DEI Document
DEI Document shares in Millions | 9 Months Ended |
Jun. 30, 2020shares | |
Document Information [Line Items] | |
Entity Registrant Name | Tennessee Valley Authority |
Entity Central Index Key | 0001376986 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Document Quarterly Report | true |
Document Transition Report | false |
Local Phone Number | 632-2101 |
City Area Code | (865) |
Entity Address, Postal Zip Code | 37902 (Zip Code) |
Entity Tax Identification Number | 62-0474417 |
Entity File Number | 000-52313 |
Entity Address, Address Line One | 400 W. Summit Hill Drive |
Entity Address, City or Town | Knoxville |
Entity Address, State or Province | TN |
Entity Incorporation, State or Country Code | X1 |
Entity Interactive Data Current | Yes |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating revenues | ||||
Sales of Electricity | $ 2,216 | $ 2,565 | $ 7,237 | $ 7,958 |
Other revenue | 35 | 39 | 113 | 121 |
Revenues | 2,251 | 2,604 | 7,350 | 8,079 |
Operating expenses | ||||
Fuel | 312 | 417 | 1,164 | 1,359 |
Purchased power | 209 | 223 | 680 | 775 |
Operating and maintenance | 681 | 744 | 2,014 | 2,289 |
Depreciation and amortization | 389 | 576 | 1,430 | 1,387 |
Tax equivalents | 125 | 128 | 388 | 396 |
Total operating expenses | 1,716 | 2,088 | 5,676 | 6,206 |
Operating income | 535 | 516 | 1,674 | 1,873 |
Other income (expense), net | 16 | 14 | 27 | 52 |
Defined Benefit Plan, Other Cost (Credit) | 63 | 65 | 190 | 194 |
Interest expense | ||||
Interest expense | 283 | 300 | 859 | 902 |
Net income (loss) | $ 205 | $ 165 | $ 652 | $ 829 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||||
Net income (loss) | $ 205,000,000 | $ 165,000,000 | $ 652,000,000 | $ 829,000,000 | |||
Other comprehensive income (loss) | |||||||
Net unrealized gain (loss) on cash flow hedges | 31,000,000 | (47,000,000) | (56,000,000) | (76,000,000) | |||
Reclassification to earnings from cash flow hedges | (7,000,000) | 13,000,000 | [1] | (10,000,000) | [1] | 17,000,000 | [1] |
Total other comprehensive income (loss) | 24,000,000 | (34,000,000) | (66,000,000) | (59,000,000) | |||
Total comprehensive income (loss) | $ 229,000,000 | $ 131,000,000 | $ 586,000,000 | $ 770,000,000 | |||
[1] | There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash and cash equivalents | $ 800,000,000 | $ 299,000,000 |
Accounts receivable, net | 1,364,000,000 | 1,739,000,000 |
Inventories, net | 1,060,000,000 | 999,000,000 |
Regulatory assets | 149,000,000 | 156,000,000 |
Other current assets | 90,000,000 | 85,000,000 |
Total current assets | 3,463,000,000 | 3,278,000,000 |
Property, plant, and equipment | ||
Completed plant | 64,027,000,000 | 62,944,000,000 |
Less accumulated depreciation | (32,753,000,000) | (31,384,000,000) |
Net completed plant | 31,274,000,000 | 31,560,000,000 |
Construction in progress | 2,088,000,000 | 1,893,000,000 |
Nuclear fuel | 1,533,000,000 | 1,534,000,000 |
Capital leases | 139,000,000 | 146,000,000 |
Total property, plant, and equipment, net | 35,034,000,000 | 35,133,000,000 |
Investment funds | 2,991,000,000 | 2,968,000,000 |
Regulatory and other long-term assets | ||
Regulatory assets | 9,251,000,000 | 8,763,000,000 |
Operating Lease, Right-of-Use Asset | 332,000,000 | 0 |
Other long-term assets | 339,000,000 | 325,000,000 |
Total regulatory and other long-term assets | 9,922,000,000 | 9,088,000,000 |
Total assets | 51,410,000,000 | 50,467,000,000 |
Current liabilities | ||
Accounts payable and accrued liabilities | 2,055,000,000 | 1,812,000,000 |
Accrued interest | 280,000,000 | 296,000,000 |
Current portion of leaseback obligations | 177,000,000 | 40,000,000 |
Regulatory liabilities | 197,000,000 | 150,000,000 |
Short-term debt, net | 777,000,000 | 922,000,000 |
Current maturities of power bonds | 1,917,000,000 | 1,030,000,000 |
Current maturities of long-term debt of variable interest entities | 40,000,000 | 39,000,000 |
Current maturities of notes payable | 0 | 23,000,000 |
Total current liabilities | 5,443,000,000 | 4,312,000,000 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 5,912,000,000 | 6,181,000,000 |
Asset retirement obligations | 5,805,000,000 | 5,453,000,000 |
Operating Lease, Liability, Noncurrent | 244,000,000 | |
Operating Lease, Liability, Current | 101,000,000 | 0 |
Other long-term liabilities | 2,748,000,000 | 2,490,000,000 |
Leaseback obligations | 46,000,000 | 223,000,000 |
Regulatory liabilities | 5,000,000 | 0 |
Total other liabilities | 14,760,000,000 | 14,347,000,000 |
Long-term debt, net | ||
Long-term power bonds, net | 17,932,000,000 | 19,094,000,000 |
Long-term debt of variable interest entities, net | 1,069,000,000 | 1,089,000,000 |
Total long-term debt, net | 19,001,000,000 | 20,183,000,000 |
Liabilities | 39,204,000,000 | 38,842,000,000 |
Proprietary capital | ||
Power program appropriation investment | 258,000,000 | 258,000,000 |
Power program retained earnings | 11,476,000,000 | 10,823,000,000 |
Total power program proprietary capital | 11,734,000,000 | 11,081,000,000 |
Nonpower programs appropriation investment, net | 550,000,000 | 556,000,000 |
Accumulated other comprehensive income (loss) | (78,000,000) | (12,000,000) |
Total proprietary capital | 12,206,000,000 | 11,625,000,000 |
Total liabilities and proprietary capital | $ 51,410,000,000 | $ 50,467,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 823 | $ 323 | |
Cash flows from operating activities | |||
Net income (loss) | 652 | 829 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
Depreciation and amortization (including amortization of debt issuance costs and premiums/discounts) | 1,447 | 1,402 | |
Amortization of nuclear fuel cost | 284 | 277 | |
Non-cash retirement benefit expense | 243 | 235 | |
Amortization of Regulatory Asset | 65 | 240 | |
Changes in current assets and liabilities | |||
Accounts receivable, net | 376 | 149 | |
Inventories and other current assets, net | (86) | (145) | |
Accounts payable and accrued liabilities | (126) | (217) | |
Accrued interest | (20) | (21) | |
Pension contributions | (230) | (232) | |
Other, net | (109) | (38) | |
Net cash provided by operating activities | 2,496 | 2,479 | |
Cash flows from investing activities | |||
Construction expenditures | (1,221) | (1,292) | |
Nuclear fuel expenditures | (251) | (223) | |
Loans and other receivables | |||
Advances | (6) | (8) | |
Repayments | 5 | 6 | |
Other, net | 6 | (16) | |
Net cash used in investing activities | (1,467) | (1,533) | |
Long-term debt | |||
Redemptions and repurchases of power bonds | (1,286) | [1] | (1,034) |
Repayments of Other Long-term Debt | 20 | 19 | |
Redemptions of debt of variable interest entities | (23) | (46) | |
Short-term debt issues (redemptions), net | (145) | 196 | |
Payments on leases and leasebacks | (44) | (41) | |
Other, net | (3) | (1) | |
Net cash provided by (used in) financing activities | (528) | (945) | |
Net change in cash and cash equivalents | 501 | 1 | |
Cash and cash equivalents at end of period | 800 | ||
Significant non-cash transactions | |||
Proceeds from Issuance of Debt | 997 | 0 | |
Payments of Financing Costs | $ (4) | $ 0 | |
[1] | (1) The 2020 Series A Power Bonds were issued at 99.7 percent of par. (2) All redemptions were at 100 percent of par. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Power Program Appropriation Investment | $ 258,000,000 | $ 258,000,000 | $ 258,000,000 | |||||
Power Program Retained Earnings | 11,476,000,000 | 11,476,000,000 | 10,823,000,000 | |||||
Nonpower Programs Appropriation Investment, Net | 550,000,000 | 550,000,000 | 556,000,000 | |||||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | (78,000,000) | (78,000,000) | (12,000,000) | |||||
Total Proprietary Capital | 12,206,000,000 | $ 11,048,000,000 | 12,206,000,000 | $ 11,048,000,000 | $ 11,979,000,000 | 11,625,000,000 | $ 10,919,000,000 | $ 10,283,000,000 |
Net income (loss) | 205,000,000 | 165,000,000 | 652,000,000 | 829,000,000 | ||||
Total other comprehensive income (loss) | 24,000,000 | (34,000,000) | (66,000,000) | (59,000,000) | ||||
Return on power program appropriation investment | (2,000,000) | (2,000,000) | (5,000,000) | (5,000,000) | ||||
Power Program Appropriation Investment | ||||||||
Power Program Appropriation Investment | 258,000,000 | 258,000,000 | 258,000,000 | 258,000,000 | 258,000,000 | 258,000,000 | 258,000,000 | 258,000,000 |
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 | 11,476,000,000 | 10,234,000,000 | 11,476,000,000 | 10,234,000,000 | 11,271,000,000 | 10,823,000,000 | 10,069,000,000 | 9,404,000,000 |
Net income (loss) | 207,000,000 | 167,000,000 | 658,000,000 | 835,000,000 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | (2,000,000) | (2,000,000) | (5,000,000) | (5,000,000) | ||||
Nonpower Programs Appropriation Investment, Net | ||||||||
Nonpower Programs Appropriation Investment, Net | 550,000,000 | 558,000,000 | 550,000,000 | 558,000,000 | 552,000,000 | 556,000,000 | 560,000,000 | 564,000,000 |
Net income (loss) | (2,000,000) | (2,000,000) | (6,000,000) | (6,000,000) | ||||
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 | (78,000,000) | (2,000,000) | (78,000,000) | (2,000,000) | $ (102,000,000) | $ (12,000,000) | $ 32,000,000 | $ 57,000,000 |
Net income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | 24,000,000 | (34,000,000) | (66,000,000) | (59,000,000) | ||||
Return on power program appropriation investment | $ 0 | $ 0 | $ 0 | $ 0 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Statement - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Significant Noncash Transactions [Line Items] | |||
Capital Expenditures Incurred but Not yet Paid | $ 266 | $ 339 | |
Non-cash financing activities | $ 3 | $ 6 |
Statement of Cash Flows, Supple
Statement of Cash Flows, Supplemental Disclosures | 9 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information Construction in progress and Nuclear fuel expenditures included in Accounts payable and accrued liabilities at June 30, 2020 and 2019, were $339 million and $266 million, respectively, and are excluded from the Statements of Consolidated Cash Flows for the nine months ended June 30, 2020 and 2019, as non-cash investing activities.Excluded from the Statements of Consolidated Cash Flows at June 30, 2020 and 2019, as non-cash financing activities were lease obligations incurred related to lease equipment of $3 million and $6 million, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Summary of Significant Accounting Policies General The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("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 (collectively, "Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the U.S. 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 ("TVA Board") as authorized by the Tennessee Valley Authority Act of 1933, as amended ("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 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 business. TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment with the 2014 payment; 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 federal regulatory body. Fiscal Year TVA's fiscal year ends September 30. Years (2020, 2019, 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, 2019, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K/A for the year ended September 30, 2019 (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 on 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 9 — Variable Interest Entities . 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, including impacts from the COVID-19 pandemic, 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. In the June 30, 2019, Consolidated Statements of Cash Flows, amounts previously reported as $(10) million of Prepayment credits applied to revenue were reclassified to Other, net in cash flows from operating activities. 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 on 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 20 — Contingencies and Legal Proceedings — Legal Proceedings — Environmental Agreements . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash At June 30, 2020 At September 30, 2019 Cash and cash equivalents $ 800 $ 299 Restricted cash and cash equivalents included in Other long-term assets 23 23 Total cash, cash equivalents, and restricted cash $ 823 $ 322 Due to higher volatility in the financial markets associated with the Coronavirus Disease 2019 ("COVID-19") pandemic, TVA increased its target balance of Cash and cash equivalents beginning in March 2020 by $500 million through discount note issuances. Allowance for Uncollectible Accounts The allowance for uncollectible accounts reflects TVA's estimate of probable losses inherent in its accounts and loans receivable balances, excluding the EnergyRight ® loans receivable. 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. TVA continues to monitor the impact of the COVID-19 pandemic on accounts and loans receivable balances to evaluate the allowance for uncollectible accounts. The allowance for uncollectible accounts was less than $1 million at both June 30, 2020, and September 30, 2019, for accounts receivable. Additionally, loans receivable of $134 million and $131 million at June 30, 2020, and September 30, 2019, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively, and are reported net of allowances for uncollectible accounts of less than $1 million at both June 30, 2020, and September 30, 2019. 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. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net. Leases TVA recognizes a lease asset and lease liability for leases with terms of greater than 12 months. Lease assets represent TVA's right to use an underlying asset for the lease term, and lease liabilities represent TVA's obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. TVA has certain lease agreements that include variable lease payments that are based on energy production levels. These variable lease payments are not included in the measurement of the lease assets or lease liabilities but are recognized in the period in which the expenses are incurred. While not specifically structured as leases, certain power purchase agreements are deemed to contain a lease of the underlying generating units when the terms convey the right to control the use of the assets. Amounts recorded for these leases are generally based on the amount of the scheduled capacity payments due over the remaining terms of the power purchase agreements, the terms of which vary. The total lease obligation included in Accounts payable and accrued liabilities and Operating lease liabilities related to these agreements was $285 million at June 30, 2020. TVA has agreements with lease and non-lease components and has elected to account for the components separately. Consideration is allocated to lease and non-lease components generally based on relative standalone selling prices. TVA has lease agreements which include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in TVA's lease measurements. Leases with an initial term of 12 months or less, which do not include an option to extend the initial term of the lease to greater than 12 months that TVA is reasonably certain to exercise, are not recorded on the Consolidated Balance Sheets at June 30, 2020. Operating leases are recognized on a straight-line basis over the term of the lease agreement. Rent expense associated with short-term leases and variable leases is recorded in Operating and maintenance expense, Fuel expense, or Purchased power expense on the Consolidated Statements of Operations. Expenses associated with finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the related lease asset on the Consolidated Statements of Operations. 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 the external depreciation studies. These studies are updated at least every five years. Depreciation expense was $344 million and $536 million for the three months ended June 30, 2020 and 2019, respectively. Depreciation expense was $1.3 billion for both the nine months ended June 30, 2020 and 2019. See Note 5 — Plant Closures |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations | 9 Months Ended |
Jun. 30, 2020 | |
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 2020: 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, while also refining the definition of a lease. In addition, lessees are required to disclose key information about the amount, timing, and uncertainty of cash flows arising from leasing arrangements. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depend on its classification as a finance lease (formerly referred to as capital lease) or operating lease. The standard requires both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest on the lease liability separate from amortization expense. The accounting rules for the owner of assets leased by the lessee ("lessor accounting") remain relatively unchanged. Effective Date for TVA October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has elected the modified retrospective method of adoption effective October 1, 2019. Under the modified retrospective method of adoption, prior year reported results are not restated. Practical Expedient Description Package of transition practical expedients (for leases commenced prior to adoption date; expedients must be adopted as a package) Do not need to (1) reassess whether any expired or existing contracts are leases or contain leases, (2) reassess the lease classification for any expired or existing leases, or (3) reassess initial direct costs for any existing leases. Short-term lease expedient (elect by class of underlying asset) Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class. Existing and expired land easements not previously accounted for as leases Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment. Comparative reporting requirements for initial adoption Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption, and not apply the new requirements to comparative periods, including disclosures. 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 October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has adopted the standard on a prospective basis. The adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. TVA only uses hedge accounting under its foreign currency swap arrangements, and the adoption of this standard had no impact on those arrangements. 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 October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has adopted the standard on a prospective basis. Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. TVA records qualified implementation costs in a cloud arrangement that is a service contract as a prepaid asset and amortizes the prepaid asset to Operating and maintenance expense based on the term of the contract. The following accounting standards have been issued but at June 30, 2020, were not effective and had not been adopted by TVA: 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 plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA will adopt this standard using the modified retrospective method through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Upon adoption, TVA will recognize an allowance for credit losses based on management's estimate of losses expected to be incurred over the life of certain financial assets. This standard will primarily impact TVA's long-term loans receivable. Adoption of this standard is not expected to have a material impact on TVA's financial condition, results of operations, or cash flows. 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 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 continuing to evaluate the potential impact on related disclosures. Reference Rate Reform Description The guidance provides temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rates. Effective Date for TVA The new standard is effective for adoption at any time between March 12, 2020, and December 31, 2022. TVA currently plans to adopt the standard by December 31, 2022. Effect on the Financial Statements or Other Significant Matters TVA continues to review this standard and evaluate the impact of using an alternative reference rate instead of LIBOR in its interest rate swap contracts. TVA expects the adoption of the standard will simplify the accounting for any modifications to its interest rate swap contracts. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable: Accounts Receivable, Net At June 30, 2020 At September 30, 2019 Power receivables $ 1,286 $ 1,624 Other receivables 78 115 Accounts receivable, net (1) $ 1,364 $ 1,739 Note (1) Allowance for uncollectible accounts was less than $1 million at June 30, 2020, and September 30, 2019, and therefore is not represented in the table above. In response to the COVID-19 pandemic, the TVA Board approved the Public Power Support and Stabilization Program, which includes alternative wholesale payment arrangements for LPCs, on March 25, 2020. TVA is offering up to $1.0 billion of credit support to LPCs that demonstrate the need for temporary financial relief, through the deferral of a portion of LPCs' wholesale power payments owed to TVA. The program, which began in April 2020, requires LPCs to apply monthly and is subject to approval by TVA. If approved, TVA will establish a repayment schedule based on the LPC's need, not to exceed two years, and an initial repayment date will be approved by TVA no later than December 31, 2020. As of August 3, 2020, $1 million of credit support has been approved under the Public Power Support and Stabilization Program. |
Inventories, Net
Inventories, Net | 9 Months Ended |
Jun. 30, 2020 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At June 30, 2020 At September 30, 2019 Materials and supplies inventory $ 784 $ 742 Fuel inventory 307 294 Renewable energy certificates/emission allowance inventory, net 15 16 Allowance for inventory obsolescence (46) (53) Inventories, net $ 1,060 $ 999 |
Other Long-Term Assets
Other Long-Term Assets | 9 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets The table below summarizes the types and amounts of TVA's other long-term assets: Other Long-Term Assets At June 30, 2020 At September 30, 2019 Loans and other long-term receivables, net $ 128 $ 125 EnergyRight ® receivables 73 81 Prepaid long-term service agreements (1) 39 22 Restricted cash and cash equivalents 23 23 Prepaid capacity payments 13 19 Other 63 55 Total other long-term assets $ 339 $ 325 Note (1) Certain amounts have been reclassified to conform with current year presentation. EnergyRight ® Receivables . In association with the EnergyRight ® program, TVA's local power company customers ("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 its 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. At June 30, 2020, and September 30, 2019, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was $18 million and $20 million, respectively. See Note 10 — Other Long-Term Liabilities for information regarding the associated financing obligation. In response to the COVID-19 pandemic, customers experiencing financial hardship can request a deferral of loan payments for a period of up to six months. This deferral option began April 20, 2020, and is available through October 31, 2020. Deferred loans will not accrue interest during the deferral months. Prepaid Long-Term Service Agreements . 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, payments made exceed the value of parts received and services rendered. The current and long-term portions of the resulting prepayments are reported in Other current assets and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At June 30, 2020, and September 30, 2019, prepayments of $4 million and $5 million, respectively, were recorded in Other current assets. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 9 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 At September 30, 2019 Current regulatory assets Unrealized losses on interest rate derivatives $ 111 $ 89 Unrealized losses on commodity derivatives 38 39 Fuel cost adjustment receivable — 28 Total current regulatory assets 149 156 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 4,524 4,756 Non-nuclear decommissioning costs 2,012 1,741 Nuclear decommissioning costs 963 868 Unrealized losses on interest rate derivatives 1,603 1,241 Unrealized losses on commodity contracts 2 15 Other non-current regulatory assets 147 142 Total non-current regulatory assets 9,251 8,763 Total regulatory assets $ 9,400 $ 8,919 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 121 $ 138 Fuel cost adjustment 71 — Unrealized gains on commodity derivatives 5 12 Total current regulatory liabilities 197 150 Non-current regulatory liabilities Unrealized gains on commodity derivatives 5 — Total regulatory liabilities $ 202 $ 150 Due to higher volatility in the financial markets associated with the COVID-19 pandemic, TVA has experienced unrealized losses related to its derivative instruments for the nine months ended June 30, 2020. TVA does not recognize unrealized gains and losses from the investment portfolios and derivative instruments within earnings but rather defers all such gains and losses within a regulatory liability or asset in accordance with its accounting policy. See Note 14 — Risk Management Activities and Derivative Transactions and Note 15 — Fair Value Measurements. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Jun. 30, 2020 | |
Text Block [Abstract] | |
Variable Interest Entity Disclosure | 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 ("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 ("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 ("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 ("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 on 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 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 at June 30, 2020, and September 30, 2019, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At June 30, 2020 At September 30, 2019 Current liabilities Accrued interest $ 24 $ 11 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 40 39 Total current liabilities 67 53 Other liabilities Other long-term liabilities 24 25 Long-term debt, net Long-term debt of variable interest entities, net 1,069 1,089 Total liabilities $ 1,160 $ 1,167 Interest expense of $13 million and $14 million for the three months ended June 30, 2020 and 2019, respectively, and $41 million and $42 million for the nine months ended June 30, 2020 and 2019, respectively, is included on 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 | 9 Months Ended |
Jun. 30, 2020 | |
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 and finance leases, as well as 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 (in millions) At June 30, 2020 At September 30, 2019 Interest rate swap liabilities $ 1,997 $ 1,676 Finance lease liabilities 180 182 Currency swap liabilities 166 193 EnergyRight ® financing obligations 81 90 Paradise pipeline financing obligation 79 80 Accrued long-term service agreements 59 66 Other 186 203 Total other long-term liabilities $ 2,748 $ 2,490 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. At June 30, 2020, and September 30, 2019, the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities was $111 million and $88 million, respectively. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. As of June 30, 2020, interest rate swap liabilities increased $344 million as compared to September 30, 2019, primarily due to a decrease in interest rates resulting in higher mark-to-market values on future expected net cash flows. EnergyRight ® Financing Obligations . TVA purchases certain loans receivable from its LPCs in association with the EnergyRight ® program. The current and long-term portions of the resulting financing obligations are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. At June 30, 2020, and September 30, 2019, the carrying amount of the financing obligations reported in Accounts payable and accrued liabilities was $20 million and $23 million, respectively. See Note 7 — Other Long-Term Assets for information regarding the associated loans receivable. In response to the COVID-19 pandemic, customers experiencing financial hardship can request a deferral of loan payments for a period of up to six months. This deferral option began April 20, 2020, and is available through October 31, 2020. Deferred loans will not accrue interest during the deferral months. 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. TVA accounts for this contract 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. At both June 30, 2020, and September 30, 2019, related liabilities of less than $1 million were recorded in Accounts payable and accrued liabilities. Accrued Long-Term Service Agreements. 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. At June 30, 2020, and September 30, 2019, related liabilities of $11 million and $12 million, respectively, were recorded in Accounts payable and accrued liabilities. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Jun. 30, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the nine months ended June 30, 2020, TVA's total asset retirement obligations ("ARO") liability increased $455 million as a result of periodic accretion and revisions in estimate, partially offset by settlement projects that were conducted during the period. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the nine months ended June 30, 2020, $127 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 8 — Regulatory Assets and Liabilities . TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 — Fair Value Measurements — Investment Funds and Note 20 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for disclosure of the current balances of the trusts and a discussion of the trusts' objectives. Asset Retirement Obligation Activity (1) Nuclear Non-Nuclear Total Balance at September 30, 2019 $ 3,136 $ 2,480 $ 5,616 Settlements — (85) (85) Revisions in estimate — 387 387 Accretion (recorded as regulatory asset) 106 47 153 Balance at June 30, 2020 $ 3,242 $ 2,829 $ 6,071 Note (1) The current portions of the ARO liability in the amounts of $266 million and $163 million at June 30, 2020, and September 30, 2019, respectively, are included in Accounts payable and accrued liabilities. |
Debt and Other Obligations
Debt and Other Obligations | 9 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Debt Outstanding Total debt outstanding at June 30, 2020, and September 30, 2019, consisted of the following: Debt Outstanding (in millions) At June 30, 2020 At September 30, 2019 Short-term debt Short-term debt, net $ 777 $ 922 Current maturities of power bonds issued at par (1) 1,917 1,030 Current maturities of long-term debt of VIEs issued at par 40 39 Current maturities of notes payable — 23 Total current debt outstanding, net 2,734 2,014 Long-term debt Long-term power bonds (2) 18,057 19,225 Long-term debt of VIEs, net 1,069 1,089 Unamortized discounts, premiums, issue costs, and other (125) (131) Total long-term debt, net 19,001 20,183 Total debt outstanding $ 21,735 $ 22,197 Notes (1) Includes net exchange gain from currency transactions of $83 million at June 30, 2020. There were no such amounts at September 30, 2019. (2) Includes net exchange gain from currency transactions of $101 million and $191 million at June 30, 2020, and September 30, 2019, respectively. For the nine months ended June 30, 2020, long-term debt decreased primarily due to approximately $1.9 billion of power bonds maturing in 2021, offset by a $1.0 billion power bond issuance in May 2020. Short-term debt increased primarily due to power bonds maturing in 2021. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2019, to June 30, 2020: Debt Securities Activity Date Amount (in millions) Interest Rate Issues (1) 2020 Series A Power Bonds May 2020 $ 1,000 0.75 % Discount on debt issues (3) Total long-term debt issues $ 997 Redemptions/Maturities (2) electronotes ® First Quarter 2020 $ 217 3.33 % electronotes ® Third Quarter 2020 1 2.65 % 2009 Series B December 2019 1 3.77 % 2018 Series A March 2020 1,000 2.25 % 1999 Series A PARRS (TVE) May 2020 23 3.36 % 1998 Series D PARRS (TVC) June 2020 17 3.55 % 2009 Series B June 2020 27 3.77 % Total redemptions/maturities of power bonds 1,286 Notes payable 23 1.64 % Debt of variable interest entities 20 4.32 % Total redemptions/maturities of debt $ 1,329 Notes (1) The 2020 Series A Power Bonds were issued at 99.7 percent of par. (2) All redemptions were at 100 percent of par. Credit Facility Agreements TVA 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 $1.0 billion credit facility that matures on June 13, 2023, a $1.0 billion credit facility that matures on September 28, 2023, and a $500 million credit facility that matures on February 1, 2025. 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 June 30, 2020, and September 30, 2019, there were approximately $1.5 billion and $1.3 billion, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. See Note 14 — Risk Management Activities and Derivative Transactions — 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 June 30, 2020 (in millions) Facility Limit Letters of Credit Outstanding Cash Borrowings Availability Maturity Date December 2021 $ 150 $ 38 $ — $ 112 June 2023 1,000 522 — 478 September 2023 1,000 450 — 550 February 2025 500 500 — — Total $ 2,650 $ 1,510 $ — $ 1,140 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 2019 with a maturity date of September 30, 2020. 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 June 30, 2020. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit. 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 ("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 June 30, 2020 , and September 30, 2019, the outstanding leaseback obligations related to the remaining CTs and QTE were $223 million and $263 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. These transactions were terminated in July 2019. In May 2020, TVA made final rent payments under lease/leaseback transactions involving eight additional CTs, and TVA had previously acquired the equity interest related to these transactions. Rent payments under the remaining CT lease/leaseback transactions are scheduled to be made through January 2022. TVA does have the option to acquire the equity interests related to transactions involving the remaining eight CTs for additional amounts. In addition, on October 30, 2019, TVA provided notice of its intent to purchase the ownership interest in certain QTE. Repurchase payments are expected to be paid through a series of installments in 2021 and 2022, after which the associated leases will be terminated. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 and 2019, TVA reclassified $7 million of gains and $13 million of losses, respectively, related to its cash flow hedges from AOCI to Interest expense. During the nine months ended June 30, 2020 and 2019, TVA reclassified $10 million of gains and $17 million of losses, respectively, related to its cash flow hedges from AOCI to Interest expense. See Note 14 — Risk Management Activities and Derivative Transactions. TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in AOCI or that would impact the statements of operations are recorded as regulatory assets or regulatory liabilities. See Note 8 — Regulatory Assets and Liabilities for a schedule of regulatory assets and liabilities. See Note 14 — Risk Management Activities and Derivative Transactions for a discussion of the recognition in AOCI of gains and losses associated with certain derivative contracts. See Note 15 — Fair Value Measurements for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 19 — Benefit Plans 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 | 9 Months Ended |
Jun. 30, 2020 | |
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 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 suspended its Financial Trading Program ("FTP") in 2014 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) (in millions) Three Months Ended Nine Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2020 2019 2020 2019 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 $ 31 $ (47) $ (56) $ (76) Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense (in millions) Three Months Ended Nine Months Ended Derivatives in Cash Flow Hedging Relationship 2020 2019 2020 2019 Currency swaps $ 7 $ (13) $ 10 $ (17) Note (1) There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended June 30 Nine Months Ended June 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2020 2019 2020 2019 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 $ (25) $ (19) $ (69) $ (59) 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 (2) — (1) — 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 were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and nine months ended June 30, 2020 and 2019. Fair Values of TVA Derivatives (in millions) At June 30, 2020 At September 30, 2019 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (90) Accounts payable and accrued liabilities $(89); Other long-term liabilities $(1) $ (90) Accounts payable and £250 million Sterling (85) Accounts payable and accrued liabilities $(6); Other long-term liabilities $(79) (61) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(56) £150 million Sterling (89) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(86) (57) 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 $ (1,492) Accounts payable and $ (1,261) Accounts payable and $476 million notional (611) Accounts payable and (498) Accounts payable and $42 million notional (5) Accounts payable and (5) Accounts payable and Commodity contract derivatives (30) Other current assets $5; Other long-term assets $5; Accounts payable and accrued liabilities $(38); Other long-term liabilities $(2) (41) Other current assets $12; Accounts payable and accrued liabilities $(37); Other long-term liabilities $(16) 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 at June 30, 2020, with total currency exposure of £600 million and expiration dates ranging fr om 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 on TVA's Consolidated Statements of Operations. For the three months ended June 30, 2020 and 2019, the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized gains of $15 million and unrealized losses of $159 million, respectively. For the nine months ended June 30, 2020 and 2019, the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized losses of $370 million and $369 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 June 30, 2020, TVA's coal and natural gas contract derivatives had terms of up to two and four years, respectively. Commodity Contract Derivatives At June 30, 2020 At September 30, 2019 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 6 8 million tons $ (10) 8 9 million tons $ (4) Natural gas contract derivatives 44 355 million mmBtu (20) 65 330 million mmBtu (37) Offsetting of Derivative Assets and Liabilities The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets at June 30, 2020, and September 30, 2019, are shown in the table below: Derivative Assets and Liabilities (1) (in millions) At June 30, 2020 At September 30, 2019 Assets Commodity derivatives not subject to master netting or similar arrangement $ 10 $ 12 Liabilities Currency swaps (2) $ 264 $ 208 Interest rate swaps (2) 2,108 1,764 Total derivatives subject to master netting or similar arrangement 2,372 1,972 Commodity derivatives not subject to master netting or similar arrangement 40 53 Total liabilities $ 2,412 $ 2,025 Notes (1) Offsetting 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. There were no offsetting amounts on TVA's Consolidated Balance Sheets at either June 30, 2020, or September 30, 2019. (2) Letters of credit of approximately $1.5 billion and $1.3 billion were posted as collateral at June 30, 2020, and September 30, 2019, 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 — Fair Value Measurements — 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 June 30, 2020, and September 30, 2019, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $11 million and $22 million at June 30, 2020, and September 30, 2019, 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 June 30, 2020, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $2.4 billion. TVA's collateral obligations at June 30, 2020, under these arrangements were approximately $1.5 billion, for which TVA had posted approximately $1.5 billion in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the contract as a result of this posted collateral. For all of its derivative instruments with credit-risk related contingent features: • If TVA remains a majority-owned U.S. government entity but Standard & Poor's Financial Services, LLC 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. 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. Of the $1.3 billion and $1.6 billion of receivables from power sales outstanding at June 30, 2020, and September 30, 2019, respectively, nearly all counterparties were rated investment grade. The obligations of customers that are not investment grade are secured by collateral. 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. TVA believes its policies and procedures for counterparty performance risk reviews have generally protected TVA against significant exposure related to market and economic conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts and Note 3 — Accounts Receivable, Net . TVA had revenue from two LPCs that collectively accounted for 18 percent of total operating revenues for both the three months ended June 30, 2020 and 2019. TVA had revenue from two LPCs that collectively accounted for 17 percent and 16 percent of total operating revenues for the nine months ended June 30, 2020 and 2019, respectively. Suppliers . TVA assesses potential supplier performance risks, including procurement of fuel, parts, and services. If suppliers are unable to perform under TVA's existing contracts or if TVA is unable to obtain similar services from other vendors, TVA could experience delays, disruptions, additional costs, or other operational outcomes that may impact generation, maintenance, and capital programs. 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. Natural Gas . TVA purchases the majority of its natural gas requirements from a variety of suppliers under short-term contracts. In the event of nonperformance by these suppliers, TVA believes that it can obtain replacement natural gas. Coal . To help ensure a reliable supply of coal, TVA had coal contracts with multiple suppliers at June 30, 2020. The contracted supply of coal is sourced from multiple geographic regions of the U.S. and is to be delivered via various transportation methods (e.g., 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, including impacts from the COVID-19 pandemic, could result in consolidations, additional bankruptcies, restructuring, contract renegotiations, or other scenarios. Nuclear Fuel . Nuclear fuel is obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, and contracted fuel fabrication services. The supply markets for uranium concentrates and certain nuclear fuel services are subject to price fluctuations and availability restrictions. Supply market conditions may make procurement contracts subject to credit risk related to the potential nonperformance of counterparties. In the event of nonperformance by these or other suppliers, TVA believes that replacement uranium concentrate and nuclear fuel services can be obtained, although at prices that may be unfavorable when compared to the prices under the current supply agreements. Purchased Power . 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. Other Suppliers . At this time, TVA has experienced minimal impacts due to force majeure events, with the exception of a manufacturing delay for a major turbine component. TVA and the vendor have developed a mitigation strategy to reduce projected delays and impacts to TVA's outage schedule. Derivative Counterparties . T VA has entered into physical and financial contracts that qualify as derivatives for hedging purposes, and TVA's NDT, ART, 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, the ART, 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, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At June 30, 2020, all of TVA's currency swaps and interest rate swaps as well as all of the derivatives in the NDT and ART 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 June 30, 2020, the coal contracts were with counterparties whose Moody's credit rating, or TVA's internal analysis when such information was unavailable, ranged from B1 to Ba1. At June 30, 2020, the natural gas contracts were with counterparties whose ratings ranged from Caa2 to A2. See Suppliers above for discussion of challenges facing the coal industry. TVA recognizes the oil and gas industry has been impacted as the result of the COVID-19 pandemic and the slowdown in demand. TVA will continue to monitor the impacts and affected credit ratings and enforce contract performance assurance provisions when applicable. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020, Investment funds were comprised of $3.0 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 $777 million, respectively, at June 30, 2020. 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 asset 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 $216 million, unfunded commitments related to private real assets of $58 million, and unfunded commitments related to private credit of $20 million at June 30, 2020. The ART had unfunded commitments related to private equity limited partnerships of $133 million, unfunded commitments related to private real assets of $50 million, and unfunded commitments related to private credit of $10 million at June 30, 2020. 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. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. TVA's private equity limited partnerships, private real asset 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 — Summary of Significant Accounting Policies — Cost-Based Regulation and Note 8 — Regulatory Assets and Liabilities . TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows: Unrealized Investment Gains (Losses) (in millions) Three Months Ended Nine Months Ended Fund Financial Statement Presentation 2020 2019 2020 2019 NDT Regulatory asset $ 235 $ (37) $ (11) $ (84) ART Regulatory asset 97 (6) (1) (58) SERP Other income (expense) 7 1 (1) — DCP Other income (expense) 2 1 — (1) Due to higher volatility in the financial markets associated with the COVID-19 pandemic, TVA has experienced fluctuations related to its ART and NDT investment portfolio during the nine months ended June 30, 2020. The losses experienced during the three months ended March 31, 2020, have been recovered. For the nine months ended June 30, 2020, the NDT has increased in value $17 million. Despite this volatility, TVA’s NDT funding as of June 30, 2020, continues to be fully funded per the Nuclear Regulatory Commission’s (“NRC”) funding requirements. Currency and Interest Rate Derivatives See Note 14 — Risk Management Activities and Derivative Transactions — 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-term 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 2019) 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 June 30, 2020. 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 at June 30, 2020, and September 30, 2019. Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement. TVA's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the determination of the fair value of the assets and liabilities and their classification in the fair value hierarchy levels. Fair Value Measurements At June 30, 2020 (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 470 $ — $ — $ 470 Government debt securities 366 52 — 418 Corporate debt securities — 322 — 322 Mortgage and asset-backed securities — 28 — 28 Institutional mutual funds 173 — — 173 Forward debt securities contracts — 11 — 11 Private credit funds measured at net asset value (1) — — — 57 Private equity funds measured at net asset value (1) — — — 181 Private real asset funds measured at net asset value (1) — — — 162 Commingled funds measured at net asset value (1) — — — 1,169 Total investments 1,009 413 — 2,991 Commodity contract derivatives — 8 2 10 Total $ 1,009 $ 421 $ 2 $ 3,001 Quoted Prices in Active Markets for Identical Liabilities Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 264 $ — $ 264 Interest rate swaps — 2,108 — 2,108 Commodity contract derivatives — 28 12 40 Total $ — $ 2,400 $ 12 $ 2,412 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 on 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 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements At September 30, 2019 (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 464 $ — $ — $ 464 Government debt securities 279 65 — 344 Corporate debt securities — 417 — 417 Mortgage and asset-backed securities — 32 — 32 Institutional mutual funds 250 — — 250 Forward debt securities contracts — 22 — 22 Private equity funds measured at net asset value (1) — — — 140 Private real estate funds measured at net asset value (1) — — — 135 Private credit funds measured at net asset value (1) — — — 33 Commingled funds measured at net asset value (1) — — — 1,131 Total investments 993 536 — 2,968 Commodity contract derivatives — 7 5 12 Total $ 993 $ 543 $ 5 $ 2,980 Quoted Prices in Active Markets for Identical Liabilities Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 208 $ — $ 208 Interest rate swaps — 1,764 — 1,764 Commodity contract derivatives — 44 9 53 Total $ — $ 2,016 $ 9 $ 2,025 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 on 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 — Risk Management Activities and Derivative Transactions — 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 (in millions) Commodity Contract Derivatives Three Months Ended Nine Months Ended Balance at beginning of period $ 38 $ 58 Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (19) (39) Balance at June 30, 2019 $ 19 $ 19 Balance at beginning of period $ (7) $ (4) Settlements (1) (1) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (2) (5) Balance at June 30, 2020 $ (10) $ (10) 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 June 30, 2020 Valuation Technique(s) Unobservable Inputs Range (1) Assets Commodity contract derivatives $ 2 Pricing model Coal supply and demand 0.5 - 0.6 billion tons/year Long-term market prices $11.90 - $43.00/ton Liabilities Commodity contract derivatives 12 Pricing model Coal supply and demand 0.5 - 0.6 billion tons/year Long-term market prices $11.90 - $43.00/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2019 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 5 Pricing model Coal supply and demand 0.4 - 0.8 billion tons/year Long-term market prices $12.10 - $94.51/ton Liabilities Commodity contract derivatives 9 Pricing model Coal supply and demand 0.4 - 0.8 billion tons/year Long-term market prices $12.10 - $94.51/ton Note (1) During the third quarter of 2020, TVA updated the range estimate to align with the maximum contract term of related commodity contract derivatives. 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 instruments. The fair value of the financial instruments held at June 30, 2020, and September 30, 2019, 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 June 30, 2020, and September 30, 2019, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At June 30, 2020 At September 30, 2019 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables (including current portion) Level 2 $ 91 $ 90 $ 101 $ 100 Loans and other long-term receivables, net (including current portion) Level 2 134 122 131 120 EnergyRight ® financing obligations (including current portion) Level 2 101 112 113 126 Unfunded loan commitments Level 2 — 7 — 10 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 27 38 28 37 Long-term outstanding power bonds (including current maturities), net Level 2 19,849 26,749 20,124 26,059 Long-term debt of VIEs (including current maturities), net Level 2 1,109 1,437 1,128 1,371 Long-term notes payable (including current maturities) Level 2 — — 23 23 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 VIEs 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 | 9 Months Ended |
Jun. 30, 2020 | |
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 Nine Months Ended 2020 2019 2020 2019 Bellefonte deposit $ — $ — $ — $ 21 Interest income 3 7 14 19 External services 3 3 9 9 Gains (losses) on investments 10 3 4 2 Miscellaneous — 1 — 1 Total Other income (expense), net $ 16 $ 14 $ 27 $ 52 During the nine months ended June 30, 2020, Other income (expense), net decreased $25 million, primarily driven by $21 million of other income in 2019 related to a deposit liability received by TVA as a down payment on the sale of Bellefonte Nuclear Plant ("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. See Note 20 — Contingencies and Legal Proceedings — Legal Proceedings |
Benefit Plans
Benefit Plans | 9 Months Ended |
Jun. 30, 2020 | |
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 nine months ended June 30, 2020 and 2019, were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended June 30 For the Nine Months Ended June 30 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2020 2019 2020 2019 2020 2019 2020 2019 Service cost $ 14 $ 11 $ 4 $ 2 $ 41 $ 33 $ 12 $ 8 Interest cost 104 125 4 5 312 374 12 14 Expected return on plan assets (122) (119) — — (366) (358) — — Amortization of prior service credit (25) (25) (6) (6) (73) (74) (18) (18) Recognized net actuarial loss 109 84 2 1 327 252 7 3 Total net periodic benefit cost as actuarially determined 80 76 4 2 241 227 13 7 Amount (capitalized) / expensed due to actions of regulator (3) — — — (11) 1 — — Total net periodic benefit cost $ 77 $ 76 $ 4 $ 2 $ 230 $ 228 $ 13 $ 7 Note (1) The components of net benefit cost other than the service cost component are included in Other net periodic benefit cost on the Consolidated Statements of Operations. TVA's minimum required pension plan contribution for 2020 is $300 million. TVA contributes $25 million per month to TVARS and as of June 30, 2020, had contributed $225 million. The remaining $75 million will be contributed by September 30, 2020. For the nine months ended June 30, 2020, TVA also contributed $67 million to the 401(k) plan, $19 million (net of $4 million in rebates) to the other post-retirement plans, and $5 million to the SERP. Financial markets have experienced higher volatility since September 30, 2019, due to the COVID-19 pandemic. The uncertainty as to the duration and severity of the COVID-19 pandemic has resulted in significantly lower market valuations for many investments. The impact of these events on TVA’s pension system is reflected in changes in the asset portfolio values from $8.0 billion at September 30, 2019, to $6.8 billion at March 31, 2020, and rebounding to $7.8 billion at June 30, 2020. TVA has not determined at this time whether additional contributions will be made to TVARS during 2020. Additionally, other post-retirement contributions related to the retiree health plans may be higher than previously assumed as a result of the COVID-19 pandemic increasing health care costs, but cannot be estimated at this time. The ultimate impact of the COVID-19 pandemic on the pension plan and other post-retirement plans depends on factors beyond TVA’s knowledge or control, including the duration and severity of this outbreak, actions taken to contain its spread and mitigate its effects, and broader impacts of the COVID-19 pandemic on the country and region’s economy. Therefore, TVA cannot estimate the potential impact to the pension plan and other post-retirement plans at this time. |
Contingencies and Legal Proceed
Contingencies and Legal Proceedings | 9 Months Ended |
Jun. 30, 2020 | |
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 financial protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear incident in the U.S. This financial 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 nuclear power plant licensed to operate. If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies. • Within the Secondary Financial Protection level, the licensee 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 maximum rate currently set at approximately $20 million per year per incident per reactor. Currently, 97 reactors are participating in the Secondary Financial Protection program. In the event that a nuclear incident results in public liability claims, the primary level provided by ANI combined with the Secondary Financial Protection should provide up to approximately $13.8 billion in coverage. Federal law requires that each NRC power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing and decontaminating a reactor and its station site after an accident. TVA carries property, decommissioning liability, and decontamination liability insurance from Nuclear Electric Insurance Limited ("NEIL"). The limits for each site vary depending on the site and range from up to $2.1 billion to $2.8 billion available for a loss at TVA's three sites. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $145 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) with a maximum indemnity of $490 million per unit. This insurance policy may require the payment of retrospective premiums up to a maximum of approximately $43 million, but only to the extent the retrospective premium is deemed necessary by the NEIL Board of Directors to pay losses unable to be covered by NEIL's surplus. 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 — Asset Retirement Obligations . 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 June 30, 2020, $3.2 billion, representing the discounted value of future estimated decommissioning costs, 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. Decommissioning costs studies are updated for each of TVA's nuclear units at least every five years. TVA maintains a NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 15 — Fair Value Measurements — 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. See Note 8 — Regulatory Assets and Liabilities and Note 11 — Asset Retirement Obligations . Non-Nuclear Decommissioning . The estimated future non-nuclear decommissioning ARO was $2.8 billion at June 30, 2020. This decommissioning cost estimate involves estimating the amount and timing of future expenditures and making judgments concerning whether or not such costs are considered a legal obligation. Estimating the amount and timing of future expenditures includes, among other things, making projections of the timing and duration of the asset retirement process and how costs will escalate with inflation. The actual decommissioning costs may vary from the derived estimates because of changes in current assumptions, such as the assumed dates of decommissioning, changes in regulatory requirements, changes in technology, and changes in the cost of labor, materials, and equipment. TVA updates its underlying assumptions for non-nuclear decommissioning AROs at least every five years. However, material changes in underlying assumptions that impact the amount and timing of undiscounted cash flows are continuously monitored and incorporated into ARO balances in the period identified. TVA maintains an ART to help fund the ultimate decommissioning of its non-nuclear power assets. See Note 15 — Fair Value Measurements — Investment Funds . 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. See Note 8 — Regulatory Assets and Liabilities and Note 11 — Asset Retirement Obligations . 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 have 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. 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 $132 million from 2020 to 2024, which include existing controls capital projects and air operations and maintenance projects. TVA also estimates additional expenditures of approximately $1.0 billion from 2020 to 2024 relating to TVA's CCR conversion program, as well as expenditures of approximately $211 million from 2020 to 2024 relating to compliance with Clean Water Act requirements. Future costs could differ from these estimates if new environmental laws or regulations become applicable to TVA or the facilities it operates, or if existing environmental laws or regulations are revised or reinterpreted. There could also be costs that cannot reasonably be predicted at this time, due to uncertainty of actions, that could increase these estimates. Liability for releases and cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and other federal and parallel state statutes. In a manner similar to many other industries and power systems, TVA has generated or used hazardous substances over the years. TVA operations at some facilities have resulted in contamination that TVA is addressing. At both June 30, 2020, and September 30, 2019, 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 $15 million 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; 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 Eastern District referred the parties to mediation. Mediation has concluded, but the parties did not resolve the matter. The litigation will now proceed to the second phase on the question of whether Jacobs's failures did in fact cause the plaintiffs' alleged injuries and damages. On May 13, 2019, an additional group of contractor employees and family members filed suit against Jacobs in the Circuit Court for Roane County, Tennessee. These plaintiffs have raised similar claims to those being litigated in the case referenced above. While TVA is not a party to either of these lawsuits, TVA may potentially have an indemnity obligation to reimburse Jacobs for some amounts that Jacobs is required to pay. TVA will continue monitoring the litigation to determine whether these or similar cases could have broader implications for the utility industry. TVA does not expect any potential liability to have a material adverse impact on its results of operations or financial condition. Legal Proceedings From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting TVA's activities, as a result of a catastrophic event or otherwise. General. At June 30, 2020, TVA had accrued $14 million of probable losses with respect to Legal Proceedings. Of the accrued amount, $13 million is included in Other long-term liabilities and $1 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"). Under the Environmental Agreements, TVA committed to, among other things, take actions regarding coal units that have been completed. TVA also agreed to invest $290 million in certain TVA environmental projects of which TVA had spent approximately $279 million as of June 30, 2020. 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. The liabilities related to the Environmental Agreements are included in Accounts payable and accrued liabilities and Other long-term liabilities on the June 30, 2020, Consolidated Balance Sheets. 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 June 30, 2020, Consolidated Balance Sheets and will be recovered in rates in future periods. Case Involving Kingston Fossil Plant . On May 7, 2019, Roane County and the Cities of Kingston and Harriman ("local governments") filed a lawsuit in the Circuit Court for Roane County, Tennessee, against TVA and Jacobs for monetary damages and unspecified injunctive relief relating to TVA's cleanup response to the 2008 ash spill at Kingston. The local governments allege that TVA and Jacobs failed to take proper measures to mitigate environmental and health risks during the cleanup response and misled the local governments and their citizens about health and environmental risks associated with exposure to coal fly ash. The local governments seek to recover monetary damages on behalf of their citizens for personal injury and property loss claims, damages for lost tax revenue, damages for increased emergency and medical response costs claims, punitive damages, and unspecified injunctive relief. On June 6, 2019, TVA removed the lawsuit to the Eastern District, and TVA and Jacobs filed separate motions to dismiss. Plaintiffs, in response, filed a response opposing both motions and a separate motion seeking leave to file a proposed amended class action complaint in which Roane County would serve as class representative for the municipalities and their citizens. In December 2019, the federal court ruled that the local governments did not have standing to assert representative claims on behalf of their citizens and rejected their motion to proceed as a class action on behalf of their citizens because of the dissimilarity of the injuries allegedly suffered by the local governments (lost tax revenue) and the personal injuries and personal medical expenses allegedly suffered by the individuals. The court indicated, however, that the local governments may have legal standing to assert claims for their direct injuries (claims relating to municipally owned property) and directed the local governments to file an amended pleading in conformance with the court's order by January 16, 2020. The plaintiffs filed their amended complaint on January 15, 2020. On February 26, 2020, TVA and Jacobs moved to dismiss the amended complaint and the court has not yet ruled on this motion. Discovery is ongoing, and trial is set for April 20, 2021. Class Action Lawsuit Involving Kingston Fossil Plant . On November 7, 2019, a resident of Roane County, Tennessee, filed a proposed class action lawsuit against Jacobs and TVA in the Eastern District. The complaint alleges that the class representative and all other members of the proposed class were damaged as a result of the 2008 ash spill at Kingston and the resulting cleanup activities. The complaint alleges, among other things, that (1) TVA was negligent in its construction and operation of the Kingston CCR facility, (2) TVA and Jacobs failed to take proper measures to mitigate environmental and health risks during the cleanup response, and (3) TVA and Jacobs misled the community about health and environmental risks associated with exposure to coal fly ash. The complaint seeks monetary damages and injunctive relief in the form of an order requiring the defendants to establish a blood testing program and medical monitoring protocol and to remediate damage to the properties of the proposed class. On April 22, 2020, TVA moved to dismiss the complaint and the court has not yet ruled on this motion. Case Involving Bull Run Fossil Plant . On February 5, 2020, two plaintiffs who reside near Bull Run filed suit against TVA in the Circuit Court for Anderson County, Tennessee, on behalf of themselves and their two minor children. The plaintiffs allege that they and their children were injured from direct exposures to CCR material originating from Bull Run and from second-hand exposures to coal ash through contact with a family member who worked at an undisclosed TVA facility. TVA removed the case to the Eastern District on March 5, 2020, and the plaintiffs filed an amended complaint in federal court on March 12, 2020. On June 19, 2020, TVA moved to dismiss the amended complaint and the court has not yet ruled on this motion. 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. 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. In accordance with the amended consent decree, TVA submitted to ADEM a Comprehensive Groundwater Investigation Report on May 17, 2019, and an Assessment of Corrective Measures on July 17, 2019. TVA is continuing to develop the groundwater remedy and submit reports to ADEM. 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 ("Northern District"), 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 U.S. 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. On April 29, 2019, the Supreme Court issued its opinion reversing the judgment of the Eleventh Circuit and remanding the case to the Eleventh Circuit. On July 17, 2019, the Eleventh Circuit remanded the case to the district court for further proceedings consistent with the Supreme Court's opinion. Trial is currently scheduled for February 16, 2021. Case Involving Bellefonte Nuclear Plant. On November 30, 2018, Nuclear Development, LLC, filed suit against TVA in the Northern District. 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. On May 15, 2019, the court denied TVA's motion. Discovery is ongoing, and the case is scheduled to be ready for trial by December 2020. Case Involving Rate Changes . On June 9, 2020, a proposed class action lawsuit was filed in federal court in Abingdon, Virginia, by a LPC customer, asserting claims for breach of contract and violation of the Administrative Procedure Act. The lawsuit alleges that the customers of TVA's LPCs are third-party beneficiaries under TVA's wholesale power contracts with its LPCs and that TVA’s rate changes dating back to 2010 violate Section 11 of the TVA Act. Section 11 of the TVA Act establishes the broad policy that TVA power projects shall be considered primarily for the benefit of the people of the Tennessee Valley and that service to industry is a secondary purpose to be used principally to secure a sufficiently high load factor and revenue returns to permit domestic and rural use at the lowest possible rates. The remedies requested include an injunction prohibiting TVA rate changes that violate Section 11, monetary damages, and repayment of rates charged in violation of Section 11. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Redemption of Power Bonds On June 15, 2020, TVA provided notice of its intent to redeem on July 15, 2020, all of its 6.235 percent 1995 Series B Power Bonds (CUSIP number 880591CF7) due July 15, 2045. The bonds, with a principal amount outstanding of $140 million, were redeemed at 100 percent of par value. United States Credit Rating On July 31, 2020, Fitch Ratings affirmed the United States' Long-Term Foreign-Currency, Local-Currency, and Issuer Default Ratings ("credit ratings") at AAA, but revised the ratings outlooks from stable to negative. The change in outlooks on the United States’ credit ratings is expected to result in a similar action by Fitch Ratings on the outlook for TVA’s credit ratings. Federal Contracting and Hiring Practices On August 3, 2020, President Trump issued an "Executive Order ("EO") on Aligning Federal Contracting and Hiring Practices With the Interests of American Workers." Among other things, the EO directs federal agencies to review their contracting and hiring practices and assess negative impacts from the use of temporary foreign labor or offshoring of work. TVA is reviewing this EO and has not yet determined the extent to which this EO may impact TVA’s operations. |
Revenue (Notes)
Revenue (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue 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 for the three and nine months ended June 30, 2020 was 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, wholesale bill credits to LPCs participating in the long-term Partnership Agreement, 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. 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 Revenues During the three and nine months ended June 30, 2020, revenues generated from TVA's electricity sales were $2.2 billion and $7.2 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended June 30 Nine Months Ended June 30 2020 2019 2020 2019 Alabama $ 312 $ 367 $ 1,041 $ 1,146 Georgia 52 59 179 196 Kentucky 140 157 455 498 Mississippi 204 250 668 751 North Carolina 13 15 50 56 Tennessee 1,485 1,705 4,809 5,273 Virginia 9 10 32 35 Subtotal 2,215 2,563 7,234 7,955 Off-system sales 1 2 3 3 Revenue from sales of electricity 2,216 2,565 7,237 7,958 Other revenue 35 39 113 121 Total operating revenues $ 2,251 $ 2,604 $ 7,350 $ 8,079 TVA's operating revenues by customer type for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended June 30 Nine Months Ended June 30 2020 2019 2020 2019 Revenue from sales of electricity Local power companies (1) $ 2,058 $ 2,366 $ 6,716 $ 7,347 Industries directly served 132 168 442 521 Federal agencies and other 26 31 79 90 Revenue from sales of electricity 2,216 2,565 7,237 7,958 Other revenue 35 39 113 121 Total operating revenues $ 2,251 $ 2,604 $ 7,350 $ 8,079 Note (1) The amount for the three and nine months ended June 30, 2020, is net of $38 million and $108 million, respectively, of wholesale bill credits to LPCs participating in the long-term Partnership Agreement. TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. At its August 2019 meeting, the TVA Board approved a 20-year Partnership Agreement option that better aligns the length of LPC contracts with TVA's long-term commitments. These agreements are automatically extended each year after their initial effective date, contingent upon certain circumstances, including agreement on flexibility options and limited rate increases going forward. Participating LPCs will receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. In June 2020, TVA provided participating LPCs a flexibility option that allows them to locally generate up to approximately five percent of average total hourly energy sales over the prior five years in order to meet their individual customers' needs. As of August 3, 2020, 141 LPCs had signed the 20-year Partnership Agreement with TVA, and 42 LPCs had signed a Flexibility Agreement. The number of LPCs with the contract arrangements described below, the revenues derived from such arrangements for the three and nine months ended June 30, 2020, and the percentage of TVA's total operating revenues for the three and nine months ended June 30, 2020 represented by these revenues, are summarized in the tables below: TVA Local Power Company Contracts Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 141 $ 1,630 72.4 % 10-year termination notice 1 1 — % 5-year termination notice 12 427 19.0 % Total 154 $ 2,058 91.4 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two 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). Certain 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 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 141 $ 5,399 73.5 % 10-year termination notice 1 1 — % 5-year termination notice 12 1,316 17.9 % Total 154 $ 6,716 91.4 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in contracts with two 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). Certain 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 20-year termination notice period, respectively. Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues during the nine months ended June 30, 2020. Sales to MLGW and NES each accounted for eight percent of TVA's total operating revenues during the nine months ended June 30, 2019. In May 2020, MLGW published a draft Integrated Resource Plan to guide energy choices in the future, and in July 2020, TVA made a proposal to MLGW that highlights the benefits of remaining a TVA customer. 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 at June 30, 2020. 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. TVA does not have any material contract liabilities at June 30, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Recognition [Line Items] | ||
Reclassification of Amounts on Cash Flow and Statement of Operations [Table Text Block] | Reclassifications Certain historical amounts have been reclassified in the accompanying consolidated financial statements to the current presentation. In the June 30, 2019, Consolidated Statements of Cash Flows, amounts previously reported as $(10) million of Prepayment credits applied to revenue were reclassified to Other, net in cash flows from operating activities. | |
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 (collectively, "Bonds"). Although TVA does not currently receive congressional appropriations, it is required to make annual payments to the U.S. 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. | |
Fiscal Year | Fiscal Year TVA's fiscal year ends September 30. Years (2020, 2019, 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 | |
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, 2019, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K/A for the year ended September 30, 2019 (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 on 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 9 — Variable Interest Entities | |
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, including impacts from the COVID-19 pandemic, 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, 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 on 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 20 — Contingencies and Legal Proceedings — Legal Proceedings — Environmental Agreements . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash At June 30, 2020 At September 30, 2019 Cash and cash equivalents $ 800 $ 299 Restricted cash and cash equivalents included in Other long-term assets 23 23 Total cash, cash equivalents, and restricted cash $ 823 $ 322 | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash At June 30, 2020 At September 30, 2019 Cash and cash equivalents $ 800 $ 299 Restricted cash and cash equivalents included in Other long-term assets 23 23 Total cash, cash equivalents, and restricted cash $ 823 $ 322 |
Revenue Recognition [Table Text Block] | 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. Certain other revenue from activities related to TVA's overall mission are recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net. | |
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, excluding the EnergyRight ® loans receivable. 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. TVA continues to monitor the impact of the COVID-19 pandemic on accounts and loans receivable balances to evaluate the allowance for uncollectible accounts. | |
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 the external depreciation studies. These studies are updated at least every five years. Depreciation expense was $344 million and $536 million for the three months ended June 30, 2020 and 2019, respectively. Depreciation expense was $1.3 billion for both the nine months ended June 30, 2020 and 2019. See Note 5 — Plant Closures | |
Lease Disclosure [Line Items] | ||
Lease Disclosure [Table Text Block] | Leases TVA recognizes a lease asset and lease liability for leases with terms of greater than 12 months. Lease assets represent TVA's right to use an underlying asset for the lease term, and lease liabilities represent TVA's obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. TVA has certain lease agreements that include variable lease payments that are based on energy production levels. These variable lease payments are not included in the measurement of the lease assets or lease liabilities but are recognized in the period in which the expenses are incurred. While not specifically structured as leases, certain power purchase agreements are deemed to contain a lease of the underlying generating units when the terms convey the right to control the use of the assets. Amounts recorded for these leases are generally based on the amount of the scheduled capacity payments due over the remaining terms of the power purchase agreements, the terms of which vary. The total lease obligation included in Accounts payable and accrued liabilities and Operating lease liabilities related to these agreements was $285 million at June 30, 2020. TVA has agreements with lease and non-lease components and has elected to account for the components separately. Consideration is allocated to lease and non-lease components generally based on relative standalone selling prices. TVA has lease agreements which include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in TVA's lease measurements. Leases with an initial term of 12 months or less, which do not include an option to extend the initial term of the lease to greater than 12 months that TVA is reasonably certain to exercise, are not recorded on the Consolidated Balance Sheets at June 30, 2020. Operating leases are recognized on a straight-line basis over the term of the lease agreement. Rent expense associated with short-term leases and variable leases is recorded in Operating and maintenance expense, Fuel expense, or Purchased power expense on the Consolidated Statements of Operations. Expenses associated with finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the related lease asset on the Consolidated Statements of Operations. |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 9 Months Ended |
Jun. 30, 2020 | |
Text Block [Abstract] | |
Consolidation, 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Cash, Cash Equivalents, and Restricted Cash (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Lease Disclosure [Table Text Block] | Leases TVA recognizes a lease asset and lease liability for leases with terms of greater than 12 months. Lease assets represent TVA's right to use an underlying asset for the lease term, and lease liabilities represent TVA's obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. TVA has certain lease agreements that include variable lease payments that are based on energy production levels. These variable lease payments are not included in the measurement of the lease assets or lease liabilities but are recognized in the period in which the expenses are incurred. While not specifically structured as leases, certain power purchase agreements are deemed to contain a lease of the underlying generating units when the terms convey the right to control the use of the assets. Amounts recorded for these leases are generally based on the amount of the scheduled capacity payments due over the remaining terms of the power purchase agreements, the terms of which vary. The total lease obligation included in Accounts payable and accrued liabilities and Operating lease liabilities related to these agreements was $285 million at June 30, 2020. TVA has agreements with lease and non-lease components and has elected to account for the components separately. Consideration is allocated to lease and non-lease components generally based on relative standalone selling prices. TVA has lease agreements which include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in TVA's lease measurements. Leases with an initial term of 12 months or less, which do not include an option to extend the initial term of the lease to greater than 12 months that TVA is reasonably certain to exercise, are not recorded on the Consolidated Balance Sheets at June 30, 2020. Operating leases are recognized on a straight-line basis over the term of the lease agreement. Rent expense associated with short-term leases and variable leases is recorded in Operating and maintenance expense, Fuel expense, or Purchased power expense on the Consolidated Statements of Operations. Expenses associated with finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the related lease asset on the Consolidated Statements of Operations. |
Impact of New Accounting Stan_2
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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 2020: 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, while also refining the definition of a lease. In addition, lessees are required to disclose key information about the amount, timing, and uncertainty of cash flows arising from leasing arrangements. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depend on its classification as a finance lease (formerly referred to as capital lease) or operating lease. The standard requires both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest on the lease liability separate from amortization expense. The accounting rules for the owner of assets leased by the lessee ("lessor accounting") remain relatively unchanged. Effective Date for TVA October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has elected the modified retrospective method of adoption effective October 1, 2019. Under the modified retrospective method of adoption, prior year reported results are not restated. Practical Expedient Description Package of transition practical expedients (for leases commenced prior to adoption date; expedients must be adopted as a package) Do not need to (1) reassess whether any expired or existing contracts are leases or contain leases, (2) reassess the lease classification for any expired or existing leases, or (3) reassess initial direct costs for any existing leases. Short-term lease expedient (elect by class of underlying asset) Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class. Existing and expired land easements not previously accounted for as leases Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment. Comparative reporting requirements for initial adoption Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption, and not apply the new requirements to comparative periods, including disclosures. 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 October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has adopted the standard on a prospective basis. The adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. TVA only uses hedge accounting under its foreign currency swap arrangements, and the adoption of this standard had no impact on those arrangements. 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 October 1, 2019 Effect on the Financial Statements or Other Significant Matters TVA has adopted the standard on a prospective basis. Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. TVA records qualified implementation costs in a cloud arrangement that is a service contract as a prepaid asset and amortizes the prepaid asset to Operating and maintenance expense based on the term of the contract. The following accounting standards have been issued but at June 30, 2020, were not effective and had not been adopted by TVA: 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 plan to adopt the standard early. Effect on the Financial Statements or Other Significant Matters TVA will adopt this standard using the modified retrospective method through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Upon adoption, TVA will recognize an allowance for credit losses based on management's estimate of losses expected to be incurred over the life of certain financial assets. This standard will primarily impact TVA's long-term loans receivable. Adoption of this standard is not expected to have a material impact on TVA's financial condition, results of operations, or cash flows. 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 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 continuing to evaluate the potential impact on related disclosures. Reference Rate Reform Description The guidance provides temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rates. Effective Date for TVA The new standard is effective for adoption at any time between March 12, 2020, and December 31, 2022. TVA currently plans to adopt the standard by December 31, 2022. Effect on the Financial Statements or Other Significant Matters TVA continues to review this standard and evaluate the impact of using an alternative reference rate instead of LIBOR in its interest rate swap contracts. TVA expects the adoption of the standard will simplify the accounting for any modifications to its interest rate swap contracts. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, Net | The table below summarizes the types and amounts of TVA's accounts receivable: Accounts Receivable, Net At June 30, 2020 At September 30, 2019 Power receivables $ 1,286 $ 1,624 Other receivables 78 115 Accounts receivable, net (1) $ 1,364 $ 1,739 Note (1) Allowance for uncollectible accounts was less than $1 million at June 30, 2020, and September 30, 2019, and therefore is not represented in the table above. In response to the COVID-19 pandemic, the TVA Board approved the Public Power Support and Stabilization Program, which includes alternative wholesale payment arrangements for LPCs, on March 25, 2020. TVA is offering up to $1.0 billion of credit support to LPCs that demonstrate the need for temporary financial relief, through the deferral of a portion of LPCs' wholesale power payments owed to TVA. The program, which began in April 2020, requires LPCs to apply monthly and is subject to approval by TVA. If approved, TVA will establish a repayment schedule based on the LPC's need, not to exceed two years, and an initial repayment date will be approved by TVA no later than December 31, 2020. As of August 3, 2020, $1 million of credit support has been approved under the Public Power Support and Stabilization Program. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At June 30, 2020 At September 30, 2019 Materials and supplies inventory $ 784 $ 742 Fuel inventory 307 294 Renewable energy certificates/emission allowance inventory, net 15 16 Allowance for inventory obsolescence (46) (53) Inventories, net $ 1,060 $ 999 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | The table below summarizes the types and amounts of TVA's other long-term assets: Other Long-Term Assets At June 30, 2020 At September 30, 2019 Loans and other long-term receivables, net $ 128 $ 125 EnergyRight ® receivables 73 81 Prepaid long-term service agreements (1) 39 22 Restricted cash and cash equivalents 23 23 Prepaid capacity payments 13 19 Other 63 55 Total other long-term assets $ 339 $ 325 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from External Customer [Line Items] | |
Revenue from External Customers by Products and Services [Table Text Block] | TVA's operating revenues by customer type for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended June 30 Nine Months Ended June 30 2020 2019 2020 2019 Revenue from sales of electricity Local power companies (1) $ 2,058 $ 2,366 $ 6,716 $ 7,347 Industries directly served 132 168 442 521 Federal agencies and other 26 31 79 90 Revenue from sales of electricity 2,216 2,565 7,237 7,958 Other revenue 35 39 113 121 Total operating revenues $ 2,251 $ 2,604 $ 7,350 $ 8,079 Note (1) The amount for the three and nine months ended June 30, 2020, is net of $38 million and $108 million, respectively, of wholesale bill credits to LPCs participating in the long-term Partnership Agreement. |
Regulatory Assets and Liabilities | Components of regulatory assets and regulatory liabilities are summarized in the table below: Regulatory Assets and Liabilities At June 30, 2020 At September 30, 2019 Current regulatory assets Unrealized losses on interest rate derivatives $ 111 $ 89 Unrealized losses on commodity derivatives 38 39 Fuel cost adjustment receivable — 28 Total current regulatory assets 149 156 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 4,524 4,756 Non-nuclear decommissioning costs 2,012 1,741 Nuclear decommissioning costs 963 868 Unrealized losses on interest rate derivatives 1,603 1,241 Unrealized losses on commodity contracts 2 15 Other non-current regulatory assets 147 142 Total non-current regulatory assets 9,251 8,763 Total regulatory assets $ 9,400 $ 8,919 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 121 $ 138 Fuel cost adjustment 71 — Unrealized gains on commodity derivatives 5 12 Total current regulatory liabilities 197 150 Non-current regulatory liabilities Unrealized gains on commodity derivatives 5 — Total regulatory liabilities $ 202 $ 150 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Text Block [Abstract] | |
Schedule of Variable Interest Entities | The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG at June 30, 2020, and September 30, 2019, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At June 30, 2020 At September 30, 2019 Current liabilities Accrued interest $ 24 $ 11 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 40 39 Total current liabilities 67 53 Other liabilities Other long-term liabilities 24 25 Long-term debt, net Long-term debt of variable interest entities, net 1,069 1,089 Total liabilities $ 1,160 $ 1,167 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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 (in millions) At June 30, 2020 At September 30, 2019 Interest rate swap liabilities $ 1,997 $ 1,676 Finance lease liabilities 180 182 Currency swap liabilities 166 193 EnergyRight ® financing obligations 81 90 Paradise pipeline financing obligation 79 80 Accrued long-term service agreements 59 66 Other 186 203 Total other long-term liabilities $ 2,748 $ 2,490 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity (1) Nuclear Non-Nuclear Total Balance at September 30, 2019 $ 3,136 $ 2,480 $ 5,616 Settlements — (85) (85) Revisions in estimate — 387 387 Accretion (recorded as regulatory asset) 106 47 153 Balance at June 30, 2020 $ 3,242 $ 2,829 $ 6,071 Note (1) The current portions of the ARO liability in the amounts of $266 million and $163 million at June 30, 2020, and September 30, 2019, respectively, are included in Accounts payable and accrued liabilities. |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Total debt outstanding at June 30, 2020, and September 30, 2019, consisted of the following: Debt Outstanding (in millions) At June 30, 2020 At September 30, 2019 Short-term debt Short-term debt, net $ 777 $ 922 Current maturities of power bonds issued at par (1) 1,917 1,030 Current maturities of long-term debt of VIEs issued at par 40 39 Current maturities of notes payable — 23 Total current debt outstanding, net 2,734 2,014 Long-term debt Long-term power bonds (2) 18,057 19,225 Long-term debt of VIEs, net 1,069 1,089 Unamortized discounts, premiums, issue costs, and other (125) (131) Total long-term debt, net 19,001 20,183 Total debt outstanding $ 21,735 $ 22,197 Notes (1) Includes net exchange gain from currency transactions of $83 million at June 30, 2020. There were no such amounts at September 30, 2019. |
Debt Securities Activity | The table below summarizes the long-term debt securities activity for the period from October 1, 2019, to June 30, 2020: Debt Securities Activity Date Amount (in millions) Interest Rate Issues (1) 2020 Series A Power Bonds May 2020 $ 1,000 0.75 % Discount on debt issues (3) Total long-term debt issues $ 997 Redemptions/Maturities (2) electronotes ® First Quarter 2020 $ 217 3.33 % electronotes ® Third Quarter 2020 1 2.65 % 2009 Series B December 2019 1 3.77 % 2018 Series A March 2020 1,000 2.25 % 1999 Series A PARRS (TVE) May 2020 23 3.36 % 1998 Series D PARRS (TVC) June 2020 17 3.55 % 2009 Series B June 2020 27 3.77 % Total redemptions/maturities of power bonds 1,286 Notes payable 23 1.64 % Debt of variable interest entities 20 4.32 % Total redemptions/maturities of debt $ 1,329 Notes (1) The 2020 Series A Power Bonds were issued at 99.7 percent of par. (2) All redemptions were at 100 percent of par. |
Risk Management Activities an_2
Risk Management Activities and Derivative Transactions (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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) (in millions) Three Months Ended Nine Months Ended Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2020 2019 2020 2019 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 $ 31 $ (47) $ (56) $ (76) Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2) (1) Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest Expense (in millions) Three Months Ended Nine Months Ended Derivatives in Cash Flow Hedging Relationship 2020 2019 2020 2019 Currency swaps $ 7 $ (13) $ 10 $ (17) Note (1) There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment | Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended June 30 Nine Months Ended June 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2020 2019 2020 2019 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 $ (25) $ (19) $ (69) $ (59) 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 (2) — (1) — 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 were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and nine months ended June 30, 2020 and 2019. |
Fair Value of TVA Derivatives | Fair Values of TVA Derivatives (in millions) At June 30, 2020 At September 30, 2019 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (90) Accounts payable and accrued liabilities $(89); Other long-term liabilities $(1) $ (90) Accounts payable and £250 million Sterling (85) Accounts payable and accrued liabilities $(6); Other long-term liabilities $(79) (61) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(56) £150 million Sterling (89) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(86) (57) 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 $ (1,492) Accounts payable and $ (1,261) Accounts payable and $476 million notional (611) Accounts payable and (498) Accounts payable and $42 million notional (5) Accounts payable and (5) Accounts payable and Commodity contract derivatives (30) Other current assets $5; Other long-term assets $5; Accounts payable and accrued liabilities $(38); Other long-term liabilities $(2) (41) Other current assets $12; Accounts payable and accrued liabilities $(37); Other long-term liabilities $(16) |
Commodity Contract Derivatives | Commodity Contract Derivatives At June 30, 2020 At September 30, 2019 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Coal contract derivatives 6 8 million tons $ (10) 8 9 million tons $ (4) Natural gas contract derivatives 44 355 million mmBtu (20) 65 330 million mmBtu (37) |
Offsetting Assets and Liabilities | The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets at June 30, 2020, and September 30, 2019, are shown in the table below: Derivative Assets and Liabilities (1) (in millions) At June 30, 2020 At September 30, 2019 Assets Commodity derivatives not subject to master netting or similar arrangement $ 10 $ 12 Liabilities Currency swaps (2) $ 264 $ 208 Interest rate swaps (2) 2,108 1,764 Total derivatives subject to master netting or similar arrangement 2,372 1,972 Commodity derivatives not subject to master netting or similar arrangement 40 53 Total liabilities $ 2,412 $ 2,025 Notes (1) Offsetting 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. There were no offsetting amounts on TVA's Consolidated Balance Sheets at either June 30, 2020, or September 30, 2019. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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) (in millions) Three Months Ended Nine Months Ended Fund Financial Statement Presentation 2020 2019 2020 2019 NDT Regulatory asset $ 235 $ (37) $ (11) $ (84) ART Regulatory asset 97 (6) (1) (58) SERP Other income (expense) 7 1 (1) — DCP Other income (expense) 2 1 — (1) |
Fair Value Measurements | Fair Value Measurements At June 30, 2020 (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 470 $ — $ — $ 470 Government debt securities 366 52 — 418 Corporate debt securities — 322 — 322 Mortgage and asset-backed securities — 28 — 28 Institutional mutual funds 173 — — 173 Forward debt securities contracts — 11 — 11 Private credit funds measured at net asset value (1) — — — 57 Private equity funds measured at net asset value (1) — — — 181 Private real asset funds measured at net asset value (1) — — — 162 Commingled funds measured at net asset value (1) — — — 1,169 Total investments 1,009 413 — 2,991 Commodity contract derivatives — 8 2 10 Total $ 1,009 $ 421 $ 2 $ 3,001 Quoted Prices in Active Markets for Identical Liabilities Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 264 $ — $ 264 Interest rate swaps — 2,108 — 2,108 Commodity contract derivatives — 28 12 40 Total $ — $ 2,400 $ 12 $ 2,412 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 on 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 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements At September 30, 2019 (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 464 $ — $ — $ 464 Government debt securities 279 65 — 344 Corporate debt securities — 417 — 417 Mortgage and asset-backed securities — 32 — 32 Institutional mutual funds 250 — — 250 Forward debt securities contracts — 22 — 22 Private equity funds measured at net asset value (1) — — — 140 Private real estate funds measured at net asset value (1) — — — 135 Private credit funds measured at net asset value (1) — — — 33 Commingled funds measured at net asset value (1) — — — 1,131 Total investments 993 536 — 2,968 Commodity contract derivatives — 7 5 12 Total $ 993 $ 543 $ 5 $ 2,980 Quoted Prices in Active Markets for Identical Liabilities Significant Other Significant Total Liabilities Currency swaps (2) $ — $ 208 $ — $ 208 Interest rate swaps — 1,764 — 1,764 Commodity contract derivatives — 44 9 53 Total $ — $ 2,016 $ 9 $ 2,025 Notes |
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 (in millions) Commodity Contract Derivatives Three Months Ended Nine Months Ended Balance at beginning of period $ 38 $ 58 Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (19) (39) Balance at June 30, 2019 $ 19 $ 19 Balance at beginning of period $ (7) $ (4) Settlements (1) (1) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities (2) (5) Balance at June 30, 2020 $ (10) $ (10) |
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 June 30, 2020 Valuation Technique(s) Unobservable Inputs Range (1) Assets Commodity contract derivatives $ 2 Pricing model Coal supply and demand 0.5 - 0.6 billion tons/year Long-term market prices $11.90 - $43.00/ton Liabilities Commodity contract derivatives 12 Pricing model Coal supply and demand 0.5 - 0.6 billion tons/year Long-term market prices $11.90 - $43.00/ton Quantitative Information about Level 3 Fair Value Measurements Fair Value at September 30, 2019 Valuation Technique(s) Unobservable Inputs Range Assets Commodity contract derivatives $ 5 Pricing model Coal supply and demand 0.4 - 0.8 billion tons/year Long-term market prices $12.10 - $94.51/ton Liabilities Commodity contract derivatives 9 Pricing model Coal supply and demand 0.4 - 0.8 billion tons/year Long-term market prices $12.10 - $94.51/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 June 30, 2020, and September 30, 2019, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At June 30, 2020 At September 30, 2019 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables (including current portion) Level 2 $ 91 $ 90 $ 101 $ 100 Loans and other long-term receivables, net (including current portion) Level 2 134 122 131 120 EnergyRight ® financing obligations (including current portion) Level 2 101 112 113 126 Unfunded loan commitments Level 2 — 7 — 10 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 27 38 28 37 Long-term outstanding power bonds (including current maturities), net Level 2 19,849 26,749 20,124 26,059 Long-term debt of VIEs (including current maturities), net Level 2 1,109 1,437 1,128 1,371 Long-term notes payable (including current maturities) Level 2 — — 23 23 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | 17. 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 Nine Months Ended 2020 2019 2020 2019 Bellefonte deposit $ — $ — $ — $ 21 Interest income 3 7 14 19 External services 3 3 9 9 Gains (losses) on investments 10 3 4 2 Miscellaneous — 1 — 1 Total Other income (expense), net $ 16 $ 14 $ 27 $ 52 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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 nine months ended June 30, 2020 and 2019, were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended June 30 For the Nine Months Ended June 30 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2020 2019 2020 2019 2020 2019 2020 2019 Service cost $ 14 $ 11 $ 4 $ 2 $ 41 $ 33 $ 12 $ 8 Interest cost 104 125 4 5 312 374 12 14 Expected return on plan assets (122) (119) — — (366) (358) — — Amortization of prior service credit (25) (25) (6) (6) (73) (74) (18) (18) Recognized net actuarial loss 109 84 2 1 327 252 7 3 Total net periodic benefit cost as actuarially determined 80 76 4 2 241 227 13 7 Amount (capitalized) / expensed due to actions of regulator (3) — — — (11) 1 — — Total net periodic benefit cost $ 77 $ 76 $ 4 $ 2 $ 230 $ 228 $ 13 $ 7 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
State [Table Text Block] | TVA's operating revenues by state for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended June 30 Nine Months Ended June 30 2020 2019 2020 2019 Alabama $ 312 $ 367 $ 1,041 $ 1,146 Georgia 52 59 179 196 Kentucky 140 157 455 498 Mississippi 204 250 668 751 North Carolina 13 15 50 56 Tennessee 1,485 1,705 4,809 5,273 Virginia 9 10 32 35 Subtotal 2,215 2,563 7,234 7,955 Off-system sales 1 2 3 3 Revenue from sales of electricity 2,216 2,565 7,237 7,958 Other revenue 35 39 113 121 Total operating revenues $ 2,251 $ 2,604 $ 7,350 $ 8,079 |
Revenue from External Customers by Products and Services [Table Text Block] | TVA's operating revenues by customer type for the three and nine months ended June 30, 2020 and 2019, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended June 30 Nine Months Ended June 30 2020 2019 2020 2019 Revenue from sales of electricity Local power companies (1) $ 2,058 $ 2,366 $ 6,716 $ 7,347 Industries directly served 132 168 442 521 Federal agencies and other 26 31 79 90 Revenue from sales of electricity 2,216 2,565 7,237 7,958 Other revenue 35 39 113 121 Total operating revenues $ 2,251 $ 2,604 $ 7,350 $ 8,079 Note (1) The amount for the three and nine months ended June 30, 2020, is net of $38 million and $108 million, respectively, of wholesale bill credits to LPCs participating in the long-term Partnership Agreement. |
Revenue Local Power Company Con
Revenue Local Power Company Contracts (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
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 nine months ended June 30, 2020, and the percentage of TVA's total operating revenues for the three and nine months ended June 30, 2020 represented by these revenues, are summarized in the tables below: TVA Local Power Company Contracts Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 141 $ 1,630 72.4 % 10-year termination notice 1 1 — % 5-year termination notice 12 427 19.0 % Total 154 $ 2,058 91.4 % Note |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies General and Basis of Presentation (Details) People in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2020USD ($)People | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)People | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Reclassification of Amounts on Cash Flow and Statement of Operations [Line Items] | |||||||
Cash and Cash Equivalents, at Carrying Value | $ 800 | $ 800 | $ 299 | ||||
Restricted Cash and Cash Equivalents | 23 | 23 | 23 | ||||
Regulatory Assets | 9,400 | 9,400 | 8,919 | ||||
Other Deferred Costs, Net | (10) | (10) | |||||
Appropriation-investment power program | 1,000 | ||||||
Financing Receivable, after Allowance for Credit Loss | $ 122 | $ 122 | 120 | ||||
Population of TVA's service area | People | 10 | 10 | |||||
Allowance for uncollectible accounts | $ 1 | $ 1 | 1 | ||||
Depreciation expense | 344 | $ 536 | 1,300 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 823 | $ 323 | 823 | $ 323 | $ 322 | $ 322 | |
Cash and Cash Equivalents, Period Increase (Decrease) | $ 500 | $ 501 | $ 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Defined Benefit Plan, Other Cost (Credit) | $ 63 | $ 65 | $ 190 | $ 194 | |
Financing Receivable, after Allowance for Credit Loss | 122 | 122 | $ 120 | ||
Other Deferred Costs, Net | 10 | 10 | |||
Carrying Value | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, after Allowance for Credit Loss | $ 134 | $ 134 | $ 131 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Leases (Details) $ in Millions | Jun. 30, 2020USD ($) |
Lease obligation related to Purchased Power [Line Items] | |
Lease Obligation Related to Purchased Power Agreements | $ 285 |
Impact of New Accounting Stan_3
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2020 | Oct. 01, 2019 | Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |||
Restricted cash | $ 13 | ||
Reclassification from Operating and maintenance expense to Other income | $ 193 | ||
Operating Lease, Asset | $ 205 | ||
Operating Lease, Liability | $ 210 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Accounts Receivable, Net | ||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,286 | $ 1,624 |
Other receivables | 78 | 115 |
Allowance for uncollectible accounts | 1 | 1 |
Accounts receivable, net | 1,364 | $ 1,739 |
Total available Credit on the Public Power Support and Stabilization Program | $ 1,000 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Inventories, Net | ||
Materials and supplies inventory | $ 784 | $ 742 |
Fuel inventory | 307 | 294 |
Renewable energy certificates/emission allowance inventory, net | 15 | 16 |
Allowance for inventory obsolescence | (46) | (53) |
Inventories, net | $ 1,060 | $ 999 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Other Long-Term Assets | ||
EnergyRight® receivables | $ 90 | $ 100 |
Prepaid Expense, Noncurrent | 39 | 22 |
Restricted Cash and Cash Equivalents | 23 | 23 |
Total other long-term assets | 339 | 325 |
Prepaid Expense, Current | 4 | 5 |
Accounts Receivable [Member] | ||
Other Long-Term Assets | ||
EnergyRight® receivables | 18 | 20 |
Other long-term assets | ||
Other Long-Term Assets | ||
Loans and other long-term receivables, net | 128 | 125 |
EnergyRight® receivables | 73 | 81 |
Prepaid capacity payments | 13 | 19 |
Other | $ 63 | $ 55 |
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 | Jun. 30, 2020 | Sep. 30, 2019 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 149 | $ 156 |
Non-current regulatory assets | 9,251 | 8,763 |
Regulatory assets | 9,400 | 8,919 |
Current regulatory liabilities | 197 | 150 |
Regulatory Liability, Noncurrent | 5 | 0 |
Regulatory Liabilities | 202 | 150 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 121 | 138 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 71 | 0 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 0 | |
Current regulatory liabilities | 5 | 12 |
Regulatory Liability, Noncurrent | 5 | |
Non-nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 111 | 89 |
Non-current regulatory assets | 1,603 | 1,241 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 38 | 39 |
Non-current regulatory assets | 2 | 15 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 0 | 28 |
Deferred pension costs and other post-retirement benefits costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 4,524 | 4,756 |
Nuclear decommissioning costs | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 963 | 868 |
Environmental agreements | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 2,012 | 1,741 |
Other non-current regulatory assets | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 147 | $ 142 |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2013 | Sep. 30, 2012 | |
Variable Interest Entities | |||||||
Other long-term liabilities | $ 2,748 | $ 2,748 | $ 2,490 | ||||
Liabilities | 39,204 | 39,204 | 38,842 | ||||
Accrued interest | 24 | 24 | 11 | ||||
VIE Financing | |||||||
Face amount | $ 40 | $ 40 | $ 360 | ||||
Financial instruments subject to mandatory redemption, interest rate, stated percentage | 7.00% | 7.00% | |||||
Liabilities | |||||||
Current maturities of long-term debt of variable interest entities | $ 40 | $ 40 | 39 | ||||
Long-term debt of variable interest entities, net | 1,069 | 1,069 | 1,089 | ||||
Liabilities, Current | 5,443 | 5,443 | 4,312 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Variable Interest Entities | |||||||
Other long-term liabilities | 24 | 24 | 25 | ||||
Liabilities | 1,160 | 1,160 | 1,167 | $ 1,000 | |||
Liabilities | |||||||
Liabilities, Current | 67 | 67 | 53 | ||||
Interest Expense | 13 | $ 14 | 41 | $ 42 | |||
Accounts Payable and Accrued Liabilities | $ 3 | $ 3 | $ 3 | ||||
JSCCG | |||||||
VIE Financing | |||||||
Face amount | 900 | ||||||
Holdco | |||||||
VIE Financing | |||||||
Face amount | $ 100 | ||||||
SCCG | |||||||
VIE Financing | |||||||
Debt and Lease Obligation | $ 400 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2020 | Sep. 30, 2019 | ||
Other Long-Term Liabilities | |||
Finance Lease, Liability | $ 180 | $ 182 | |
Pipeline financing obligation | 79 | 80 | |
Interest rate swap liabilities | 2,108 | 1,764 | |
Capital lease obligations | 46 | 223 | |
Currency swap liabilities | [1] | 264 | 208 |
EnergyRight® financing obligation | (112) | (126) | |
Total other long-term liabilities | 2,748 | 2,490 | |
Regulatory Liability, Noncurrent | 5 | 0 | |
Increase (Decrease) in Derivative Liabilities | 344 | ||
Accounts payable and accrued liabilities | |||
Other Long-Term Liabilities | |||
Finance Lease, Liability | 1 | ||
Obligations under long-term service agreements | (11) | (12) | |
Interest rate swap liabilities | 111 | 88 | |
EnergyRight® financing obligation | (20) | (23) | |
Other long-term liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | (59) | (66) | |
Interest rate swap liabilities | 1,997 | 1,676 | |
Currency swap liabilities | 166 | 193 | |
EnergyRight® financing obligation | (81) | (90) | |
Other | $ 186 | $ 203 | |
[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 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | |
Asset Retirement Obligations | |||
Asset Retirement Obligation, Period Increase (Decrease) | $ 455,000,000 | ||
Amortization and Depreciation of Decontaminating and Decommissioning Assets | 127,000,000 | ||
Balance at September 30, 2019 | 5,616,000,000 | ||
Settlements | (85,000,000) | ||
Asset Retirement Obligation, Revision of Estimate | 387,000,000 | ||
Accretion (recorded as regulatory asset) | 153,000,000 | ||
Balance at June 30, 2020 | $ 6,071,000,000 | 6,071,000,000 | |
Non-nuclear Operating | |||
Asset Retirement Obligations | |||
Asset Retirement Obligation, Revision of Estimate | 38,000,000 | ||
Nuclear | |||
Asset Retirement Obligations | |||
Balance at September 30, 2019 | 3,136,000,000 | ||
Settlements | 0 | ||
Asset Retirement Obligation, Revision of Estimate | 0 | ||
Accretion (recorded as regulatory asset) | 106,000,000 | ||
Balance at June 30, 2020 | 3,242,000,000 | 3,242,000,000 | |
Non-nuclear | |||
Asset Retirement Obligations | |||
Balance at September 30, 2019 | 2,480,000,000 | ||
Settlements | (85,000,000) | ||
Asset Retirement Obligation, Revision of Estimate | 387,000,000 | ||
Accretion (recorded as regulatory asset) | 47,000,000 | ||
Balance at June 30, 2020 | 2,829,000,000 | 2,829,000,000 | |
Asset Retirement Obligation, Revision of Estimate | 129,000,000 | ||
Non-nuclear Closed Activities | |||
Asset Retirement Obligations | |||
Asset Retirement Obligation, Revision of Estimate | 91,000,000 | ||
Allen Fossil Plant [Member] | |||
Asset Retirement Obligations | |||
Asset Retirement Obligation, Revision of Estimate | 267 | ||
Accounts payable and accrued liabilities | |||
Asset Retirement Obligations | |||
Current portion of ARO | $ (266,000,000) | $ (266,000,000) | $ (163,000,000) |
Debt and Other Obligations Debt
Debt and Other Obligations Debt Outstanding (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Short-term debt | ||
Short-term debt, net | $ 777 | $ 922 |
Current maturities of power bonds | 1,917 | 1,030 |
Current maturities of long-term debt of variable interest entities | 40 | 39 |
Current maturities of notes payable | 0 | 23 |
Total current debt outstanding, net | 2,734 | 2,014 |
Long-term debt | ||
Long-term power bonds | 18,057 | 19,225 |
Unamortized discounts, premiums, issues costs, and other | 125 | 131 |
Total long-term debt, net | 19,001 | 20,183 |
Total outstanding debt | 21,735 | 22,197 |
Long-term debt of variable interest entities, net | 1,069 | 1,089 |
Net exchange gain from currency transaction, current | 83 | |
Net exchange gain from currency transaction, noncurrent | 101 | $ 191 |
Change in long-term debt | $ 1,900 |
Debt and Other Obligations De_2
Debt and Other Obligations Debt Securities Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Debt Instrument | |||||||||
Total long-term debt, net | $ 19,001 | $ 19,001 | $ 20,183 | ||||||
Redemptions and repurchases of power bonds | $ 1,286 | [1] | $ 1,034 | ||||||
Variable Interest Entity, Financial or Other Support, Type | 20 | ||||||||
Total redemptions/maturities of debt | [1] | $ (1,329) | |||||||
Proceeds from Issuance of Debt | 997 | 0 | |||||||
Debt Instrument, Unamortized Discount | (3) | (3) | |||||||
Repayments of Notes Payable | 23 | $ 46 | |||||||
2020 Series A | |||||||||
Debt Instrument | |||||||||
Proceeds from Issuance of Debt | 1,000 | ||||||||
electronotes [Member] | |||||||||
Debt Instrument | |||||||||
Redemptions and repurchases of power bonds | 1 | $ 217 | |||||||
2009 Series B [Member] | |||||||||
Debt Instrument | |||||||||
Redemptions and repurchases of power bonds | $ 27 | $ 1,000 | $ 1 | ||||||
Debt of variable interest entities [Member] | |||||||||
Debt Instrument | |||||||||
Other Debt instrument, Interest Rate, Effective Percentage | 4.32% | ||||||||
1998 Series D | |||||||||
Debt Instrument | |||||||||
Redemptions and repurchases of power bonds | 17 | ||||||||
1999 Series A Member | |||||||||
Debt Instrument | |||||||||
Redemptions and repurchases of power bonds | $ 23 | ||||||||
2020 Series A | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 0.75% | 0.75% | |||||||
electronotes [Member] | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 2.65% | 3.33% | 2.65% | ||||||
1998 Series D | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.55% | 3.55% | |||||||
1999 Series A Member | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.36% | 3.36% | |||||||
2009 Series B [Member] | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.77% | 2.25% | 3.77% | 3.77% | |||||
Notes Payable [Member] | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.64% | 1.64% | |||||||
[1] | (1) The 2020 Series A Power Bonds were issued at 99.7 percent of par. (2) All redemptions were at 100 percent of par. |
Debt and Other Obligations Cred
Debt and Other Obligations Credit Facility Agreements (Details) $ in Millions | 9 Months Ended | |
Jun. 30, 2020USD ($)Credit_facilities | Sep. 30, 2019USD ($) | |
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 June 30, 2020 (in millions) Facility Limit Letters of Credit Outstanding Cash Borrowings Availability Maturity Date December 2021 $ 150 $ 38 $ — $ 112 June 2023 1,000 522 — 478 September 2023 1,000 450 — 550 February 2025 500 500 — — Total $ 2,650 $ 1,510 $ — $ 1,140 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | $ 150 | |
Revolving Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | $ 2,650 | |
Number of revolving credit facilities | Credit_facilities | 4 | |
December 2019 Credit Facility | $ 150 | |
February 2022 Credit Facility | 1,000 | |
June 2020 Credit Facility | 500 | |
September 2020 Credit Facility | 1,000 | |
Cash Borrowings-December 2019 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 | 478 | |
Remaining Availability, June 2020 Credit Facility | 550 | |
Remaining Availability, September 2020 Credit Facility | 0 | |
Total Remaining Availability for Credit Facilities | 1,140 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of Credit Outstanding, Amount 1 | 500 | |
Letter of Credit Outstanding, December 2019 Credit Facility | 38 | |
Letter of Credit Outstanding, February 2022 Credit Facility | 450 | |
Letter of Credit Outstanding, September 2020 Credit Facility | 522 | |
Amount of letters of credit outstanding for credit facilities | $ 1,510 | $ 1,300 |
Debt and Other Obligations Leas
Debt and Other Obligations Lease/Leaseback Obligations (Details) $ in Millions | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Sale Leaseback Transaction [Line Items] | ||
CT and QTE outstanding leaseback obligation | $ 223 | $ 263 |
Leasing transaction, number of units | 24 | |
CT and QTE outstanding leaseback obligation | $ 223 | $ 263 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | [1] | Jun. 30, 2020 | Jun. 30, 2019 | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||||
Other Comprehensive Income (Gain), Reclassification Adjustment from AOCI | $ 10 | $ (17) | |||||
Reclassification to earnings from cash flow hedges | $ (7) | $ 13 | $ (10) | [1] | $ 17 | [1] | |
[1] | There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
Risk Management Activities an_3
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | |||||||
Net unrealized gain (loss) on cash flow hedges | $ 31 | $ (47) | $ (56) | $ (76) | |||
Reclassification to earnings from cash flow hedges | $ (7) | $ 13 | [1] | (10) | [1] | $ 17 | [1] |
Reclassification to earnings from cash flow hedges in the next 12 months | $ (30) | ||||||
[1] | There were no amounts excluded from effectiveness testing for any of the periods presented. Based on forecasted foreign currency exchange rates, TVA expects to reclassify approximately $30 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
Risk Management Activities an_4
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2020USD ($)Years | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Years | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | ||||
Derivative | ||||||||
Amount recognized for unrealized gains (losses) | $ 0 | |||||||
Change in Unrealized gains (losses) on Interest Rate Derivatives | $ (15,000,000) | $ 159,000,000 | (370,000,000) | $ (369,000,000) | ||||
Interest Rate Swap | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | (25,000,000) | (19,000,000) | [1] | (69,000,000) | [1] | (59,000,000) | [1] | |
Fair value | (611,000,000) | (611,000,000) | $ (498,000,000) | |||||
Commodity Contract Derivatives | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | (2,000,000) | $ 0 | (1,000,000) | [1] | $ 0 | [1] | ||
Fair value | $ (30,000,000) | $ (30,000,000) | $ (41,000,000) | |||||
Coal Contract Derivatives | ||||||||
Derivative | ||||||||
Number of contracts | 6 | 6 | 8 | |||||
Derivative, Nonmonetary Notional Amount | 8,000,000 | 8,000,000 | 9,000,000 | |||||
Fair value | $ (10,000,000) | $ (10,000,000) | $ (4,000,000) | |||||
Natural gas contract derivatives | ||||||||
Derivative | ||||||||
Number of contracts | 44 | 44 | 65 | |||||
Derivative, Nonmonetary Notional Amount | 355,000,000 | 355,000,000 | 330,000,000 | |||||
Fair value | $ (20,000,000) | $ (20,000,000) | $ (37,000,000) | |||||
Number Commodity Contract Term Years | Years | 4 | 4 | ||||||
Coal [Member] | ||||||||
Derivative | ||||||||
Number Commodity Contract Term Years | Years | 2 | 2 | ||||||
[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 were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and nine months ended June 30, 2020 and 2019. |
Risk Management Activities an_5
Risk Management Activities and Derivative Transactions Fair Values of TVA Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Derivatives, Fair Value | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Gross amounts of recognized liabilities | 2,372 | 1,972 |
200 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (90) | (90) |
Gross amounts of recognized liabilities | 264 | 208 |
200 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1) | (84) |
200 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (89) | (6) |
250 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (85) | (61) |
250 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (79) | (56) |
250 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (6) | (5) |
150 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (89) | (57) |
150 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (86) | (53) |
150 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (3) | (4) |
$1.0 billion notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (1,492) | (1,261) |
$1.0 billion notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1,415) | (1,199) |
$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (77) | (62) |
$476 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (611) | (498) |
$476 million notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (579) | (474) |
$476 million notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (32) | (24) |
$42 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (5) | (5) |
$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) | (2) |
Commodity contract derivatives | ||
Derivatives, Fair Value | ||
Fair value | (30) | (41) |
Commodity contract derivatives | Other long-term assets | ||
Derivatives, Fair Value | ||
Fair value | 5 | 0 |
Commodity contract derivatives | Other current assets | ||
Derivatives, Fair Value | ||
Fair value | 5 | 12 |
Commodity contract derivatives | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (2) | (16) |
Commodity contract derivatives | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (38) | (37) |
Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Risk Management Activities an_6
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) $ in Millions | 9 Months Ended | |
Jun. 30, 2020USD ($)Bond_issues | Sep. 30, 2019Bond_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) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Coal Contract | ||
Derivative | ||
Fair value | (10) | (4) |
Natural Gas Contract Derivatives | ||
Derivative | ||
Fair value | (20) | (37) |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Risk Management Activities an_8
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Offsetting Assets [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | $ 2,412 | $ 2,025 |
Gross amounts of recognized liabilities | 2,372 | 1,972 |
Total derivatives not subject to master netting or similar arrangement | 10 | 12 |
Forward Contract Derivative Asset, at Fair Value | 11 | 22 |
Derivative Liability, Not Subject to Master Netting Arrangement | 40 | 53 |
Letter of Credit | ||
Offsetting Assets [Line Items] | ||
Amount of letters of credit outstanding for credit facilities | 1,510 | 1,300 |
Currency Swap | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 264 | 208 |
Interest Rate Contract | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 2,108 | 1,764 |
Fair Value, Inputs, Level 2 | ||
Offsetting Assets [Line Items] | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Risk Management Activities an_9
Risk Management Activities and Derivative Transactions Offsetting for Derivative Liabilities (Details) $ in Millions | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($)Bond_issues |
Offsetting Liabilities [Line Items] | ||
Number of currency swaps outstanding | Bond_issues | 3 | |
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,286 | $ 1,624 |
Total derivatives not subject to master netting or similar arrangement | 10 | 12 |
Gross amounts of recognized liabilities | 2,372 | 1,972 |
Derivative Liability, Not Subject to Master Netting Arrangement | 40 | 53 |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 2,412 | 2,025 |
Forward Contract Derivative Asset, at Fair Value | 11 | 22 |
Currency Swap | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts of recognized liabilities | 264 | 208 |
Interest Rate Contract | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts of recognized liabilities | 2,108 | 1,764 |
Letter of Credit | ||
Offsetting Liabilities [Line Items] | ||
Amount of letters of credit outstanding | 1,510 | 1,300 |
Fair Value, Inputs, Level 2 | ||
Offsetting Liabilities [Line Items] | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Risk Management Activities a_10
Risk Management Activities and Derivative Transactions Collateral (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Likely cash collateral obligation increase | 22 | |
Collateralized Securities [Member] | ||
Derivative | ||
Derivative, Net Liability Position, Aggregate Fair Value | 2,400 | |
Derivative, Collateral, Right to Reclaim Cash | 1,500 | |
Letter of Credit | ||
Derivative | ||
Amount of letters of credit outstanding | 1,510 | 1,300 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 11 | $ 22 |
Risk Management Activities a_11
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($)megawatts | Jun. 30, 2020USD ($)megawatts | Jun. 30, 2019 | Sep. 30, 2019USD ($) | |
Derivative | ||||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,286 | $ 1,286 | $ 1,624 | |
Total derivatives not subject to master netting or similar arrangement | $ 10 | $ 10 | $ 12 | |
Two Largest Customer Percentage of Total Operating Revenue | 1800.00% | 1700.00% | 1600.00% | |
Moody's, A1 Rating [Member] | ||||
Derivative | ||||
Banking Counterparties Credit Rating | A3 | |||
Natural Gas Banking Counterparties Credit Rating | A2 | |||
Moody's, B1 Rating [Member] | ||||
Derivative | ||||
Coal Banking Counterparties Credit Rating | B1 | |||
Moody's, Ba1 Rating [Member] | ||||
Derivative | ||||
Coal Banking Counterparties Credit Rating | Ba1 | |||
Moody's, Caa1 Rating [Member] | ||||
Derivative | ||||
Natural Gas Banking Counterparties Credit Rating | Caa2 | |||
Long-term Contract for Purchase of Electric Power [Domain] | ||||
Derivative | ||||
Megawatts | megawatts | 440 | 440 |
Risk Management Activities a_12
Risk Management Activities and Derivative Transactions Cash Flow from Hedging (Details) $ in Millions | Jun. 30, 2020USD ($) |
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 | 9 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Investment Gains (Losses) | |||||
Financing Receivable, after Allowance for Credit Loss | $ 122 | $ 122 | $ 120 | ||
Balance in NDT | $ 2,100 | $ 2,100 | |||
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 | |||
Investment funds | $ 2,991 | $ 2,991 | $ 2,968 | ||
LTDCP [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (2) | $ (1) | 0 | $ 1 | |
SERP | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (7) | (1) | 1 | 0 | |
ART [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (97) | 6 | 1 | 58 | |
NDT [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (235) | $ 37 | (11) | $ 84 | |
Equity Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 216 | 216 | |||
Real Estate Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 58 | 58 | |||
Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 20 | 20 | |||
Private Equity Funds [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 133 | 133 | |||
Private real estate funds [Member] | |||||
Investment Gains (Losses) | |||||
Fair value plan assets gross | 50 | 50 | |||
Private Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | $ 10 | $ 10 |
Fair Value Measurements Fair _2
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Jun. 30, 2020USD ($) |
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 | Jun. 30, 2020 | Sep. 30, 2019 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financing Receivable, after Allowance for Credit Loss | $ 122 | $ 120 | ||
Investments | ||||
Equity securities | 470 | 464 | ||
Government debt securities | 418 | 344 | ||
Corporate debt securities | 322 | 417 | ||
Mortgage and asset-backed securities | 28 | 32 | ||
Institutional mutual funds | 173 | 250 | ||
Forward debt securities contracts | 11 | 22 | ||
Private credit measured at net asset value | 57 | 33 | ||
Private equity funds measured at net asset value(1) | 181 | 140 | [1] | |
Private real estate funds measured at net asset value(1) | 162 | 135 | [1] | |
Commingled funds measured at net asset value(1) | 1,169 | 1,131 | [1] | |
Total investments | 2,991 | 2,968 | ||
Commodity contract derivatives | 10 | 12 | ||
Total | 3,001 | 2,980 | ||
Liabilities | ||||
Currency swaps | [2] | 264 | 208 | |
Interest rate swaps | 2,108 | 1,764 | ||
Commodity contract derivatives | 40 | 53 | ||
Total | 2,412 | 2,025 | ||
Decommissioning Fund Investments | 777 | |||
Balance in NDT | 2,100 | |||
Increase (Decrease) Nuclear Decommissioning Trust, Fair Value | 17 | |||
Fair Value, Inputs, Level 1 | ||||
Investments | ||||
Equity securities | 470 | 464 | ||
Government debt securities | 366 | 279 | ||
Corporate debt securities | 0 | 0 | ||
Mortgage and asset-backed securities | 0 | 0 | ||
Institutional mutual funds | 173 | 250 | ||
Forward debt securities contracts | 0 | 0 | ||
Private credit measured at net asset value | 0 | 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 | 1,009 | 993 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 1,009 | 993 | ||
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 | 52 | 65 | ||
Corporate debt securities | 322 | 417 | ||
Mortgage and asset-backed securities | 28 | 32 | ||
Institutional mutual funds | 0 | 0 | ||
Forward debt securities contracts | 11 | 22 | ||
Private credit measured at net asset value | 0 | 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 | 413 | 536 | ||
Commodity contract derivatives | 8 | 7 | ||
Total | 421 | 543 | ||
Liabilities | ||||
Currency swaps | 264 | 208 | [2] | |
Interest rate swaps | 2,108 | 1,764 | ||
Commodity contract derivatives | 28 | 44 | ||
Total | 2,400 | 2,016 | ||
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 | 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 | 2 | 5 | ||
Total | 2 | 5 | ||
Liabilities | ||||
Currency swaps | 0 | 0 | [2] | |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 12 | 9 | ||
Total | $ 12 | $ 9 | ||
[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 on 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 — Risk Management Activities and Derivative Transactions — 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 | 9 Months Ended | ||||||
Jun. 30, 2020USD ($)tons-per-year | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)tons-per-year | Jun. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)tons-per-year | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Commodity contract derivatives | $ 10,000,000 | $ 10,000,000 | $ 12,000,000 | |||||
Commodity contract derivatives | 40,000,000 | 40,000,000 | $ 53,000,000 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements | $ (1,000,000) | $ (1,000,000) | ||||||
Maximum | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair value measurements tons per year | tons-per-year | 0.6 | 0.6 | 0.8 | |||||
Price per ton | $ 43 | $ 43 | $ 94.51 | |||||
Minimum | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair value measurements tons per year | tons-per-year | 0.5 | 0.5 | 0.4 | |||||
Price per ton | $ 11.90 | $ 11.90 | $ 12.10 | |||||
Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Commodity contract derivatives | 2,000,000 | 2,000,000 | 5,000,000 | |||||
Commodity contract derivatives | 12,000,000 | 12,000,000 | 9,000,000 | |||||
Commodity Contract Derivatives | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Balance | (10,000,000) | $ 19,000,000 | (10,000,000) | $ 19,000,000 | $ (7,000,000) | $ (4,000,000) | $ 38,000,000 | $ 58,000,000 |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | $ (2,000,000) | $ (19,000,000) | $ (5,000,000) | $ (39,000,000) |
Fair Value Measurements Estimat
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) | Jun. 30, 2020 | Sep. 30, 2019 |
Carrying Value | ||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables (including current portion) | $ 91,000,000 | $ 101,000,000 |
Loans and other long-term receivables, net (including current portion) | 134,000,000 | 131,000,000 |
EnergyRight® financing obligations (including current portion) | 101,000,000 | 113,000,000 |
Unfunded loan commitments | 0 | 0 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 27,000,000 | 28,000,000 |
Long-term outstanding power bonds (including current maturities), net | 19,849,000,000 | 20,124,000,000 |
Long-term debt of VIEs (including current maturities), net | 1,109,000,000 | 1,128,000,000 |
Long-term notes payable (including current maturities) | 0 | 23,000,000 |
EnergyRight® receivables (including current portion) | 90,000,000 | 100,000,000 |
Loans and other long-term receivables, net (including current portion) | 122,000,000 | 120,000,000 |
EnergyRight® financing obligations (including current portion) | 112,000,000 | 126,000,000 |
Unfunded loan commitments | 7,000,000 | 10,000,000 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 38,000,000 | 37,000,000 |
Long-term outstanding power bonds (including current maturities), net | 26,749,000,000 | 26,059,000,000 |
Long-term debt of VIEs (including current maturities), net | 1,437,000,000 | 1,371,000,000 |
Long-term notes payable (including current maturities) | $ 0 | $ 23,000,000 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income (Expense), Net | ||||
Deposit Liabilities, Description | — | — | — | |
External services | $ 3 | $ 3 | $ 9 | $ 9 |
Interest income | 3 | 7 | 14 | 19 |
Gains (losses) on investments | 10 | 3 | 4 | 2 |
Miscellaneous | 0 | 1 | 0 | 1 |
Total other income (expense), net | 16 | $ 14 | 27 | 52 |
Increase in Other Income/Expense | 2 | $ 25 | ||
Increase in Gains (Losses) | 21 | |||
Bellefont deposit revenue | $ 21 | |||
Increase (Decrease) in Gains (Losses) on Investments | 7 | |||
Increase (Decrease) Interest Income, Nonoperating, Net | $ 4 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)plans | Jun. 30, 2019USD ($) | |
Retirement Plan Disclosure | ||||
Number of unfunded post-retirement health care plans | plans | 2 | |||
Pension Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 14 | $ 11 | $ 41 | $ 33 |
Interest cost | 104 | 125 | 312 | 374 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (122) | 119 | (366) | 358 |
Amortization of prior service cost | (25) | (25) | (73) | (74) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 109 | (84) | 327 | (252) |
Net periodic benefit cost as acutarially determined | 80 | 76 | 241 | 227 |
Amount capitalized due to actions of regulator | 3 | 0 | 11 | 1 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 77 | 76 | 230 | 228 |
Other Postretirement Benefit Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | 4 | 2 | 12 | 8 |
Interest cost | 4 | 5 | 12 | 14 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 0 | 0 | 0 | |
Amortization of prior service cost | (6) | (6) | (18) | (18) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 2 | (1) | 7 | (3) |
Net periodic benefit cost as acutarially determined | 4 | 2 | 13 | 7 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 4 | $ 2 | $ 13 | $ 7 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 225 | |||
Pension Benefits | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 14 | $ 11 | 41 | $ 33 |
Interest cost | 104 | 125 | 312 | 374 |
Expected return on plan assets | 122 | (119) | 366 | (358) |
Amortization of prior service cost | (25) | (25) | (73) | (74) |
Recognized net actuarial loss | (109) | 84 | (327) | 252 |
Total net periodic benefit cost as actuarially determined | 80 | 76 | 241 | 227 |
Amount capitalized due to actions of regulator | (3) | 0 | (11) | (1) |
Total net periodic benefit cost | 77 | 76 | 230 | 228 |
Other Post-retirement Benefits | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 19 | |||
Service cost | 4 | 2 | 12 | 8 |
Interest cost | 4 | 5 | 12 | 14 |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service cost | (6) | (6) | (18) | (18) |
Recognized net actuarial loss | (2) | 1 | (7) | 3 |
Total net periodic benefit cost as actuarially determined | 4 | 2 | 13 | 7 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Total net periodic benefit cost | $ 4 | $ 2 | $ 13 | $ 7 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Retirement Plan Disclosure | ||||
Assets for Plan Benefits, Defined Benefit Plan | $ 7,800 | $ 7,800 | $ 6,800 | $ 8,000 |
Remaining Employer Contributions | 75 | |||
Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 225 | |||
defined benefit plan, plan assets, monthly contributions by employer | 25 | |||
Other Post-retirement Benefits | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 19 | |||
SERP | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 5 | |||
Rebates [Member] | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 4 | |||
401K [Member] | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 67 | |||
Minimum | Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 300 |
Contingencies and Legal Proce_2
Contingencies and Legal Proceedings Contingencies (Details) | 9 Months Ended | |
Jun. 30, 2020USD ($)Proceduresreactors | Sep. 30, 2019USD ($) | |
Loss Contingencies | ||
Nuclear liability insurance | $ 450,000,000 | |
Assessment from licensees for each licensed reactor | $ 138,000,000 | |
Number of licensed reactors in US | reactors | 97 | |
Nuclear accident assessment limitation per year per unit | $ 20,000,000 | |
Maximum assessment per nuclear incident | 963,000,000 | |
Total amount of protection available | 13,800,000,000 | |
Amount of insurance available for loss at any one site | 2,100,000,000 | |
Maximum amount of retrospective premiums | 145,000,000 | |
Maximum idemnity if a covered accident takes or keeps a nuclear unit offline | 490,000,000 | |
Maximum retrospective premiums | 43,000,000 | |
Estimated future decommissioning cost | $ 6,071,000,000 | $ 5,616,000,000 |
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 | $ 132,000,000 | |
Possible additional future costs for compliance with CCR requirements | 1,000,000,000 | |
Possible additional future costs for compliance with Clean Water requirements. | 211,000,000 | |
Estimated liability for cleanup and environmental work | 15,000,000 | |
Amount of insurance available for loss at any one site (top range) | 2,800,000,000 | |
Long-term debt of VIEs (including current maturities), net | 1,437,000,000 | 1,371,000,000 |
Legal loss contingency accrual | 13,000,000 | |
Nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 3,242,000,000 | 3,136,000,000 |
Non-nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 2,829,000,000 | $ 2,480,000,000 |
Environmental Agreements | ||
Loss Contingencies | ||
Amount invested in certain environmental projects | 279,000,000 | |
General | ||
Loss Contingencies | ||
Long-term debt of VIEs (including current maturities), net | 13,000,000 | |
Legal loss contingency accrual | 14,000,000 | |
Accounts Payable and Accrued Liabilities | $ 1,000,000 |
Contingencies and Legal Proce_3
Contingencies and Legal Proceedings Legal Proceedings (Details) | 9 Months Ended | |
Jun. 30, 2020USD ($)AgreementsGroupsUnits | Sep. 30, 2019USD ($) | |
Legal Proceedings | ||
Number of licensed nuclear units | Units | 7 | |
Legal loss contingency accrual | $ 13,000,000 | |
Amount paid for remediation under amended consent decree | $ 100,000 | |
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 | |
Amount to be invested in certain TVA environmental projects | $ 290,000,000 | |
Accounts payable and accrued liabilities | General | ||
Legal Proceedings | ||
Legal loss contingency accrual | $ 30,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Subsequent Event [Line Items] | ||||
Redemptions and repurchases of power bonds | $ 1,286 | [1] | $ 1,034 | |
Subsequent Credit on the Public Power Support and Stabilization Program | $ 1 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Redemptions and repurchases of power bonds | $ 140 | |||
[1] | (1) The 2020 Series A Power Bonds were issued at 99.7 percent of par. (2) All redemptions were at 100 percent of par. |
Gallatin Coal Combustion Residu
Gallatin Coal Combustion Residual Facilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
Other Long-Term Liabilities | ||
Current regulatory assets | $ 149 | $ 156 |
Revenue (Details)
Revenue (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($)percent | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)percent | Jun. 30, 2019USD ($) | |
State [Line Items] | ||||
Electric revenue | $ (2,215) | $ (2,563) | $ (7,234) | $ (7,955) |
Sales of Electricity | 2,216 | 2,565 | 7,237 | 7,958 |
Off System Sales of Electricity | 1 | 2 | 3 | 3 |
Other revenue | $ 35 | 39 | $ 113 | 121 |
Total long duration contract revenue recognition | 2,058 | 6,716 | ||
Revenues | $ 2,251 | 2,604 | $ 7,350 | 8,079 |
Off system sales | 2 | |||
ALABAMA | ||||
State [Line Items] | ||||
Electric revenue | (312) | (367) | (1,041) | (1,146) |
GEORGIA | ||||
State [Line Items] | ||||
Electric revenue | (52) | (59) | (179) | (196) |
KENTUCKY | ||||
State [Line Items] | ||||
Electric revenue | (140) | (157) | (455) | (498) |
MISSISSIPPI | ||||
State [Line Items] | ||||
Electric revenue | (204) | (250) | (668) | (751) |
NORTH CAROLINA | ||||
State [Line Items] | ||||
Electric revenue | (13) | (15) | (50) | (56) |
TENNESSEE | ||||
State [Line Items] | ||||
Electric revenue | (1,485) | (1,705) | (4,809) | (5,273) |
VIRGINIA | ||||
State [Line Items] | ||||
Electric revenue | (9) | $ (10) | (32) | $ (35) |
20-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Revenues | $ 1,630 | $ 5,399 | ||
10-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Revenues | $ 1 | $ 1 | ||
5-year termination notice [Member] | ||||
State [Line Items] | ||||
Revenues | $ 427 | $ 1,316 |
Revenue Customer Type (Details)
Revenue Customer Type (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020USD ($)Units | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Units | Jun. 30, 2019USD ($) | |
Revenue, Major Customer [Line Items] | |||||
MLGW's % of operating revenues | 900.00% | 800.00% | |||
NES's % of operating revenues | 800.00% | ||||
Sales of Electricity | $ 2,216 | $ 2,565 | $ 7,237 | $ 7,958 | |
Electric revenue | 2,215 | 2,563 | 7,234 | 7,955 | |
Off System Sales of Electricity | 1 | 2 | 3 | 3 | |
Other revenue | 35 | 39 | 113 | 121 | |
Revenues | 2,251 | 2,604 | 7,350 | 8,079 | |
Bill credits for LTA | $ 38 | $ 108 | |||
Number of LPCs signed LTA | Units | 141 | 141 | |||
Percent of sales of electricity to LPCs | 93.00% | ||||
lpcs [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | $ 2,058 | $ 2,366 | $ 6,716 | 7,347 | |
industries directly served [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 132 | 168 | 442 | 521 | |
federal agencies and other [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 26 | $ 31 | 79 | 90 | |
ALABAMA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 312 | 367 | 1,041 | 1,146 | |
GEORGIA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 52 | 59 | 179 | 196 | |
KENTUCKY | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 140 | 157 | 455 | 498 | |
MISSISSIPPI | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 204 | 250 | 668 | 751 | |
NORTH CAROLINA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 13 | 15 | 50 | 56 | |
TENNESSEE | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 1,485 | 1,705 | 4,809 | 5,273 | |
VIRGINIA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | $ 9 | $ 10 | $ 32 | $ 35 |
Revenue Unpaid Incentives (Deta
Revenue Unpaid Incentives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Paid Economic Incentives | $ 78 | $ 76 | $ 238 | $ 231 | |
Unpaid Economic Incentives | $ (169) | $ (169) | $ (157) |
Revenue Local Power Company C_2
Revenue Local Power Company Contracts (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($)Unitspercent | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Unitspercent | Jun. 30, 2019USD ($) | |
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 2,251 | $ 2,604 | $ 7,350 | $ 8,079 |
Total long-duration contracts revenue recognition | 2,058 | 6,716 | ||
Total percentage of operating revenues | 91.40% | 91.40% | ||
Number of LPCs signed LTA | Units | 141 | 141 | ||
Total Number of LPCs | Units | 154 | 154 | ||
5-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 427 | $ 1,316 | ||
Percentage of total operating revenues | 19.00% | 17.90% | ||
Number of LPCs signed LTA | Units | 12 | 12 | ||
10-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Number of customers that represent the percent of sales | percent | 0 | 0 | ||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 1 | $ 1 | ||
Number of LPCs signed LTA | Units | 1 | 1 | ||
20-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 1,630 | $ 5,399 | ||
Percentage of total operating revenues | 72.40% | 73.50% |
Plant Closures (Details)
Plant Closures (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 15 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Accelerated depreciation | $ 34 | $ 350 | $ 916 | |
Property, Plant and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Dispositions | 3 million | 124 million | 10 million | 37 million |
Property, Plant and Equipment, Disposals | $ 21,000,000 | |||
Paradise Fossil Plant [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Dispositions | 2 million |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 01, 2019 | Sep. 30, 2019 | |
Amounts Recognized on TVA's Consolidated Balance Sheet [Line Items] | ||||||
Finance Lease, Liability, Payments, Due Thereafter | $ 418 | $ 418 | $ 418 | |||
Operating lease assets, net of amortization | 332 | 332 | ||||
Finance lease, asset | 139 | 139 | ||||
Lease assets | 471 | 471 | ||||
Operating Lease, Liability, Current | 101 | 101 | 0 | |||
Finance Lease, Liability, Current | 6 | 6 | ||||
Operating Lease, Liability, Noncurrent | 244 | 244 | ||||
Finance Lease, Liability, Noncurrent | 180 | 180 | ||||
Lease liabilities | 531 | 531 | ||||
Purchased Power Lease | 89 | |||||
Finance Lease, Liability, Payment, Due | 646 | 646 | $ 683 | |||
Operating Lease, Asset | $ 205 | |||||
Operating Lease, Liability | $ 210 | |||||
Short-term Lease, Cost | $ 2 | $ 5 | ||||
Operating Leases, Rent Expense | $ 18 | $ 54 |
Leases Lease Costs (Details)
Leases Lease Costs (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($)Units | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Units | Jun. 30, 2019USD ($) | |
Leases [Abstract] | ||||
Maximum lease term | Units | 27 | 27 | ||
Minimum lease term | Units | 1 | 1 | ||
Operating Leases, Rent Expense | $ 18 | $ 54 | ||
Operating Lease, Cost | $ 26 | $ 65 | ||
Variable Lease, Cost | 26 | 52 | ||
Short-term Lease, Cost | 2 | 5 | ||
Finance lease, amortization expense | 2 | 7 | ||
Finance Lease, Interest Expense | 9 | 24 | ||
Finance lease expenses | 11 | 31 | ||
Lease, Cost | $ 65 | $ 153 | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years | 4 years | ||
Finance Lease, Weighted Average Remaining Lease Term | 12 years | 12 years | ||
Operating Lease, Weighted Average Discount Rate, Percent | 1.60% | 1.60% | ||
Finance Lease, Weighted Average Discount Rate, Percent | 35.10% | 35.10% |
Leases Amounts Recognized on TV
Leases Amounts Recognized on TVA's Consolidated Statements of Cash Flows (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2020USD ($) | |
Amounts Recognized on TVA's Consolidated Statements of Cash Flows [Abstract] | |
Operating cash flows for operating leases | $ 57 |
Operating cash flows for finance leases | 24 |
Financing cash flows for finance leases | 4 |
Lease assets obtained in exchange for lease obligations (non-cash) - Operating | 188 |
Lease assets obtained in exchange for lease obligations (non-cash) - Finance | $ 3 |
Leases Future Minimum Lease Pay
Leases Future Minimum Lease Payments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Amounts Recognized on TVA's Consolidated Statements of Cash Flows [Abstract] | ||
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 38 | $ 76 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 106 | 75 |
Operating Leases, Future Minimum Payments, Due in Four Years | 35 | 3 |
Operating Leases, Future Minimum Payments, Due Thereafter | 44 | 2 |
Operating Leases, Future Minimum Payments Due | 357 | 228 |
Present value of future minimum lease payments, operating leases | 12 | 0 |
Operating present value of net minimum lease payments | 345 | 228 |
Operating Leases, Future Minimum Payments, Due in Two Years | 91 | 60 |
Operating Leases, Future Minimum Payments, Due in Three Years | 43 | 12 |
Finance Lease, Liability, Payments, Remainder of Fiscal Year | 14 | 53 |
Finance Lease, Liability, Payments, Due Next Twelve Months | 53 | 53 |
Finance Lease, Liability, Payments, Due Year Two | 53 | 53 |
Finance Lease, Liability, Payments, Due Year Three | 56 | 55 |
Finance Lease, Liability, Payments, Due Year Four | 52 | 51 |
Purchased Power Lease | 89 | |
Finance Lease, Liability, Payments, Amount representing interest | 460 | 495 |
Finance present value of net minimum lease payments | $ 186 | $ 188 |