13 20 million tons $ 58 Natural gas contract derivatives 42 360 million mmBtu $ (10 ) 61 359 million mmBtu $ 2 |
Financial Trading Program Realized Gains (Losses) | TVA experienced the following realized losses related to the FTP during the periods set forth in the table below: Financial Trading Program Realized Gains (Losses) Three Months Ended Six Months Ended 2019 2018 2019 2018 Decrease (increase) in fuel expense Natural gas $ — $ — $ — $ (6 ) Decrease (increase) in purchased power expense Natural gas — — — (2 ) |
Offsetting Assets and Liabilities | The amounts of TVA's derivative instruments as reported in the Consolidated Balance Sheets at March 31, 2019 , and September 30, 2018 , are shown in the table below: Derivative Assets and Liabilities At March 31, 2019 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 $ 42 $ — $ 42 Liabilities Currency swaps (3) $ 123 $ — $ 123 Interest rate swaps (3) 1,408 — 1,408 Total derivatives subject to master netting or similar arrangement 1,531 — 1,531 Commodity derivatives not subject to master netting or similar arrangement 14 — 14 Total liabilities $ 1,545 $ — $ 1,545 At September 30, 2018 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 $ 72 $ — $ 72 Liabilities Currency swaps (3) $ 94 $ — $ 94 Interest rate swaps (3) 1,199 — 1,199 Total derivatives subject to master netting or similar arrangement 1,293 — 1,293 Commodity derivatives not subject to master netting or similar arrangement 12 — 12 Total liabilities $ 1,305 $ — $ 1,305 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 $ 932 million and $ 921 million were posted as collateral at March 31, 2019 , and September 30, 2018 , 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) | 6 Months Ended |
Mar. 31, 2019 | |
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 equity and trading debt securities held during each period as follows: Unrealized Investment Gains (Losses) Three Months Ended Six Months Ended Fund Financial Statement Presentation 2019 2018 2019 2018 SERP Other income (expense) $ 5 $ (2 ) $ (1 ) $ — DCP Other income (expense) 1 (1 ) (2 ) — NDT Regulatory asset 154 (75 ) (47 ) (29 ) ART Regulatory asset 52 (14 ) (52 ) 6 |
Fair Value Measurements | Fair Value Measurements Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 258 $ — $ — $ 258 Government debt securities 219 50 — 269 Corporate debt securities — 504 — 504 Mortgage and asset-backed securities — 34 — 34 Institutional mutual funds 224 — — 224 Forward debt securities contracts — 59 — 59 Private credit measured at net asset value (1) — — — 19 Private equity funds measured at net asset value (1) — — — 140 Private real estate funds measured at net asset value (1) — — — 128 Commingled funds measured at net asset value (1) — — — 1,200 Total investments 701 647 — 2,835 Commodity contract derivatives — 2 40 42 Total $ 701 $ 649 $ 40 $ 2,877 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 123 $ — $ 123 Interest rate swaps — 1,408 — 1,408 Commodity contract derivatives — 12 2 14 Total $ — $ 1,543 $ 2 $ 1,545 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 14 — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 220 $ — $ — $ 220 Government debt securities 199 37 — 236 Corporate debt securities — 499 — 499 Mortgage and asset-backed securities — 50 — 50 Institutional mutual funds 126 — — 126 Forward debt securities contracts — 45 — 45 Private equity funds measured at net asset value (1) — — — 132 Private real estate funds measured at net asset value (1) — — — 124 Commingled funds measured at net asset value (1) — — — 1,430 Total investments 545 631 — 2,862 Commodity contract derivatives — 13 59 72 Total $ 545 $ 644 $ 59 $ 2,934 Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 94 $ — $ 94 Interest rate swaps — 1,199 — 1,199 Commodity contract derivatives — 11 1 12 Total $ — $ 1,304 $ 1 $ 1,305 Notes (1) |
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 Three Months Ended Six Months Ended Balance at beginning of period $ (73 ) $ (67 ) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 21 15 Balance at March 31, 2018 $ (52 ) $ (52 ) Balance at beginning of period $ 63 $ 58 Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (25 ) (20 ) Balance at March 31, 2019 $ 38 $ 38 |
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 March 31, Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 40 Pricing model Coal supply and demand 0.6 - 0.8 billion tons/year Long-term market prices $12.30 - $106.21/ton Liabilities Commodity contract derivatives $ (2 ) Pricing model Coal supply and demand 0.6 - 0.8 billion tons/year Long-term market prices $12.30 - $106.21/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2018 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 59 Pricing model Coal supply and demand 0.7 - 0.8 billion tons/year Long-term market prices $12.25 - $112.24/ton Liabilities Commodity contract derivatives $ 1 Pricing model Coal supply and demand 0.7 - 0.8 billion tons/year Long-term market prices $12.25 - $112.24/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 March 31, 2019 , and September 30, 2018 , were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value At March 31, 2019 At September 30, 2018 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables (including current portion) Level 2 $ 107 $ 106 $ 112 $ 112 Loans and other long-term receivables, net (including current portion) Level 2 $ 151 $ 136 $ 138 $ 123 EnergyRight ® financing obligation (including current portion) Level 2 $ 120 $ 135 $ 127 $ 143 Unfunded loan commitments Level 2 $ — $ 5 $ — $ 3 Membership interest of variable interest entities subject to mandatory redemption (including current portion) Level 2 $ 29 $ 36 $ 30 $ 37 Long-term outstanding power bonds (including current maturities), net Level 2 $ 20,193 $ 24,180 $ 21,189 $ 23,896 Long-term debt of variable interest entities (including current maturities), net Level 2 $ 1,146 $ 1,299 $ 1,165 $ 1,256 Long-term notes payable (including current maturities) Level 2 $ 48 $ 47 $ 69 $ 68 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 Six Months Ended 2019 2018 2019 2018 Bellefonte deposit $ — $ — $ 21 $ — Interest income 6 6 12 11 External services 2 4 6 8 Miscellaneous — 1 — 1 Gains (losses) on investments 6 — (1 ) 3 Total other income (expense), net $ 14 $ 11 $ 38 $ 23 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
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 and six months ended March 31, 2019 and 2018 , were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended For the Six Months Ended Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2019 2018 2019 2018 2019 2018 2019 2018 Service cost $ 10 $ 13 $ 3 $ 3 $ 22 $ 27 $ 6 $ 7 Interest cost 126 119 5 4 249 237 9 9 Expected return on plan assets (120 ) (119 ) — — (239 ) (239 ) — — Amortization of prior service credit (24 ) (24 ) (6 ) (5 ) (49 ) (49 ) (12 ) (11 ) Recognized net actuarial loss 86 101 1 2 168 204 2 4 Total net periodic benefit cost as actuarially determined 78 90 3 4 151 180 5 9 Amount expensed (capitalized) due to actions of regulator (2 ) (13 ) — — 1 (27 ) — — Total net periodic benefit cost $ 76 $ 77 $ 3 $ 4 $ 152 $ 153 $ 5 $ 9 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
State [Table Text Block] | TVA’s revenues by state for the three and six months ended March 31, 2019 and 2018 are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended Six Months Ended 2019 2018 2019 2018 Alabama $ 387 $ 406 $ 779 $ 767 Georgia 70 73 137 136 Kentucky 173 174 341 333 Mississippi 249 252 501 489 North Carolina 21 20 41 36 Tennessee 1,799 1,822 3,568 3,482 Virginia 13 14 25 26 Subtotal 2,712 2,761 5,392 5,269 Off-system sales — 2 1 4 Revenue capitalized during pre-commercial plant operations (1) — (10 ) — (11 ) Revenue from sales of electricity 2,712 2,753 5,393 5,262 Other revenues 38 39 82 79 Total operating revenues $ 2,750 $ 2,792 $ 5,475 $ 5,341 Note (1) Represents revenue capitalized during pre-commercial operations of $10 million and $11 million for the three and six months ended March 31, 2018 , respectively. See Note 1 — Pre-Commercial Plant Operations . |
Revenue Local Power Company Con
Revenue Local Power Company Contracts (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Long-term Contract for Purchase of Electric Power [Line Items] | |
Long-term Contracts or Programs Disclosure [Text Block] | The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements for the three and six months ended March 31, 2019 , and the percentage of TVA’s total operating revenues for the three and six months ended March 31, 2019 represented by these revenues are summarized in the tables below: TVA Local Power Company Contracts At March 31, 2019 Contract Arrangements (1) Number of LPCs Sales to LPCs Percentage of Total Operating Revenues in the Three Months Ended March 31, 2019 20-year termination notice 3 $ 34 1.2 % 15-year termination notice 11 127 4.6 % 12-year termination notice 1 6 0.2 % 10-year termination notice 52 862 31.3 % 6-year termination notice 1 13 0.5 % 5-year termination notice 86 1,472 53.5 % Total 154 $ 2,514 91.3 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. TVA Local Power Company Contracts At March 31, 2019 Contract Arrangements (1) Number of LPCs Sales to LPCs Percentage of Total Operating Revenues in the 20-year termination notice 3 $ 67 1.2 % 15-year termination notice 11 251 4.6 % 12-year termination notice 1 12 0.2 % 10-year termination notice 52 1,714 31.3 % 6-year termination notice 1 25 0.5 % 5-year termination notice 86 2,912 53.2 % Total 154 $ 4,981 91.0 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with five of the LPCs with five-year termination notices, TVA has a 10-year termination notice (which becomes a five-year termination notice if TVA loses its discretionary wholesale rate-setting authority). Two of the LPCs have five-year termination notices or a shorter period if any act of Congress, court decision, or regulatory change requires or permits that election. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies General and Basis of Presentation (Details) People in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Mar. 31, 2019USD ($)People | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)People | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | |
Accounting Policies [Abstract] | ||||||
Prior Period Reclassification Adjustment | $ 65 | $ 13 | $ 128 | |||
Deferred Costs | (39) | (39) | ||||
Regulatory Assets | 7,063 | $ 7,026 | 7,063 | |||
Fuel cost tax equivalents | (6) | |||||
Other Deferred Costs, Net | 19 | 19 | ||||
Other Depreciation and Amortization | (26) | |||||
Other Operating Activities, Cash Flow Statement | (17) | |||||
Accounts Payable and Accrued Liabilities, Current | (12) | (12) | ||||
Regulatory assets costs | (5) | |||||
Appropriation-investment power program | 1,000 | |||||
Financing Receivable, Net | $ 136 | 123 | $ 136 | |||
Population of TVA's service area | People | 10 | 10 | ||||
Allowance for uncollectible accounts | $ 1 | 1 | $ 1 | |||
Revenue capitalized during pre-commercial operations | 0 | $ 10 | 0 | 11 | ||
Fuel cost capitalized during pre-commercial operations | $ 14 | $ 11 | ||||
Depreciation expense | $ 424 | $ 732 | $ 649 | $ 331 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Prior Period Reclassification Adjustment | $ 65 | $ 13 | $ 128 | |
Accounts Payable and Other Accrued Liabilities | 12 | 12 | ||
Other Operating Income (Expense), Net | (5) | |||
Deferred Costs | 39 | 39 | ||
Fuel cost tax equivalents | (6) | |||
Financing Receivable, Net | 136 | 136 | $ 123 | |
Allowance for Notes, Loans and Financing Receivable, Noncurrent | 1 | 1 | ||
Other Deferred Costs, Net | 19 | 19 | ||
Other Depreciation and Amortization | 26 | |||
Other Operating Activities, Cash Flow Statement | (17) | |||
Carrying Value | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Net | $ 151 | $ 151 | $ 138 |
Impact of New Accounting Stan_3
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | ||
Restricted cash | $ 13 | |
Reclassification from Operating and maintenance expense to Other income | $ 193 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Accounts Receivable, Net | ||
Power receivables | $ 1,322 | $ 1,570 |
Other receivables | 72 | 87 |
Allowance for uncollectible accounts | 1 | 1 |
Accounts receivable, net | $ 1,394 | $ 1,657 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Inventories, Net | ||
Materials and supplies inventory | $ 734 | $ 725 |
Fuel inventory | 318 | 266 |
Renewable energy certificates/emission allowance inventory, net | 16 | 14 |
Allowance for inventory obsolescence | (52) | (44) |
Inventories, net | $ 1,016 | $ 961 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Other Long-Term Assets | ||
EnergyRight® receivables | $ 106 | $ 112 |
Other long-term assets | 347 | 362 |
Other long-term assets | ||
Other Long-Term Assets | ||
Loans and other long-term receivables, net(1) | 144 | 125 |
EnergyRight® receivables | 86 | 90 |
Prepaid capacity payments | 23 | 27 |
Commodity contract derivative assets | 10 | 31 |
Other | 61 | 66 |
Restricted Cash and Cash Equivalents, Noncurrent | 23 | 23 |
Accounts Receivable | ||
Other Long-Term Assets | ||
EnergyRight® receivables | $ 21 | $ 22 |
Energy Right | ||
Other Long-Term Assets | ||
Number of days in default | 180 days | |
Energy Right | Minimum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 5 years | |
Energy Right | Maximum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 10 years |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 241 | $ 414 |
Non-current regulatory assets | 6,822 | 6,612 |
Regulatory assets | 7,063 | 7,026 |
Current regulatory liabilities | 195 | 187 |
Non-current regulatory liabilities | 73 | 104 |
Regulatory liabilities | 268 | 291 |
Deferred other post-retirement benefits cost | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory liabilities | 63 | 73 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 144 | 146 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 19 | 0 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 32 | 41 |
Non-current regulatory liabilities | 10 | 31 |
Gallatin coal combustion residual facilities | ||
Regulatory Assets and Liabilities | ||
Gallatin coal combustion residual facilities estimated cost to cap and close | 26 | 38 |
Non-nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 78 | 73 |
Non-current regulatory assets | 897 | 692 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 7 | 4 |
Non-current regulatory assets | 7 | 8 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 0 | 30 |
Deferred nuclear generating units | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 0 | 3 |
Non-current regulatory assets | 12 | 11 |
Environmental cleanup costs – Kingston ash spill | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 130 | 266 |
Nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 864 | 861 |
Deferred pension costs and other post-retirement benefits costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 3,000 | 3,119 |
Gallatin coal combustion residual facilities | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 856 | 784 |
Environmental agreements | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 1,054 | 1,019 |
Other non-current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 132 | $ 118 |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 6 Months Ended | ||||
Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2013 | Sep. 30, 2012 | |
Variable Interest Entities | |||||
Accrued interest | $ 11 | $ 11 | |||
VIE Financing | |||||
Construction management agreement and lease | 1,206 | $ 1,186 | $ 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 | $ 38 | 38 | |||
Long-term debt of variable interest entities, net | 1,108 | 1,127 | |||
Interest Expense | 14 | ||||
SCCG | |||||
VIE Financing | |||||
Face amount | $ 360 | ||||
Debt and Capital Lease Obligations | $ 400 | ||||
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 | 51 | $ 51 | |||
Other long-term liabilities | |||||
VIE Financing | |||||
Construction management agreement and lease | $ 27 | $ 28 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2019 | Sep. 30, 2018 | ||
Other Long-Term Liabilities | |||
Asset Retirement Obligation, Liabilities Incurred | $ 14 | ||
Finance Lease, Liability | 80 | $ 80 | |
Gallatin coal combustion residual facilities estimated cost relocate onsite | 900 | ||
Interest rate swap liabilities | 1,408 | 1,199 | |
Capital lease obligations | 223 | 263 | |
Currency swap liabilities | [1] | 123 | 94 |
EnergyRight® financing obligation | 135 | 143 | |
Total other long-term liabilities | 2,914 | 2,715 | |
Accounts Payable and Accrued Liabilities | |||
Other Long-Term Liabilities | |||
Finance Lease, Liability | 1 | ||
Obligations under long-term service agreements | 15 | 30 | |
Accrued Environmental Loss Contingencies, Current | 22 | 30 | |
Interest rate swap liabilities | 78 | 77 | |
Increase in Interest rate Derivative Liabilities, at Fair Value | 208 | ||
Gallatin coal combustion residual facilities | 22 | ||
EnergyRight® financing obligation | 24 | 25 | |
Other long-term liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | 71 | 74 | |
Accrued Environmental Loss Contingencies, Current | 96 | ||
Interest rate swap liabilities | 1,330 | 1,122 | |
Gallatin coal combustion residual facilities | 864 | 862 | |
Capital lease obligations | 176 | 178 | |
Currency swap liabilities | 110 | 81 | |
EnergyRight® financing obligation | 102 | ||
Other(1) | $ 187 | $ 216 | |
[1] | 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 14 — Offsetting of Derivative Assets and Liabilities. |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Asset Retirement Obligations | ||
Asset Retirement Obligation, Period Increase (Decrease) | $ 198 | |
Amortization and Depreciation of Decontaminating and Decommissioning Assets | 72 | |
Balance at September 30, 2018 | 4,779 | |
Settlements | (42) | |
Asset Retirement Obligation, Revision of Estimate | 136 | |
Accretion (recorded as regulatory asset) | 90 | |
Balance at March 31, 2019 | 4,977 | |
Asset Retirement Obligation, Liabilities Incurred | 14 | |
Nuclear | ||
Asset Retirement Obligations | ||
Balance at September 30, 2018 | 2,989 | |
Settlements | 0 | |
Asset Retirement Obligation, Revision of Estimate | 0 | |
Accretion (recorded as regulatory asset) | 67 | |
Balance at March 31, 2019 | 3,070 | |
Asset Retirement Obligation, Liabilities Incurred | 14 | |
Non-nuclear | ||
Asset Retirement Obligations | ||
Balance at September 30, 2018 | 1,790 | |
Settlements | (42) | |
Asset Retirement Obligation, Revision of Estimate | 136 | |
Accretion (recorded as regulatory asset) | 23 | |
Balance at March 31, 2019 | 1,907 | |
Asset Retirement Obligation, Revision of Estimate | 103 | |
Asset Retirement Obligation, Liabilities Incurred | 0 | |
Non-nuclear | ||
Asset Retirement Obligations | ||
Asset Retirement Obligation, Revision of Estimate | 33 | |
Accounts payable and accrued liabilities | ||
Asset Retirement Obligations | ||
Current portion of ARO | $ 102 | $ 115 |
Debt and Other Obligations Debt
Debt and Other Obligations Debt Outstanding (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2019 | ||
Debt Instrument | |||
Foreign Currency Transactions, Description | 146 | ||
Short-term debt | |||
Short-term debt, net | $ 1,216 | $ 1,617 | |
Current maturities of power bonds | 1,032 | 1,032 | |
Current maturities of long-term debt of variable interest entities | 38 | 38 | |
Current maturities of notes payable | 46 | 26 | |
Total current debt outstanding, net | 2,332 | 2,713 | |
Long-term debt | |||
Long-term power bonds | [1] | 20,300 | 19,298 |
Long-term debt of variable interest entities | 1,127 | 1,108 | |
Long-term notes payable | 23 | 22 | |
Unamortized discounts, premiums, issues costs, and other | (143) | (137) | |
Total long-term debt, net | 21,307 | 20,291 | |
Total outstanding debt | 23,639 | $ 23,004 | |
Net exchange gain from currency transactions | $ 147 | ||
[1] | Includes net exchange gain from currency transactions of $146 million and $147 million at March 31, 2019, and September 30, 2018, respectively. |
Debt and Other Obligations De_2
Debt and Other Obligations Debt Securities Activity (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | |||
Debt Instrument | ||||
Redemptions/maturities of power bonds | $ 1,003 | [1] | $ 700 | |
Total redemptions/maturities of debt | [1] | (1,043) | ||
Notes Issued | [1] | $ 21 | ||
Total | ||||
Debt Instrument | ||||
Percent of par value | 100.00% | |||
[1] | (1) All redemptions were at 100 percent of par. |
Debt and Other Obligations Cred
Debt and Other Obligations Credit Facility Agreements (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2019USD ($)Credit_facilities | Sep. 30, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||
Summary of Long-Term Credit Facilities | The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities: Summary of Long-Term Credit Facilities At March 31, 2019 Facility Limit Letters of Credit Outstanding Cash Borrowings Availability Maturity Date December 2021 $ 150 $ 38 $ — $ 112 February 2022 500 500 — — June 2023 1,000 213 — 787 September 2023 1,000 181 — 819 Total $ 2,650 $ 932 $ — $ 1,718 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | $ 150 | |
Total Cash Borrowings for Credit Facilities | 0 | |
Revolving Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | $ 2,700 | |
Number of revolving credit facilities | Credit_facilities | 4 | |
December 2019 Credit Facility | $ 150 | |
February 2022 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 2022 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 | 112 | |
Remaining Availability, February 2022 Credit Facility | 0 | |
Remaining Availability, June 2020 Credit Facility | 787 | |
Remaining Availability, September 2020 Credit Facility | 819 | |
Total Remaining Availability for Credit Facilities | 1,718 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letter of Credit Outstanding, December 2019 Credit Facility | 38 | |
Letter of Credit Outstanding, February 2022 Credit Facility | 500 | |
Letter of Credit Outstanding, June 2020 Credit Facility | 213 | |
Letter of Credit Outstanding, September 2020 Credit Facility | 181 | |
Amount of letters of credit outstanding for credit facilities | $ 932 | $ 900 |
Debt and Other Obligations Leas
Debt and Other Obligations Lease/Leaseback Obligations (Details) $ in Millions | Mar. 31, 2019USD ($) | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
Leasing transaction, number of units | 24 | |
CT and QTE outstanding leaseback obligation | $ 263 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Equity [Abstract] | |||||
Reclassification to earnings from cash flow hedges | [1] | $ (14) | $ (28) | $ 4 | $ (31) |
[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 $40 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
Risk Management Activities an_3
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | |||||
Net unrealized gain (loss) on cash flow hedges | $ 23,000,000 | $ 44,000,000 | $ (29,000,000) | $ 83,000,000 | |
Reclassification to earnings from cash flow hedges | [1] | $ (14,000,000) | $ (28,000,000) | 4,000,000 | $ (31,000,000) |
Ineffective portion excluded from testing | 0 | ||||
Reclassification to earnings from cash flow hedges in the next 12 months | $ (40,000,000) | ||||
[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 $40 million of gains from AOCI to interest expense within the next 12 months to offset amounts anticipated to be recorded in interest expense related to net exchange gain on the debt. |
Risk Management Activities an_4
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) | 3 Months Ended | 6 Months Ended | |||||||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | |||||
Derivative | |||||||||
Amount recognized for unrealized gains (losses) | $ 0 | ||||||||
Change in Unrealized gains (losses) on Interest Rate Derivatives | $ (99,000,000) | $ 143,000,000 | (209,000,000) | $ 171,000,000 | |||||
Interest Rate Swap | |||||||||
Derivative | |||||||||
Gain (loss) recognized in income on derivatives | (19,000,000) | (23,000,000) | [1] | (39,000,000) | [1] | (47,000,000) | [1] | ||
Fair value | (383,000,000) | (383,000,000) | $ (317,000,000) | ||||||
Commodity Contract Derivatives | |||||||||
Derivative | |||||||||
Gain (loss) recognized in income on derivatives | 0 | 3,000,000 | 0 | [1] | 0 | [1] | |||
Fair value | 28,000,000 | 28,000,000 | $ 60,000,000 | ||||||
Commodity derivatives under the financial trading program | |||||||||
Derivative | |||||||||
Gain (loss) recognized in income on derivatives | $ 0 | [1] | $ 0 | [1] | $ 0 | $ (8,000,000) | [1] | ||
Coal Contract Derivatives | |||||||||
Derivative | |||||||||
Number of contracts | 16 | 16 | 13 | ||||||
Notional amount | 15,000,000 | 15,000,000 | 20,000,000 | ||||||
Fair value | $ 38,000,000 | $ 38,000,000 | $ 58,000,000 | ||||||
Natural gas contract derivatives | |||||||||
Derivative | |||||||||
Number of contracts | 42 | 42 | 61 | ||||||
Notional amount | 360,000,000 | 360,000,000 | 359,000,000 | ||||||
Fair value | $ (10,000,000) | $ (10,000,000) | $ 2,000,000 | ||||||
[1] | All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in 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 and six months ended March 31, 2019 and 2018. |
Risk Management Activities an_5
Risk Management Activities and Derivative Transactions Fair Values of TVA Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 | |
Derivatives, Fair Value | |||
Gross amounts of recognized liabilities | $ 1,531 | $ 1,293 | |
200 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | (72) | (67) | |
Gross amounts of recognized liabilities | 123 | 94 | [1] |
200 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (67) | (62) | |
200 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (5) | (5) | |
250 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | (25) | (12) | |
250 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (20) | (7) | |
250 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (5) | (5) | |
150 million Sterling currency swap | |||
Derivatives, Fair Value | |||
Fair value | (26) | (15) | |
150 million Sterling currency swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (23) | (12) | |
150 million Sterling currency swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (3) | (3) | |
$1.0 billion notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (1,020) | (878) | |
$1.0 billion notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (964) | (822) | |
$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (56) | (56) | |
$476 million notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (383) | (317) | |
$476 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (363) | (297) | |
$476 million notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (20) | (20) | |
$42 million notional interest rate swap | |||
Derivatives, Fair Value | |||
Fair value | (5) | (4) | |
$42 million notional interest rate swap | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (3) | (3) | |
$42 million notional interest rate swap | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | (2) | (1) | |
Commodity contract derivatives | |||
Derivatives, Fair Value | |||
Fair value | 28 | 60 | |
Commodity contract derivatives | Other long-term assets | |||
Derivatives, Fair Value | |||
Fair value | 10 | 31 | |
Commodity contract derivatives | Other current assets | |||
Derivatives, Fair Value | |||
Fair value | 32 | 41 | |
Commodity contract derivatives | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Fair value | (7) | (8) | |
Commodity contract derivatives | Accounts payable and accrued liabilities | |||
Derivatives, Fair Value | |||
Fair value | $ (7) | $ (4) | |
[1] | Letters of credit of approximately $932 million and $921 million were posted as collateral at March 31, 2019, and September 30, 2018, 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 an_6
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2019USD ($)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 | 2021 |
Maximum | |
Derivative | |
Expiration date range of swaps | 2043 |
Risk Management Activities an_7
Risk Management Activities and Derivative Transactions Derivatives Under FTP (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | |
Derivative | |||||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 59 | $ 45 | ||
Coal Contract | |||||
Derivative | |||||
Notional amount | 15,000,000 | 15,000,000 | 20,000,000 | ||
Fair value | $ 38 | $ 38 | $ 58 | ||
Natural Gas Contract Derivatives | |||||
Derivative | |||||
Notional amount | 360,000,000 | 360,000,000 | 359,000,000 | ||
Fair value | $ (10) | $ (10) | $ 2 | ||
Natural Gas Contract Derivatives | |||||
Derivative | |||||
Decrease (increase) in fuel expense | 0 | $ 0 | 0 | $ (6) | |
Decrease (increase) in purchased power expense | 0 | $ 0 | 0 | $ (2) | |
Fair Value, Inputs, Level 2 | |||||
Derivative | |||||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 59 | $ 45 |
Risk Management Activities an_8
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 | |
Offsetting Assets [Line Items] | |||
Total derivatives not subject to master netting or similar arrangement | [1] | $ 42 | |
Forward Contract Derivative Asset, at Fair Value | 59 | $ 45 | |
Letter of Credit | |||
Offsetting Assets [Line Items] | |||
Amount of letters of credit outstanding for credit facilities | 932 | 900 | |
Commodity derivatives under FTP | |||
Offsetting Assets [Line Items] | |||
Gross Amounts of Recognized Assets | 72 | ||
Gross Amounts Offset in the Balance Sheet | [2] | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet | [1] | 72 | |
Fair Value, Inputs, Level 2 | |||
Offsetting Assets [Line Items] | |||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 45 | |
[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. |
Risk Management Activities an_9
Risk Management Activities and Derivative Transactions Offsetting for Derivative Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 | ||
Offsetting Liabilities [Line Items] | ||||
Total derivatives not subject to master netting or similar arrangement | [1] | $ 42 | ||
Gross amounts of recognized liabilities | 1,531 | $ 1,293 | ||
Gross Amounts Offset in the Balance Sheet | [2] | 0 | 0 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [1] | 1,545 | 1,305 | |
Commodity derivatives not subject to master netting or similar arrangement | [1] | 14 | 12 | |
Total | 1,545 | 1,305 | ||
Forward Contract Derivative Asset, at Fair Value | 59 | 45 | ||
Currency Swap | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 123 | 94 | [3] | |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | [2],[3] | |
Net Amounts of Liabilities Presented in the Balance Sheet | [1],[3] | 123 | 94 | |
Interest Rate Contract | ||||
Offsetting Liabilities [Line Items] | ||||
Gross amounts of recognized liabilities | 1,408 | 1,199 | [3] | |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | [2],[3] | |
Net Amounts of Liabilities Presented in the Balance Sheet | [1],[3] | 1,408 | 1,199 | |
Total derivatives subject to master netting or similar arrangement | ||||
Offsetting Liabilities [Line Items] | ||||
Net Amounts of Liabilities Presented in the Balance Sheet | [1] | 1,531 | 1,293 | |
Letter of Credit | ||||
Offsetting Liabilities [Line Items] | ||||
Amount of letters of credit outstanding | 932 | 900 | ||
Fair Value, Inputs, Level 2 | ||||
Offsetting Liabilities [Line Items] | ||||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 45 | ||
[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 $932 million and $921 million were posted as collateral at March 31, 2019, and September 30, 2018, respectively, to partially secure the liability positions of one of the currency swaps and one of the interest rate swaps in accordance with the collateral requirements for these derivatives. |
Risk Management Activities a_10
Risk Management Activities and Derivative Transactions Collateral (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 45 |
Likely cash collateral obligation increase | 22 | |
Collateralized Securities [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 | 932 | 900 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 59 | $ 45 |
Risk Management Activities a_11
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) $ in Millions | Mar. 31, 2019USD ($)megawatts | |
Derivative | ||
Total derivatives not subject to master netting or similar arrangement | $ | $ 42 | [1] |
Long-term Contract for Purchase of Electric Power [Domain] | ||
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. |
Risk Management Activities a_12
Risk Management Activities and Derivative Transactions Cash Flow from Hedging (Details) $ in Millions | Mar. 31, 2019USD ($) |
Cash Flow from Hedging [Abstract] | |
Associated bond issues currency exposure | $ 600 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | |
Investment Gains (Losses) | |||||
Debt Securities, Trading, and Equity Securities, FV-NI | $ 2,835 | $ 2,835 | |||
Financing Receivable, Net | 136 | 136 | $ 123 | ||
Balance in NDT | 2,100 | 2,100 | |||
Balance in ART | $ 698 | $ 698 | |||
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 | 0 | |||
SERP | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | $ 5 | $ (2) | $ (1) | $ 0 | |
DCP | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 1 | (1) | (2) | 0 | |
NDT | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 154 | (75) | (47) | (29) | |
ART | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 52 | $ (14) | (52) | $ 6 | |
Equity Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 142 | 142 | |||
Real Estate Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 26 | 26 | |||
Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 11 | 11 | |||
Private Equity Funds [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 59 | 59 | |||
Private real estate funds [Member] | |||||
Investment Gains (Losses) | |||||
Fair value plan assets gross | 11 | 11 | |||
Private Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | $ 6 | $ 6 |
Fair Value Measurements Fair _2
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Mar. 31, 2019USD ($) |
Nonperformance Risk | |
Derivative Credit Risk Valuation Adjustment, Derivative Assets | $ 1 |
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities | $ 1 |
Fair Value Measurements Fair _3
Fair Value Measurements Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financing Receivable, Net | $ 136 | $ 123 | ||
Investments | ||||
Equity securities | 258 | 220 | ||
Government debt securities | 269 | 236 | ||
Corporate debt securities | 504 | 499 | ||
Mortgage and asset-backed securities | 34 | 50 | ||
Institutional mutual funds | 224 | 126 | ||
Forward debt securities contracts | 59 | 45 | ||
Private credit measured at net asset value | 19 | |||
Private equity funds measured at net asset value(1) | 140 | 132 | [1] | |
Private real estate funds measured at net asset value(1) | 128 | 124 | [1] | |
Commingled funds measured at net asset value(1) | 1,200 | 1,430 | [1] | |
Total investments | 2,835 | 2,862 | ||
Commodity contract derivatives | 42 | 72 | ||
Total | 2,877 | 2,934 | ||
Liabilities | ||||
Currency swaps | [2] | 123 | 94 | |
Interest rate swaps | 1,408 | 1,199 | ||
Commodity contract derivatives | (14) | (12) | ||
Total | 1,545 | 1,305 | ||
Fair Value, Inputs, Level 1 | ||||
Investments | ||||
Equity securities | 258 | 220 | ||
Government debt securities | 219 | 199 | ||
Corporate debt securities | 0 | 0 | ||
Mortgage and asset-backed securities | 0 | 0 | ||
Institutional mutual funds | 224 | 126 | ||
Forward debt securities contracts | 0 | 0 | ||
Private credit measured at net asset value | 0 | |||
Private equity funds measured at net asset value(1) | 0 | 0 | [1] | |
Private real estate funds measured at net asset value(1) | 0 | 0 | [1] | |
Commingled funds measured at net asset value(1) | 0 | 0 | [1] | |
Total investments | 701 | 545 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 701 | 545 | ||
Liabilities | ||||
Currency swaps | 0 | 0 | [2] | |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 0 | 0 | ||
Fair Value, Inputs, Level 2 | ||||
Investments | ||||
Equity securities | 0 | 0 | ||
Government debt securities | 50 | 37 | ||
Corporate debt securities | 504 | 499 | ||
Mortgage and asset-backed securities | 34 | 50 | ||
Institutional mutual funds | 0 | 0 | ||
Forward debt securities contracts | 59 | 45 | ||
Private credit measured at net asset value | 0 | |||
Private equity funds measured at net asset value(1) | 0 | 0 | [1] | |
Private real estate funds measured at net asset value(1) | 0 | 0 | [1] | |
Commingled funds measured at net asset value(1) | 0 | 0 | [1] | |
Total investments | 647 | 631 | ||
Commodity contract derivatives | 2 | 13 | ||
Total | 649 | 644 | ||
Liabilities | ||||
Currency swaps | 123 | 94 | [2] | |
Interest rate swaps | 1,408 | 1,199 | ||
Commodity contract derivatives | (12) | (11) | ||
Total | 1,543 | 1,304 | ||
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 credit measured at net asset value | 0 | |||
Private equity funds measured at net asset value(1) | 0 | 0 | [1] | |
Private real estate funds measured at net asset value(1) | 0 | 0 | [1] | |
Commingled funds measured at net asset value(1) | 0 | 0 | [1] | |
Total investments | 0 | 0 | ||
Commodity contract derivatives | 40 | 59 | ||
Total | 40 | 59 | ||
Liabilities | ||||
Currency swaps | 0 | 0 | [2] | |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 2 | (1) | ||
Total | $ 2 | $ 1 | ||
[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 14 — Offsetting of Derivative Assets and Liabilities. |
Fair Value Measurements Fair _4
Fair Value Measurements Fair Value Measurements Using Significant Unobservable Inputs (Details) tons-per-year in Billions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2019USD ($)tons-per-year | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)tons-per-year | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($)tons-per-year | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Commodity contract derivatives | $ 42,000,000 | $ 42,000,000 | $ 72,000,000 | |||||
Commodity contract derivatives | $ 14,000,000 | $ 14,000,000 | $ 12,000,000 | |||||
Maximum | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair value measurements tons per year | tons-per-year | 0.8 | 0.8 | 0.8 | |||||
Price per ton | $ 112.64 | $ 112.64 | $ 112.24 | |||||
Minimum | ||||||||
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 | 0.7 | |||||
Price per ton | $ 12.25 | $ 12.25 | $ 12.25 | |||||
Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Commodity contract derivatives | 40,000,000 | 40,000,000 | 59,000,000 | |||||
Commodity contract derivatives | (2,000,000) | (2,000,000) | 1,000,000 | |||||
Commodity Contract Derivatives | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Balance | 38,000,000 | $ (52,000,000) | 38,000,000 | $ (52,000,000) | $ 63,000,000 | $ 58,000,000 | $ (73,000,000) | $ (67,000,000) |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | $ (25,000,000) | $ 21,000,000 | $ (20,000,000) | $ 15,000,000 |
Fair Value Measurements Estimat
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Carrying Value | ||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables (including current portion) | $ 107 | $ 112 |
Loans and other long-term receivables, net (including current portion) | 151 | 138 |
EnergyRight® financing obligation (including current portion) | 120 | 127 |
Unfunded loan commitments | 0 | 0 |
Membership interest of variable interest entities subject to mandatory redemption (including current portion) | 29 | 30 |
Long-term outstanding power bonds (including current maturities), net | 20,193 | 21,189 |
Long-term debt of variable interest entities (including current maturities), net | 1,146 | 1,165 |
Long-term notes payable (including current maturities) | 48 | 69 |
EnergyRight® receivables (including current portion) | 106 | 112 |
Loans and other long-term receivables, net (including current portion) | 136 | 123 |
EnergyRight® financing obligation (including current portion) | 135 | 143 |
Unfunded loan commitments | 5 | 3 |
Membership interest of variable interest entities subject to mandatory redemption (including current portion) | 36 | 37 |
Long-term outstanding power bonds (including current maturities), net | 24,180 | 23,896 |
Long-term debt of variable interest entities (including current maturities), net | 1,299 | 1,256 |
Long-term notes payable (including current maturities) | $ 47 | $ 68 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2017 | |
Other Income (Expense), Net | |||||
Deposit Liabilities, Description | 0 | 0 | 21 | 0 | |
External services | $ 2 | $ 4 | $ 6 | $ 8 | |
Interest income | 6 | 6 | 12 | 11 | |
Gains (losses) on investments | 6 | 0 | (1) | 3 | |
Miscellaneous | 0 | 1 | 0 | 1 | |
Total other income (expense), net | 14 | $ 11 | 38 | $ 23 | $ 23 |
Increase in Other Income/Expense | $ 3 | $ 15 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) | 6 Months Ended |
Mar. 31, 2019plans | |
Retirement Plan Disclosure | |
Number of unfunded post-retirement health care plans | 2 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2017 | Sep. 30, 2019 | |
Other Pension Plan | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | $ 150 | $ 25 | |||
Pension Benefits | |||||
Retirement Plan Disclosure | |||||
Service cost | $ 10 | 22 | $ 13 | $ 27 | |
Interest cost | 126 | 249 | 119 | 237 | |
Expected return on plan assets | 120 | 239 | (119) | (239) | |
Amortization of prior service cost | (24) | (49) | (24) | (49) | |
Recognized net actuarial loss | (86) | (168) | 101 | 204 | |
Total net periodic benefit cost as actuarially determined | 78 | 151 | 90 | 180 | |
Amount capitalized due to actions of regulator | 2 | (1) | (13) | (27) | |
Total net periodic benefit cost | 76 | 152 | 77 | 153 | |
Other Post-retirement Benefits | |||||
Retirement Plan Disclosure | |||||
Defined benefit plan contributions | 150 | ||||
Service cost | 3 | 6 | 3 | 7 | |
Interest cost | 5 | 9 | 4 | 9 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Amortization of prior service cost | (6) | (12) | (5) | (11) | |
Recognized net actuarial loss | (1) | 2 | 2 | 4 | |
Total net periodic benefit cost as actuarially determined | 3 | 5 | 4 | 9 | |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | 0 | |
Total net periodic benefit cost | $ 3 | $ 5 | $ 4 | $ 9 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | |
Other Pension Plan | |||
Retirement Plan Disclosure | |||
Defined benefit plan contributions | $ 150 | $ 25 | |
Other Post-retirement Benefits | |||
Retirement Plan Disclosure | |||
Defined benefit plan contributions | 150 | ||
SERP | |||
Retirement Plan Disclosure | |||
Defined benefit plan contributions | $ 5 | 1 | |
Minimum | Other Pension Plan | |||
Retirement Plan Disclosure | |||
Defined benefit plan contributions | 44 | $ 300 | |
Minimum | Other Post-retirement Benefits | |||
Retirement Plan Disclosure | |||
Defined benefit plan contributions | $ 20 |
Contingencies and Legal Proce_2
Contingencies and Legal Proceedings Contingencies (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2019USD ($)Insurance_layersProceduresreactors | Sep. 30, 2018USD ($) | |
Loss Contingencies | ||
Nuclear liability insurance | $ 450 | |
Assessment from licensees for each licensed reactor | $ 138 | |
Number of licensed reactors in US | reactors | 99 | |
Nuclear accident assessment limitation per year per unit | $ 20 | |
Maximum assessment per nuclear incident | 963 | |
Total amount of protection available | $ 14,100 | |
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 | 128 | |
Maximum idemnity if a covered accident takes or keeps a nuclear unit offline | 490 | |
Maximum retrospective premiums | 44 | |
Estimated future decommissioning cost | $ 4,977 | $ 4,779 |
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 | $ 153 | |
Possible additional future costs for compliance with CCR requirements | 1,155 | |
Possible additional future costs for compliance with Clean Water requirements. | 313 | |
Estimated liability for cleanup and environmental work | 16 | 12 |
Nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 3,070 | 2,989 |
Non-nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | $ 1,907 | $ 1,790 |
Contingencies and Legal Proce_3
Contingencies and Legal Proceedings Legal Proceedings (Details) | 6 Months Ended | ||
Mar. 31, 2019USD ($)megawattsUnitsGroupsAgreements | Sep. 30, 2018USD ($) | Jun. 30, 2013USD ($) | |
Legal Proceedings | |||
Number of licensed nuclear units | Units | 7 | ||
Amount paid for remediation under the consent decree | $ 150,000 | ||
Amount paid for remediation under amended consent decree | $ 100,000 | ||
Estimated Litigation Liability | $ 30,000,000 | ||
General | |||
Legal Proceedings | |||
Legal loss contingency accrual | $ 14,000,000 | ||
Environmental Agreements | |||
Legal Proceedings | |||
Number of similar environmental agreements entered into | Agreements | 2 | ||
Number of environmental agreements entered into with the EPA | Agreements | 1 | ||
Number of environmental agreements entered into with 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 | $ 290,000,000 | ||
Amount to be provided to fund environmental projects | 60,000,000 | ||
Amount to pay civil penalties | 10,000,000 | ||
Other long-term liabilities | General | |||
Legal Proceedings | |||
Legal loss contingency accrual | 12,000,000 | ||
Accounts payable and accrued liabilities | General | |||
Legal Proceedings | |||
Legal loss contingency accrual | $ 2,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Subsequent Event [Line Items] | |||
Redemptions/maturities of power bonds | $ 1,003 | [1] | $ 700 |
[1] | (1) All redemptions were at 100 percent of par. |
Gallatin Coal Combustion Resi_3
Gallatin Coal Combustion Residual Facilities (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Other Long-Term Liabilities | ||
Current regulatory assets | $ 241,000,000 | $ 414,000,000 |
Gallatin coal combustion residual facilities original estimated cost for dewatering facility | 71,000,000 | |
Gallatin coal combustion residual facilities estimated cost relocate offsite | 2,000,000,000 | |
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 | 864,000,000 | $ 862,000,000 |
Accounts payable and accrued liabilities | ||
Other Long-Term Liabilities | ||
Gallatin coal combustion residual facilities | $ 22,000,000 |
Revenue (Details)
Revenue (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019USD ($)Customerspercent | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)Customerspercent | Mar. 31, 2018USD ($) | |
State [Line Items] | ||||
Revenue Capitalized During Pre-Commercial Operations | $ 0 | $ (10,000,000) | $ 0 | $ (11,000,000) |
Electric revenue | (2,712,000,000) | (2,761,000,000) | (5,392,000,000) | (5,269,000,000) |
Sales of Electricity | 2,712,000,000 | 2,753,000,000 | 5,393,000,000 | 5,262,000,000 |
Off System Sales of Electricity | 0 | 2,000,000 | 1,000,000 | 4,000,000 |
Other revenue | $ 38,000,000 | 39,000,000 | $ 82,000,000 | 79,000,000 |
Total number of customers | 154 | 154 | ||
Total long duration contract revenue recognition | 2,514,000,000 | 4,981,000,000 | ||
Total number of customers that represent a percent of sales | percent | 1 | 1 | ||
Revenues | $ 2,750,000,000 | 2,792,000,000 | $ 5,475,000,000 | 5,341,000,000 |
ALABAMA | ||||
State [Line Items] | ||||
Electric revenue | (387,000,000) | (406,000,000) | (779,000,000) | (767,000,000) |
GEORGIA | ||||
State [Line Items] | ||||
Electric revenue | (70,000,000) | (73,000,000) | (137,000,000) | (136,000,000) |
KENTUCKY | ||||
State [Line Items] | ||||
Electric revenue | (173,000,000) | (174,000,000) | (341,000,000) | (333,000,000) |
MISSISSIPPI | ||||
State [Line Items] | ||||
Electric revenue | (249,000,000) | (252,000,000) | (501,000,000) | (489,000,000) |
NORTH CAROLINA | ||||
State [Line Items] | ||||
Electric revenue | (21,000,000) | (20,000,000) | (41,000,000) | (36,000,000) |
TENNESSEE | ||||
State [Line Items] | ||||
Electric revenue | (1,799,000,000) | (1,822,000,000) | (3,568,000,000) | (3,482,000,000) |
VIRGINIA | ||||
State [Line Items] | ||||
Electric revenue | $ (13,000,000) | $ (14,000,000) | $ (25,000,000) | $ (26,000,000) |
20-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 3 | 3 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 67 | |||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 34,000,000 | |||
15-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 11 | 11 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 251 | |||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 127,000,000 | |||
12-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 1 | 1 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 12 | |||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 6,000,000 | |||
10-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 52 | 52 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 1714 | |||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 862,000,000 | |||
6-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 1 | 1 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 25 | |||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 13,000,000 | |||
5-year termination notice [Member] | ||||
State [Line Items] | ||||
Number of customers | Customers | 86 | 86 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | 2912 | |||
Number of customers that represent the percent of sales | percent | 1 | 1 | ||
Revenues | $ 1,472,000,000 |
Revenue Customer Type (Details)
Revenue Customer Type (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |
Revenue, Major Customer [Line Items] | |||||
Other Significant Noncash Transaction, Value of Consideration Given | $ 10 | $ 50 | $ 100 | ||
Revenue Capitalized During Pre-Commercial Operations | $ 0 | $ (10) | 0 | (11) | |
Sales of Electricity | 2,712 | 2,753 | 5,393 | 5,262 | |
Electric revenue | 2,712 | 2,761 | 5,392 | 5,269 | |
Other revenue | 38 | 39 | 82 | 79 | |
Revenues | 2,750 | 2,792 | 5,475 | 5,341 | |
lpcs [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 2,514 | 2,564 | 4,981 | 4,880 | |
industries directly served [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 168 | 168 | 353 | 333 | |
federal agencies and other [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | $ 30 | $ 31 | $ 59 | $ 60 |
Revenue Energy Prepayment Agree
Revenue Energy Prepayment Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Proceeds from Maturities, Prepayments and Calls of Other Investments | $ 0 | $ 1,500 | ||
Other Significant Noncash Transaction, Value of Consideration Given | 10 | $ 50 | $ 100 | |
Discount to Revenue [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Other Significant Noncash Transaction, Value of Consideration Given | $ 12 | $ 4 | $ 23 |
Revenue noncash revenue (Detail
Revenue noncash revenue (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |
Other Significant Noncash Transactions [Line Items] | |||
Other Significant Noncash Transaction, Value of Consideration Given | $ 10 | $ 50 | $ 100 |
Revenue Unpaid Incentives (Deta
Revenue Unpaid Incentives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Paid Economic Incentives | $ 89 | $ 71 | $ 156 | $ 136 | |
Unpaid Economic Incentives | $ 154 | $ 154 | $ 145 |
Revenue Local Power Company C_2
Revenue Local Power Company Contracts (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019USD ($)Customerspercent | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)Customerspercent | Mar. 31, 2018USD ($) | |
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Total number of customers | 154 | 154 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 2,750,000,000 | $ 2,792,000,000 | $ 5,475,000,000 | $ 5,341,000,000 |
Total number of customers that represent the percent of sales | percent | 1 | 1 | ||
Total long-duration contracts revenue recognition | 2,514,000,000 | 4,981,000,000 | ||
5-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 86 | 86 | ||
Number of customers that represent the percent of sales | percent | 1 | 1 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 1,472,000,000 | |||
6-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 1 | 1 | ||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 13,000,000 | |||
10-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 52 | 52 | ||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 862,000,000 | |||
12-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 1 | 1 | ||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 6,000,000 | |||
15-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 11 | 11 | ||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 127,000,000 | |||
20-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers | Customers | 3 | 3 | ||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 34,000,000 |
Energy Prepayment Agreement (De
Energy Prepayment Agreement (Details) - USD ($) $ in Billions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018 | Mar. 31, 2019 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Proceeds from Maturities, Prepayments and Calls of Other Investments | $ 0 | $ 1.5 |
Plant Closures (Details)
Plant Closures (Details) - Property, Plant and Equipment [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Dispositions | 124 |
Property, Plant and Equipment, Disposals | $ 11,000,000 |
Depreciation expense | $ 115,000,000 |
Uncategorized Items - tve-20190
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 311,000,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 322,000,000 |