DEI Document
DEI Document shares in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021shares | Mar. 31, 2021shares | |
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 | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 0 | 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 | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Operating revenues | ||||
Sales of Electricity | $ 2,533 | $ 2,489 | $ 4,803 | $ 5,021 |
Other revenue | 39 | 32 | 73 | 78 |
Revenues | 2,572 | 2,521 | 4,876 | 5,099 |
Operating expenses | ||||
Fuel | 413 | 429 | 782 | 852 |
Purchased power | 225 | 252 | 431 | 471 |
Operating and maintenance | 644 | 644 | 1,359 | 1,333 |
Depreciation and amortization | 381 | 457 | 759 | 1,041 |
Tax equivalents | 124 | 132 | 245 | 263 |
Total operating expenses | 1,787 | 1,914 | 3,576 | 3,960 |
Operating income | 785 | 607 | 1,300 | 1,139 |
Other income (expense), net | 11 | (1) | 26 | 11 |
Defined Benefit Plan, Other Cost (Credit) | 64 | 62 | 129 | 127 |
Interest expense | ||||
Interest expense | 276 | 289 | 557 | 576 |
Net income (loss) | $ 456 | $ 255 | $ 640 | $ 447 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | ||||
Net income (loss) | $ 456,000,000 | $ 255,000,000 | $ 640,000,000 | $ 447,000,000 | |||
Other comprehensive income (loss) | |||||||
Net unrealized gain (loss) on cash flow hedges | 22,000,000 | (163,000,000) | 123,000,000 | (87,000,000) | |||
Reclassification to earnings from cash flow hedges | (5,000,000) | 56,000,000 | [1] | (50,000,000) | [1] | (3,000,000) | [1] |
Total other comprehensive income (loss) | 17,000,000 | (107,000,000) | 73,000,000 | (90,000,000) | |||
Total comprehensive income (loss) | $ 473,000,000 | $ 148,000,000 | $ 713,000,000 | $ 357,000,000 | |||
[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 $19 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Mar. 31, 2021 | Sep. 30, 2020 |
Current assets | ||
Cash and cash equivalents | $ 500,000,000 | $ 500,000,000 |
Accounts receivable, net | 1,284,000,000 | 1,529,000,000 |
Inventories, net | 1,014,000,000 | 1,003,000,000 |
Regulatory assets | 155,000,000 | 130,000,000 |
Other current assets | 123,000,000 | 84,000,000 |
Total current assets | 3,076,000,000 | 3,246,000,000 |
Property, plant, and equipment | ||
Completed plant | 65,679,000,000 | 64,970,000,000 |
Less accumulated depreciation | (34,172,000,000) | (33,550,000,000) |
Net completed plant | 31,507,000,000 | 31,420,000,000 |
Construction in progress | 2,250,000,000 | 2,139,000,000 |
Nuclear fuel | 1,471,000,000 | 1,504,000,000 |
Capital leases | 725,000,000 | 516,000,000 |
Total property, plant, and equipment, net | 35,953,000,000 | 35,579,000,000 |
Investment funds | 3,723,000,000 | 3,198,000,000 |
Regulatory and other long-term assets | ||
Regulatory assets | 9,230,000,000 | 10,245,000,000 |
Operating Lease, Right-of-Use Asset | 182,000,000 | 232,000,000 |
Other long-term assets | 318,000,000 | 325,000,000 |
Total regulatory and other long-term assets | 9,730,000,000 | 10,802,000,000 |
Total assets | 52,482,000,000 | 52,825,000,000 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,786,000,000 | 1,844,000,000 |
Accrued interest | 302,000,000 | 298,000,000 |
Asset Retirement Obligation, Current | 271,000,000 | 345,000,000 |
Current portion of leaseback obligations | 87,000,000 | 198,000,000 |
Regulatory liabilities | 141,000,000 | 141,000,000 |
Short-term debt, net | 1,241,000,000 | 57,000,000 |
Current maturities of power bonds | 304,000,000 | 1,787,000,000 |
Current maturities of long-term debt of variable interest entities | 42,000,000 | 41,000,000 |
Total current liabilities | 4,174,000,000 | 4,711,000,000 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 6,407,000,000 | 6,617,000,000 |
Asset retirement obligations | 6,647,000,000 | 6,440,000,000 |
Operating Lease, Liability, Noncurrent | 720,000,000 | |
Operating Lease, Liability, Current | 525,000,000 | |
Other long-term liabilities | 1,867,000,000 | 2,548,000,000 |
Leaseback obligations | 0 | 25,000,000 |
Regulatory liabilities | 5,000,000 | 23,000,000 |
Total other liabilities | 15,646,000,000 | 16,178,000,000 |
Long-term debt, net | ||
Long-term power bonds, net | 17,995,000,000 | 17,956,000,000 |
Long-term debt of variable interest entities, net | 1,028,000,000 | 1,048,000,000 |
Total long-term debt, net | 19,023,000,000 | 19,004,000,000 |
Total liabilities | 38,843,000,000 | 39,893,000,000 |
Proprietary capital | ||
Power program appropriation investment | 258,000,000 | 258,000,000 |
Power program retained earnings | 12,815,000,000 | 12,177,000,000 |
Total power program proprietary capital | 13,073,000,000 | 12,435,000,000 |
Nonpower programs appropriation investment, net | 544,000,000 | 548,000,000 |
Accumulated other comprehensive income (loss) | 22,000,000 | (51,000,000) |
Total proprietary capital | 13,639,000,000 | 12,932,000,000 |
Total liabilities and proprietary capital | $ 52,482,000,000 | $ 52,825,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 519 | $ 858 | |
Cash flows from operating activities | |||
Net income (loss) | 640 | 447 | |
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) | 770 | 1,052 | |
Amortization of nuclear fuel cost | 193 | 194 | |
Non-cash retirement benefit expense | 166 | 162 | |
Amortization of Regulatory Asset | (39) | (83) | |
Changes in current assets and liabilities | |||
Accounts receivable, net | (246) | (475) | |
Inventories and other current assets, net | 43 | 101 | |
Increase (Decrease) in Accounts Payable | (70) | (218) | |
Accrued interest | 6 | 13 | |
Pension contributions | (155) | (155) | |
Other, net | 144 | 82 | |
Net cash provided by operating activities | 1,570 | 1,870 | |
Cash flows from investing activities | |||
Construction expenditures | (975) | (840) | |
Nuclear fuel expenditures | 129 | 184 | |
Loans and other receivables | |||
Advances | (7) | (3) | |
Repayments | 2 | 4 | |
Other, net | (17) | (13) | |
Net cash used in investing activities | (1,092) | (1,010) | |
Long-term debt | |||
Redemptions and repurchases of power bonds | (1,501) | [1] | (1,218) |
Repayments of Other Long-term Debt | 20 | 20 | |
Short-term debt issues (redemptions), net | 1,184 | 953 | |
Payments on leases and leasebacks | (154) | (43) | |
Other, net | 11 | 4 | |
Net cash provided by (used in) financing activities | (480) | (324) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (2) | ||
Net change in cash and cash equivalents | $ 536 | ||
Cash and cash equivalents at end of period | $ 500 | ||
[1] | (1) All redemptions were at 100 percent of par. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PROPRIETARY CAPITAL (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Power Program Appropriation Investment | $ 258,000,000 | $ 258,000,000 | $ 258,000,000 | |||||
Power Program Retained Earnings | 12,815,000,000 | 12,815,000,000 | 12,177,000,000 | |||||
Nonpower Programs Appropriation Investment, Net | 544,000,000 | 544,000,000 | 548,000,000 | |||||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | 22,000,000 | 22,000,000 | (51,000,000) | |||||
Total Proprietary Capital | 13,639,000,000 | $ 11,979,000,000 | 13,639,000,000 | $ 11,979,000,000 | $ 13,167,000,000 | 12,932,000,000 | $ 11,832,000,000 | $ 11,625,000,000 |
Net income (loss) | 456,000,000 | 255,000,000 | 640,000,000 | 447,000,000 | ||||
Total other comprehensive income (loss) | 17,000,000 | (107,000,000) | 73,000,000 | (90,000,000) | ||||
Return on power program appropriation investment | (1,000,000) | (1,000,000) | (2,000,000) | (3,000,000) | ||||
New Accounting Standard - CECL | (4,000,000) | |||||||
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 | ||||
New Accounting Standard - CECL | 0 | |||||||
Power Program Retained Earnings | ||||||||
Power Program Retained Earnings | 12,815,000,000 | 11,271,000,000 | 12,815,000,000 | 11,271,000,000 | 12,358,000,000 | 12,177,000,000 | 11,015,000,000 | 10,823,000,000 |
Net income (loss) | 458,000,000 | 257,000,000 | 644,000,000 | 451,000,000 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | (1,000,000) | (1,000,000) | (2,000,000) | (3,000,000) | ||||
New Accounting Standard - CECL | (4,000,000) | |||||||
Nonpower Programs Appropriation Investment, Net | ||||||||
Nonpower Programs Appropriation Investment, Net | 544,000,000 | 552,000,000 | 544,000,000 | 552,000,000 | 546,000,000 | 548,000,000 | 554,000,000 | 556,000,000 |
Net income (loss) | (2,000,000) | (2,000,000) | (4,000,000) | (4,000,000) | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | 0 | 0 | 0 | 0 | ||||
New Accounting Standard - CECL | 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 | 22,000,000 | (102,000,000) | 22,000,000 | (102,000,000) | $ 5,000,000 | $ (51,000,000) | $ 5,000,000 | $ (12,000,000) |
Net income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | 17,000,000 | (107,000,000) | 73,000,000 | (90,000,000) | ||||
Return on power program appropriation investment | 0 | $ 0 | $ 0 | $ 0 | ||||
New Accounting Standard - CECL | $ 0 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Statement - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Significant Noncash Transactions [Line Items] | ||
Capital Expenditures Incurred but Not yet Paid | $ 394 | $ 295 |
Increase in lease assets/liabilities | $ 233 |
Statement of Cash Flows, Supple
Statement of Cash Flows, Supplemental Disclosures | 6 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and 2020, were $394 million and $295 million, respectively, and are excluded from the Statements of Consolidated Cash Flows for the six months ended March 31, 2021 and 2020, as non-cash investing activities. Excluded from the Statements of Consolidated Cash Flows for the six months ended March 31, 2021, were non-cash investing and financing activities of $233 million related primarily to an increase in lease assets and liabilities incurred for a finance lease that was amended in March 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2021 | |
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 approximately 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 United States Department of the Treasury ("U.S. Treasury") as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment. Power rates are established by the TVA Board of Directors (the "TVA Board") as authorized by the Tennessee Valley Authority Act of 1933, as amended ("TVA Act"). The TVA Act requires TVA to charge rates for power that will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to states and counties in lieu of taxes ("tax equivalents"); debt service on outstanding indebtedness; payments to the U.S. Treasury in repayment of and as a return on the Power Program Appropriation Investment; and such additional margin as the TVA Board may consider desirable for investment in power system assets, retirement of outstanding Bonds in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA's power business. TVA fulfilled its 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 other federal regulatory body. Fiscal Year TVA's fiscal year ends September 30. Years (2021, 2020, 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, 2020, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2020 (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 and variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 8 — 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 Coronavirus Disease 2019 ("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. 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 19 — 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 March 31, 2021 At September 30, 2020 Cash and cash equivalents $ 500 $ 500 Restricted cash and cash equivalents included in Other long-term assets 19 21 Total cash, cash equivalents, and restricted cash $ 519 $ 521 Due to higher volatility in the financial markets associated with the COVID-19 pandemic, TVA increased its target balance of Cash and cash equivalents beginning in March 2020. TVA may continue to hold higher balances in future periods due to potential market volatility. Allowance for Uncollectible Accounts As described in Note 2 — Impact of New Accounting Standards and Interpretations , TVA adopted Financial Instruments - Credit Losses on October 1, 2020, using a modified retrospective method through a cumulative-effect adjustment to retained earnings. The standard, Current Expected Credit Losses ("CECL"), requires TVA to recognize an allowance that reflects the current estimate for credit losses expected to be incurred over the life of the financial assets based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amounts. TVA has reviewed the current portfolio of financial receivables and developed a methodology to reasonably measure the estimate of credit losses for each major financial receivable type. The appropriateness of the allowance is evaluated at the end of each reporting period. TVA continues to monitor the impact of the COVID-19 pandemic on accounts and loans receivable balances to evaluate the allowance for uncollectible accounts. To determine the allowance for trade receivables, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date. TVA's corporate credit department also performs an assessment of the financial condition of customers and the credit quality of the receivables. In addition, TVA reviews other reasonable and supportable forecasts to determine if the allowance for uncollectible amounts should be further adjusted in accordance with the accounting guidance for CECL. To determine the allowance for loans receivables, TVA aggregates loans into the appropriate pools based on the existence of similar risk characteristics such as collateral types and internal assessed credit risks. In situations where a loan exhibits unique risk characteristics and is no longer expected to experience similar risks to the rest of its pool, the loan will be evaluated separately. TVA derives an annual loss rate based on historical loss and then adjusts the rate to reflect TVA's consideration of available information on current conditions and reasonable and supportable future forecasts. This information may include economic and business conditions, default trends, and other internal and external factors. For periods beyond the reasonable and supportable forecast period, TVA uses the current calculated long-term average historical loss rate for the remaining life of the loan portfolio. The allowance for uncollectible accounts was less than $1 million at both March 31, 2021, and September 30, 2020, for trade accounts receivable. Additionally, loans receivable of $117 million and $105 million at March 31, 2021, and September 30, 2020, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively. Loans receivables are reported net of allowances for uncollectible accounts of $5 million and less than $1 million at March 31, 2021, and September 30, 2020, respectively. The increase in allowances for uncollectible accounts is due to the adoption of CECL. See Note 2 - Impact of New Accounting Standards and Interpretations. 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 is recorded in Other revenue. Revenues that are not related to the overall mission are recorded in Other income (expense), net. 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 approximately every five years, with a study currently being performed in 2021. Depreciation expense was $346 million and $407 million for the three months ended March 31, 2021 and 2020, respectively. Depreciation expense was $691 million and $946 million for the six months ended March 31, 2021 and 2020, respectively. See Note 5 — Plant Closures |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations | 6 Months Ended |
Mar. 31, 2021 | |
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 2021: 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. Effective Date for TVA October 1, 2020 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a modified retrospective method through a cumulative-effect adjustment to retained earnings on October 1, 2020. TVA recorded an initial transition adjustment of $4 million to retained earnings. The adoption of this standard did not materially impact TVA's financial condition, results of operations, or cash flows. Fair Value Measurement Disclosure Description This 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 October 1, 2020 Effect on the Financial Statements or Other Significant Matters Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. The following accounting standard has been issued but at March 31, 2021, was not effective and had not been adopted by TVA: Reference Rate Reform Description This 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 does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations, or cash flows. |
Accounts Receivable, Net
Accounts Receivable, Net | 6 Months Ended |
Mar. 31, 2021 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, Net | Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable: Accounts Receivable, Net At March 31, 2021 At September 30, 2020 Power receivables $ 1,204 $ 1,401 Other receivables 80 128 Accounts receivable, net (1) $ 1,284 $ 1,529 Note (1) Allowance for uncollectible accounts was less than $1 million at March 31, 2021, and September 30, 2020, and therefore is not represented in the table above. The allowance at March 31, 2021 includes the impact from adopting CECL on October 1, 2020. |
Inventories, Net
Inventories, Net | 6 Months Ended |
Mar. 31, 2021 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At March 31, 2021 At September 30, 2020 Materials and supplies inventory $ 767 $ 770 Fuel inventory 263 253 Renewable energy certificates inventory, net 18 15 Allowance for inventory obsolescence (34) (35) Inventories, net $ 1,014 $ 1,003 |
Other Long-Term Assets
Other Long-Term Assets | 6 Months Ended |
Mar. 31, 2021 | |
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 (in millions) At March 31, 2021 At September 30, 2020 Loans and other long-term receivables, net $ 109 $ 100 EnergyRight ® receivables, net 62 69 Prepaid long-term service agreements 54 42 Commodity contract derivative assets 5 23 Restricted cash and cash equivalents 19 21 Prepaid capacity payments 8 11 Other 61 59 Total other long-term assets $ 318 $ 325 EnergyRight ® Receivables, Net . In association with the EnergyRight ® program, TVA's 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 March 31, 2021, and September 30, 2020, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $16 million and $18 million, respectively. See Note 9 — Other Long-Term Liabilities for information regarding the associated financing obligation. In response to the COVID-19 pandemic, customers experiencing financial hardship could request a deferral of EnergyRight ® loan payments for a period of up to six months. The deferral option began in April 2020 and ended October 31, 2020. As of March 31, 2021, all EnergyRight ® loans approved for the deferral period had resumed payments. The deferred loans did not accrue interest during the deferral months and totaled less than $1 million. Allowance for Loan Losses. As described in Note 2 — Impact of New Accounting Standards and Interpretations, TVA adopted CECL on October 1, 2020 to determine its allowance for loan loss. The allowance for loan loss is an estimate of expected credit losses, measured over the estimated life of the loan receivables, that considers reasonable and supportable forecasts of future economic conditions in addition to information about historical experience and current conditions. See Note 1 — Summary of Significant Accounting Policies — Allowance for Uncollectible Accounts . The allowance components, which consist of a collective allowance and specific loans allowance, are based on the risk characteristics of TVA's loans. Loans that share similar risk characteristics are evaluated on a collective basis in measuring credit losses, while loans that do not share similar risk characteristics with other loans are evaluated on an individual basis. Allowance Components (in millions) At March 31, 2021 EneryRight ® loan reserve $ 2 Economic development loan collective reserve 1 Economic development loan specific loan reserve 2 Total allowance for loan losses $ 5 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 March 31, 2021, and September 30, 2020, prepayments of $11 million and $3 million, respectively, were recorded in Other current assets. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 6 Months Ended |
Mar. 31, 2021 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below. Regulatory Assets and Liabilities At March 31, 2021 At September 30, 2020 Current regulatory assets Unrealized losses on interest rate derivatives $ 114 $ 114 Unrealized losses on commodity derivatives — 4 Fuel cost adjustment receivable 41 12 Total current regulatory assets 155 130 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 5,009 5,193 Non-nuclear decommissioning costs 2,604 2,512 Unrealized losses on interest rate derivatives 986 1,506 Nuclear decommissioning costs 482 896 Unrealized losses on commodity derivatives 4 — Other non-current regulatory assets 145 138 Total non-current regulatory assets 9,230 10,245 Total regulatory assets $ 9,385 $ 10,375 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 115 $ 115 Unrealized gains on commodity derivatives 26 26 Total current regulatory liabilities 141 141 Non-current regulatory liabilities Unrealized gains on commodity derivatives 5 23 Total regulatory liabilities $ 146 $ 164 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2021 | |
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 both of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco's membership interests in JSCCG are eliminated in consolidation. 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 in the Consolidated Statements of Operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC ("SSSL") on each lease payment date as agreed in SHLLC's formation documents (the "Seven States Return"). The current and long-term portions of the Membership interests of VIE subject to mandatory redemption are included in Accounts payable and accrued liabilities and Other long-term liabilities, respectively. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes. The SCCG notes are secured by TVA's lease payments, and the SHLLC notes are secured by SHLLC's investment in, and amounts receivable from, SCCG. TVA's lease payments to SCCG are payable on the same dates as SCCG's and SHLLC's semi-annual debt service payments and are equal to the sum of (i) the amount of SCCG's semi-annual debt service payments, (ii) the amount of SHLLC's semi-annual debt service payments, and (iii) the amount of the Seven States Return. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by SCCG and SHLLC. Certain agreements related to this transaction contain default and acceleration provisions. In the event that TVA were to choose to exercise an early buy out feature of the Southaven facility lease, in part or in whole, TVA must pay to SCCG amounts sufficient for SCCG to repay or partially repay on a pro rata basis the membership interests held by SHLLC, including any outstanding investment amount plus accrued but unpaid return. TVA also has the right, at any time and without any early redemption of the other portions of the Southaven facility lease payments due to SCCG, to fully repay SHLLC's investment, upon which repayment SHLLC will transfer the membership interests to a designee of TVA. TVA participated in the design, business conduct, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis. Impact on Consolidated Financial Statements The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG at March 31, 2021, and September 30, 2020, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At March 31, 2021 At September 30, 2020 Current liabilities Accrued interest $ 10 $ 10 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 42 41 Total current liabilities 55 54 Other liabilities Other long-term liabilities 21 23 Long-term debt, net Long-term debt of variable interest entities, net 1,028 1,048 Total liabilities $ 1,104 $ 1,125 Interest expense of $13 million and $14 million for the three months ended March 31, 2021 and 2020, and $26 million and $27 million for the six months ended March 31, 2021 and 2020, 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 do not have any recourse to the general credit of TVA. TVA does not have any obligations to provide financial support to the VIEs other than as prescribed in the terms of the agreements related to these transactions. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 6 Months Ended |
Mar. 31, 2021 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist primarily of liabilities related to certain derivative agreements, as well as for environmental remediation liabilities and liabilities under agreements related to compliance with certain environmental regulations. See Note 10 — Asset Retirement Obligations and Note 13 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives . The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities (in millions) At March 31, 2021 At September 30, 2020 Interest rate swap liabilities $ 1,398 $ 1,927 Operating lease liabilities 143 171 Currency swap liabilities 21 123 EnergyRight ® financing obligations 71 78 Accrued long-term service agreements 40 56 Other 194 193 Total other long-term liabilities $ 1,867 $ 2,548 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, Accrued interest, and Other long-term liabilities on the Consolidated Balance Sheets. At both March 31, 2021, and September 30, 2020, the carrying amount of the interest rate swap liabilities reported in Accounts payable and accrued liabilities and Accrued interest was $114 million. See Note 13 — 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 March 31, 2021, interest rate swap liabilities decreased $529 million as compared to September 30, 2020, due to an increase in both market interest rates since September 30, 2020, and net settlement payments made during the six months ended March 31, 2021. 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 obligation are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. At March 31, 2021, and September 30, 2020, the carrying amount of the financing obligations reported in Accounts payable and accrued liabilities was $18 million and $19 million, respectively. See Note 6 — Other Long-Term Assets for information regarding the associated loans receivable. In response to the COVID-19 pandemic, customers experiencing financial hardship could request a deferral of EnergyRight ® loan payments for a period of up to six months. The deferral option began in April 2020 and ended October 31, 2020. As of March 31, 2021, all EnergyRight ® loans approved for the deferral period had resumed payments. The deferred loans did not accrue interest during the deferral months and totaled less than $1 million. 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 March 31, 2021 and September 30, 2020, related liabilities of $20 million and $15 million, respectively, were recorded in Accounts payable and accrued liabilities. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the six months ended March 31, 2021, TVA's total asset retirement obligations ("ARO") liability increased $133 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 six months ended March 31, 2021, $36 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 7 — Regulatory Assets and Liabilities . TVA maintains investment trusts to help fund its decommissioning obligations. See Note 14 — Fair Value Measurements — Investment Funds and Note 19 — 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 Nuclear Non-Nuclear Total Balance at September 30, 2020 $ 3,278 $ 3,507 $ 6,785 (1) Settlements (3) (77) (80) Revisions in estimate 2 106 108 Accretion (recorded as regulatory asset) 74 31 105 Balance at March 31, 2021 $ 3,351 $ 3,567 $ 6,918 (1) Note (1) Includes $271 million and $345 million at March 31, 2021, and September 30, 2020, respectively, in Current liabilities. The revisions in non-nuclear estimates increased $106 million for the six months ended March 31, 2021. These increases were primarily driven by revisions of certain CCR closure liabilities at Shawnee, Paradise, and Colbert, resulting from revised engineering estimates for construction costs, new vendor bids, modified closure designs, and expected costs associated with post-closure care of the closed areas. |
Debt and Other Obligations
Debt and Other Obligations | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Debt Outstanding Total debt outstanding at March 31, 2021, and September 30, 2020, consisted of the following: Debt Outstanding At March 31, 2021 At September 30, 2020 Short-term debt Short-term debt, net $ 1,241 $ 57 Current maturities of power bonds issued at par (1) 304 1,787 Current maturities of long-term debt of VIEs issued at par 42 41 Total current debt outstanding, net 1,587 1,885 Long-term debt Long-term power bonds (2) 18,112 18,078 Long-term debt of VIEs, net 1,028 1,048 Unamortized discounts, premiums, issue costs, and other (117) (122) Total long-term debt, net 19,023 19,004 Total debt outstanding $ 20,610 $ 20,889 Notes (1) Includes net exchange gain from currency transactions of $56 million and $73 million at March 31, 2021, and September 30, 2020, respectively. (2) Includes net exchange gain from currency transactions of $46 million and $80 million at March 31, 2021, and September 30, 2020, respectively. For the six months ended March 31, 2021, Short-term debt, net increased primarily due to funding a portion of the power bonds that matured in February 2021. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2020, to March 31, 2021: Debt Securities Activity Date Amount (in millions) Interest Rate Redemptions/Maturities (1) 2009 Series B December 2020 $ 1 3.77 % 2011 Series A February 2021 1,500 3.88 % Total redemptions/maturities of power bonds 1,501 Debt of variable interest entities 20 Total redemptions/maturities of debt $ 1,521 Note (1) All redemptions were at 100 percent of par. Credit Facility Agreements TVA has funding available under four long-term revolving credit facilities totaling approximately $2.7 billion: a $1.0 billion credit facility that matures on June 13, 2023, a $1.0 billion credit facility that matures on September 28, 2023, a $150 million credit facility that matures on February 9, 2024, 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 March 31, 2021, and September 30, 2020, there were approximately $1.2 billion and $1.5 billion, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. See Note 13 — 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 March 31, 2021 (in millions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability June 2023 $ 1,000 $ 289 $ — $ 711 September 2023 1,000 326 — 674 February 2024 150 38 — 112 February 2025 500 500 — — Total $ 2,650 $ 1,153 $ — $ 1,497 TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed for 2021 with a maturity date of September 30, 2021. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue Bonds in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at March 31, 2021. 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 March 31, 2021 , and September 30, 2020, the outstanding leaseback obligations related to the remaining CTs and QTE were $87 million and $223 million, respectively. In May 2020, TVA made final rent payments under lease/leaseback transactions involving eight 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 being made 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) | 6 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) ("AOCI") represents market valuation adjustments related to TVA's currency swaps. The currency swaps are cash flow hedges and are the only derivatives in TVA's portfolio that have been designated and qualify for hedge accounting treatment. TVA records exchange rate gains and losses on its foreign currency-denominated debt and any related accrued interest in net income and marks its currency swap assets and liabilities to market through other comprehensive income (loss) ("OCI"). TVA then reclassifies an amount out of AOCI into net income, offsetting the exchange gain/loss recorded on the debt. During the three months ended March 31, 2021 and 2020, TVA reclassified $5 million of gains and $56 million of losses, respectively, related to its cash flow hedges from AOCI to Interest expense. During the six months ended March 31, 2021 and 2020, TVA reclassified $50 million and $3 million of gains, respectively, related to its cash flow hedges from AOCI to Interest expense. See Note 13 — 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 7 — Regulatory Assets and Liabilities for a schedule of regulatory assets and liabilities. See Note 13 — Risk Management Activities and Derivative Transactions for a discussion of the recognition in AOCI of gains and losses associated with certain derivative instruments. See Note 14 — Fair Value Measurements for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 18 — Benefit Plans |
Risk Management Activities and
Risk Management Activities and Derivative Transactions | 6 Months Ended |
Mar. 31, 2021 | |
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. During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts because these contracts no longer met the criteria of net settlement, and, as a result, the associated net derivative liabilities were derecognized at that time. In addition, TVA suspended its Financial Trading Program ("FTP") in 2014 and is not currently using financial instruments to hedge risks related to commodity prices. TVA plans to continue managing fuel price volatility through other methods and is reevaluating 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 March 31 Six Months Ended March 31 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2021 2020 2021 2020 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 $ 22 $ (163) $ 123 $ (87) 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 March 31 Six Months Ended March 31 Derivatives in Cash Flow Hedging Relationship 2021 2020 2021 2020 Currency swaps $ 5 $ (56) $ 50 $ 3 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 $19 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 March 31 Six Months Ended March 31 Derivative Type Objective of Derivative (2) Accounting for Derivative Instrument 2021 2020 2021 2020 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow $ (28) $ (23) $ (57) $ (44) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses due to contract settlements are recognized in Fuel expense as incurred — — — 1 Notes (1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and six months ended March 31, 2021 and 2020. (2) During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts. Fair Values of TVA Derivatives (in millions) At March 31, 2021 At September 30, 2020 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (58) Accounts payable and accrued liabilities $(58) $ (78) Accounts payable and accrued liabilities $(78) £250 million Sterling (8) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(4) (63) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(58) £150 million Sterling (20) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(17) (68) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(65) Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (1,090) Accounts payable and accrued liabilities $(43); Accrued interest $(37); Other long-term liabilities $(1,010) $ (1,449) Accounts payable and accrued liabilities $(43); Accrued interest $(37); Other long-term liabilities $(1,369) $476 million notional (419) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(387) (588) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(556) $42 million notional (1) (3) Accounts payable and accrued liabilities $(1); Accrued interest $(1); Other long-term liabilities $(1) (4) Accounts payable and accrued liabilities $(2); Other long-term liabilities $(2) Commodity contract derivatives 27 Other current assets $27; Other long-term assets $5; Accounts payable and accrued liabilities $(1); Other long-term liabilities $(4) 46 Other current assets $26; Other long-term assets $23; Accounts payable and accrued liabilities $(3) Note (1) Represents two interest rate swaps with notional amounts of $28 million and $14 million. 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 March 31, 2021, 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 March 31, 2021 and 2020, the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized gains of $386 million and unrealized losses of $556 million, respectively. For the six months ended March 31, 2021 and 2020, the changes in fair market value of the interest rate swaps resulted in the deferral of unrealized gains of $529 million and unrealized losses of $385 million, respectively. TVA may hold short-term debt balances lower than the notional amount of the interest rate swaps from time to time due to changes in business conditions and other factors. While actual balances vary, TVA generally plans to maintain average balances of short-term debt equal to or in excess of the combined notional amount of the interest rate swaps. Commodity Derivatives . TVA enters into certain derivative contracts for natural gas that require physical delivery of the contracted quantity of the commodity. TVA marks to market natural gas contracts and defers the fair market values as regulatory assets or liabilities on a gross basis. At March 31, 2021, TVA's natural gas contract derivatives had terms of up to three years. Commodity Contract Derivatives At March 31, 2021 At September 30, 2020 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Natural gas contract derivatives 27 274 million mmBtu 27 42 302 million mmBtu 46 Offsetting of Derivative Assets and Liabilities The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets are shown in the table below: Derivative Assets and Liabilities (1) (in millions) At March 31, 2021 At September 30, 2020 Assets Commodity derivatives not subject to master netting or similar arrangement $ 32 $ 49 Liabilities Currency swaps (2) $ 86 $ 209 Interest rate swaps (2) 1,512 2,041 Total derivatives subject to master netting or similar arrangement 1,598 2,250 Commodity derivatives not subject to master netting or similar arrangement 5 3 Total liabilities $ 1,603 $ 2,253 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 material offsetting amounts on TVA's Consolidated Balance Sheets at either March 31, 2021, or September 30, 2020. (2) Letters of credit of approximately $1.2 billion and $1.5 billion were posted as collateral at March 31, 2021, and September 30, 2020, 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 14 — 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 March 31, 2021, and September 30, 2020, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $8 million and $13 million at March 31, 2021, and September 30, 2020, respectively. Collateral . TVA's interest rate swaps and currency swaps contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At March 31, 2021, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $1.6 billion. TVA's collateral obligations at March 31, 2021, under these arrangements were approximately $1.1 billion, for which TVA had posted approximately $1.2 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 $1.2 billion and $1.4 billion of receivables from power sales outstanding at March 31, 2021, and September 30, 2020, 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, Note 3 — Accounts Receivable, Net, and Note 6 — Other Long-Term Assets . TVA had revenue from two LPCs that collectively accounted for 16 percent of total operating revenues for both the three and six months ended March 31, 2021 and the three and six months ended March 31, 2020. 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 primarily 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 March 31, 2021. 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 acquires power from a variety of power producers through long-term and short-term power purchase agreements ("PPAs") as well as through spot market purchases. In order to meet customer preferences and requirements for cleaner and greener energy, TVA has entered into certain PPAs with renewable resource providers. TVA also has a PPA 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 . TVA has experienced minimal impacts due to force majeure events, with the exception of a manufacturing delay for a major turbine component. A mitigation strategy was developed by TVA and the vendor which reduced impacts to TVA's outage schedule. TVA will continue to monitor the supply base and remain in contact with suppliers to identify potential risks. 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, or 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 March 31, 2021, 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 A2 or higher. TVA classifies qualified forward natural gas contracts as derivatives. See Derivatives Not Receiving Hedge Accounting Treatment above. At March 31, 2021, the natural gas contracts were with counterparties whose ratings ranged from B1 to A1. TVA recognizes the slowdown in demand and the impacts on the oil and gas industry as a result of the COVID-19 pandemic. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. Valuation Techniques The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows: Level 1 — Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing. Level 2 — Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means. Level 3 — Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. A financial instrument's level within the fair value hierarchy (where Level 1 is the highest and Level 3 is the lowest) is based on the lowest level of input significant to the fair value measurement. The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP and DCP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements. Investment Funds At March 31, 2021, Investment funds were comprised of $3.7 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 $2.6 billion and $1.0 billion, respectively, at March 31, 2021. 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 to future periods. 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 $220 million, private real assets of $88 million, and private credit of $44 million at March 31, 2021. The ART had unfunded commitments related to limited partnerships in private equity of $129 million, private real assets of $69 million, and private credit of $22 million at March 31, 2021. 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 NAV 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 7 — 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 March 31 Six Months Ended March 31 Fund Financial Statement Presentation 2021 2020 2021 2020 NDT Regulatory asset $ 23 $ (357) $ 253 $ (246) ART Regulatory asset 28 (135) 120 (98) SERP Other income (expense) 1 (9) 5 (8) DCP Other income (expense) — (3) 1 (2) Currency and Interest Rate Swap Derivatives See Note 13 — 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 See Note 13 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment. 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. 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 1984 to CY 2020) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. The application of CVAs resulted in a less than $1 million decrease in the fair value of assets and a $1 million decrease in the fair value of liabilities at March 31, 2021. 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 March 31, 2021, and September 30, 2020. 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 (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 617 $ — $ — $ 617 Government debt securities (1) 528 32 — 560 Corporate debt securities (2) — 409 — 409 Mortgage and asset-backed securities — 30 — 30 Institutional mutual funds 222 — — 222 Forward debt securities contracts — 8 — 8 Private equity funds measured at net asset value (3) — — — 274 Private real asset funds measured at net asset value (3) — — — 215 Private credit measured at net asset value (3) — — — 62 Commingled funds measured at net asset value (3) — — — 1,326 Total investments 1,367 479 — 3,723 Commodity contract derivatives — 32 — 32 Total $ 1,367 $ 511 $ — $ 3,755 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 86 $ — $ 86 Interest rate swaps — 1,512 — 1,512 Commodity contract derivatives — 5 — 5 Total $ — $ 1,603 $ — $ 1,603 Notes (1) Includes obligations of government-sponsored entities. (2) Includes both U.S. and foreign debt. (3) 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. (4) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 13 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 500 $ — $ — $ 500 Government debt securities (1) 485 40 — 525 Corporate debt securities (2) — 356 — 356 Mortgage and asset-backed securities — 27 — 27 Institutional mutual funds 188 — — 188 Forward debt securities contracts — 13 — 13 Private equity funds measured at net asset value (3) — — — 194 Private real asset funds measured at net asset value (3) — — — 168 Private credit measured at net asset value (3) — — — 53 Commingled funds measured at net asset value (3) — — — 1,174 Total investments 1,173 436 — 3,198 Commodity contract derivatives — 49 — 49 Total $ 1,173 $ 485 $ — $ 3,247 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 209 $ — $ 209 Interest rate swaps — 2,041 — 2,041 Commodity contract derivatives — 3 — 3 Total $ — $ 2,253 $ — $ 2,253 Notes (1) Includes obligations of government-sponsored entities. (2) Includes both U.S. and foreign debt. (3) 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. (4) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 13 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . 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 (1) Three Months Ended March 31 Six Months Ended March 31 Balance at beginning of period $ (17) $ (4) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 10 (3) Balance at March 31, 2020 $ (7) $ (7) Note (1) During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts. Therefore, the fair value measurement using significant unobservable inputs was zero at October 1, 2020, and March 31, 2021. 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 March 31, 2021, and September 30, 2020, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated values of TVA's financial instruments not recorded at fair value at March 31, 2021, and September 30, 2020, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At March 31, 2021 At September 30, 2020 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables, net (including current portion) Level 2 $ 78 $ 78 $ 87 $ 86 Loans and other long-term receivables, net (including current portion) Level 2 117 107 105 93 EnergyRight ® financing obligations (including current portion) Level 2 89 99 97 108 Unfunded loan commitments Level 2 — 1 — 2 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 24 32 26 35 Long-term outstanding power bonds (including current maturities), net Level 2 18,299 23,341 19,743 26,630 Long-term debt of VIEs (including current maturities), net Level 2 1,070 1,310 1,089 1,419 The carrying value of Cash and cash equivalents, Restricted cash and cash equivalents, Accounts receivable, net, 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 | 6 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | Other Income (Expense), Net Income and expenses not related to TVA's operating activities are summarized in the following table: Other Income (Expense), Net Three Months Ended Six Months Ended 2021 2020 2021 2020 Interest income $ 3 $ 5 $ 6 $ 10 External services 3 3 7 6 Gains (losses) on investments 2 (11) 11 (6) Miscellaneous 3 2 2 1 Total Other income (expense), net $ 11 $ (1) $ 26 $ 11 |
Benefit Plans
Benefit Plans | 6 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans TVA sponsors a qualified defined benefit plan ("pension plan") that covers most of its full-time employees hired before July 1, 2014, a qualified defined contribution plan ("401(k) plan") that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other post-employment benefits, such as workers' compensation, and the SERP. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS"), which is governed by its own board of directors. The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and six months ended March 31, 2021 and 2020, were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended March 31 For the Six Months Ended March 31 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2021 2020 2021 2020 2021 2020 2021 2020 Service cost $ 14 $ 15 $ 4 $ 4 $ 28 $ 27 $ 9 $ 8 Interest cost 93 104 4 4 184 208 8 8 Expected return on plan assets (123) (122) — — (246) (244) — — Amortization of prior service credit (25) (24) (4) (6) (49) (48) (9) (12) Recognized net actuarial loss 115 109 2 3 227 218 5 5 Total net periodic benefit cost as actuarially determined 74 82 6 5 144 161 13 9 Amount expensed / (capitalized) due to actions of regulator 2 (6) — — 9 (8) — — Total net periodic benefit cost $ 76 $ 76 $ 6 $ 5 $ 153 $ 153 $ 13 $ 9 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 2021 is $300 million. TVA contributes $25 million per month to TVARS and as of March 31, 2021, had contributed $150 million. The remaining $150 million will be contributed by September |
Contingencies and Legal Proceed
Contingencies and Legal Proceedings | 6 Months Ended |
Mar. 31, 2021 | |
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, 96 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 $13.7 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 10 — Asset Retirement Obligations . Nuclear Decommissioning . Provision for decommissioning costs of nuclear generating units is based on options prescribed by the Nuclear Regulatory Commission ("NRC") procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At March 31, 2021, $3.4 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 14 — 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 7 — Regulatory Assets and Liabilities and Note 10 — Asset Retirement Obligations . Non-Nuclear Decommissioning . At March 31, 2021, $3.6 billion, representing the discounted value of future estimated decommissioning costs, was included in AROs. 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 14 — 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 7 — Regulatory Assets and Liabilities and Note 10 — 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, greenhouse gas ("GHG") emissions, 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 and natural gas-fired generating units in general. 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 the regulation of 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 GHG requirements) could lead to additional costs of $144 million from 2021 to 2025, which include existing controls capital projects and air operations and maintenance projects. TVA also estimates additional expenditures of approximately $860 million from 2021 to 2025 relating to TVA's CCR Conversion Program, as well as expenditures of approximately $160 million from 2021 to 2025 relating to compliance with Clean Water Act requirements. Future costs could differ from these estimates if new environmental laws or regulations become applicable to TVA or the facilities it operates, or if existing environmental laws or regulations are revised or reinterpreted. There could also be costs that cannot reasonably be predicted at this time, due to uncertainty of actions that could increase these estimates. Compliance with the Environmental Protection Agency's ("EPA's") CCR rule required implementation of a groundwater monitoring program, additional engineering, and ongoing analysis. As further analyses are performed, including evaluation of monitoring results, there is the potential for additional costs for investigation and/or remediation. These costs cannot reasonably be predicted until a final remedy is selected, if necessary. Liability for releases and cleanup of hazardous substances is primarily regulated by the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), 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 releases of contaminants that TVA has addressed or is addressing consistent with state and federal requirements. At March 31, 2021 and September 30, 2020, 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 and $14 million, respectively, on a non-discounted basis, and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Additionally, the potential inclusion of new hazardous substances under CERCLA and RCRA jurisdiction may significantly affect TVA's future liability for remediating historical releases. 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 U.S. 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 were the specific medical cause of the plaintiffs' alleged injuries and damages. Other contractor employees and family members have filed lawsuits against Jacobs that are pending in the Eastern District. These pending lawsuits are stayed and raise similar claims to those being litigated in the case referenced above. While TVA is not a party to any 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 March 31, 2021, TVA had accrued $14 million of probable losses with respect to Legal Proceedings. Of the accrued amount, $12 million is included in Other long-term liabilities and $2 million is included in Accounts payable and accrued liabilities. In addition, TVA believes that it is reasonably possible that it may incur additional losses, in an amount expected not to exceed $30 million, in connection with current Legal Proceedings. No assurance can be given that TVA will not be subject to significant additional claims and liabilities. If actual liabilities significantly exceed the estimates made, TVA's results of operations, liquidity, and financial condition could be materially adversely affected. Environmental Agreements . In April 2011, TVA entered into two substantively similar agreements, one with the EPA and the other with Alabama, Kentucky, North Carolina, Tennessee, and three environmental advocacy groups: the Sierra Club, the National Parks Conservation Association, and Our Children's Earth Foundation (collectively, the "Environmental Agreements"). 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 $280 million as of March 31, 2021. Additionally, TVA holds restricted cash in an interest earning trust to fund the remaining project commitments. Under the Environmental Agreements, any interest earned through the trust must also be spent on agreed upon environmental projects. The total remaining committed spend, including interest earned through the trust, is approximately $11 million as of March 31, 2021. In exchange for these commitments, most past claims against TVA based on alleged New Source Review ("NSR") 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 March 31, 2021, 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 March 31, 2021 Consolidated Balance Sheets and will be recovered in rates in future periods. 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. Briefing on complementary motions to dismiss filed by TVA and Jacobs closed July 1, 2020. The motions were referred to the magistrate judge for recommended dispositions, and in February 2021, the magistrate recommended the dismissal of all claims, except the plaintiff’s temporary nuisance claim. TVA and Jacobs filed objections to the recommendation to retain the temporary nuisance claim, and the plaintiff filed a motion for leave to file an amended complaint that alleged only a nuisance claim. On March 29, 2021, the district court issued an opinion adopting the magistrate’s recommendations and granting the plaintiff leave to file an amended complaint, which the plaintiff did. On April 20, 2021, TVA and Jacobs filed motions to dismiss the amended complaint. Briefing on the motions is expected to close in May 2021. Case Involving Tennessee River Boat Accident . In July 2015, plaintiffs filed suit in the U.S. 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 Northern District 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 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. In April 2019, the Supreme Court issued its opinion reversing the judgment of the Eleventh Circuit and remanding the case to the Eleventh Circuit. In July 2019, the Eleventh Circuit remanded the case to the district court for further proceedings consistent with the Supreme Court's opinion. TVA filed a motion for summary judgment on all of the plaintiffs’ claims on November 23, 2020, and the plaintiffs filed a motion for partial summary judgment. The court cancelled the trial scheduled for February 16, 2021, and stated that the trial would be rescheduled, if necessary, following the court’s ruling on the parties’ summary judgment motions. On April 9, 2021, the court issued a memorandum opinion and order granting in part and denying in part TVA’s summary judgment motion. The court denied in full the plaintiffs’ summary judgment motion. The court also asked the parties to agree on a trial date in August 2021, and the parties submitted an agreed trial date of August 19, 2021 to the court. The court has yet to issue an order setting the trial date. The parties also jointly requested that the court refer the case to a judicially-hosted mediation. The court agreed to the parties’ request and referred the case to a magistrate judge for a mediation, which has been scheduled for May 27, 2021. Case Involving Bellefonte Nuclear Plant. In November 2018, Nuclear Development, LLC, filed suit against TVA in the Northern District of Alabama. The plaintiff alleges that TVA breached its agreement to sell Bellefonte to the plaintiff. The plaintiff seeks, among other things, (1) an injunction requiring TVA to maintain Bellefonte and the associated NRC permits until the case is concluded, (2) an order compelling TVA to complete the sale of Bellefonte to the plaintiff, and (3) if the court does not order TVA to complete the sale, monetary damages in excess of $30 million. In December 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 in February 2019. In May 2019, the court denied TVA's motion. On September 23, 2020, the parties filed competing motions for summary judgment. On March 31, 2021, the court denied both parties' summary judgment motions. The court ruled as a matter of law that it would have been illegal under Section 101 of the Atomic Energy Act for TVA to close, relying on past NRC precedent to reach that conclusion. Notwithstanding the legal rulings, the court held that there are disputed issues of material fact on whether TVA satisfied its contractual obligations to use reasonable best efforts and to cooperate with Nuclear Development, LLC, in effectuating the close of the sale. Trial is currently scheduled to begin on May 16, 2021. Case Involving Rate Changes . On June 9, 2020, a proposed class action lawsuit was filed against TVA and one of its LPCs, Bristol Virginia Utilities Authority ("BVUA"), 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. TVA and BVUA filed motions to dismiss the case on November 9, 2020, and filed supplemental motions to dismiss on December 21, 2020, in response to an amended complaint filed by the plaintiff. Oral argument on the motions was held on February 18, 2021, and on March 19, 2021, the court granted TVA’s and BVUA's motions to dismiss. The plaintiff appealed the district court's judgment to the U.S. Court of Appeals for the Fourth Circuit on April 15, 2021. Appellate proceedings are expected to occur this spring and summer. Cases Involving Long-Term Agreements . On August 17, 2020, the Southern Environmental Law Center ("SELC") filed a lawsuit in the United States District Court for the Western District of Tennessee on behalf of three environmental groups alleging that, beginning in August 2019, TVA violated the National Environmental Policy Act ("NEPA") and Section 10 of the TVA Act by offering a Long-Term Agreement ("LTA") to its LPCs. The environmental groups represented by SELC are Protect Our Aquifer, Energy Alabama, and Appalachian Voices. The environmental groups claim that TVA violated NEPA because (1) TVA failed to perform an environmental review of the LTAs, which harmed the groups' advocacy efforts and their ability to participate in and to inform TVA's decision, and (2) the LTAs will have a negative effect on the environment by increasing TVA's reliance on coal and gas and impeding TVA's customers' efforts to institute renewable energy options. The groups also claim that the LTAs violate Section 10 of the TVA Act, which authorizes TVA to enter into power contracts "for a term not exceeding twenty years," because, the groups allege, the twenty-year rolling contract with a twenty-year notice of termination requirement makes the LTAs effectively "never ending." The environmental groups request the federal court to (1) declare that TVA's entry into long-term power agreements without preparing an environmental review violated NEPA and the TVA Act, (2) vacate the long-term contracts, and (3) enjoin TVA from implementing "system-wide energy contract programs that significantly affect the environment." TVA filed a motion to dismiss the case on October 20, 2020, and filed a supplemental motion to dismiss on December 4, 2020, in response to an amended complaint filed by the plaintiffs. Oral argument on the motion was held on February 26, 2021. On January 28, 2021, TVA was served with a lawsuit filed by the Glasgow Electric Plant Board ("GEPB") against TVA in the United States District Court for the Western District of Kentucky seeking to rescind its LTA. The lawsuit advanced multiple legal theories in asking the court to rescind the LTA, declare it null and void, or, in the alternative, reinstate GEPB's 90-day review period under the LTA. The issues raised by GEPB were limited to its contract with TVA, and the lawsuit did not seek relief that would apply to other customers. On February 12, 2021, GEPB voluntarily dismissed all claims filed against TVA, thus ending the lawsuit. |
Revenue (Notes)
Revenue (Notes) | 6 Months Ended |
Mar. 31, 2021 | |
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 92 percent of TVA's revenue from sales of electricity for the three and six months ended March 31, 2021 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 maintain long-term partnerships with LPCs, Pandemic Relief Credits created to support LPCs and strengthen the public power response to the COVID-19 pandemic, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. Directly served customers Directly served customers, including industrial customers, federal agencies, and other customers, take power for their own consumption. Similar to LPCs, power is delivered to a delivery point, at which time the customer takes possession and TVA recognizes revenue. For all power sales, the performance obligation to deliver power is satisfied in a series over time since the sales of electricity over the term of the customer contract are a series of distinct goods that are substantially the same and have the same pattern of transfer to the customer. TVA has no continuing performance obligations subsequent to delivery. Using the output method for revenue recognition provides a faithful depiction of the transfer of electricity as customers obtain control of the power and benefit from its use at delivery. Additionally, TVA has an enforceable right to consideration for energy delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which TVA is entitled for the energy delivered. The amount of revenue is based on contractual prices approved by the TVA Board. Customers are invoiced monthly for power delivered as measured by meters located at the delivery points. The net transaction price is offset by certain credits available to customers that are known at the time of billing. Examples of credits include items such as economic development credits to promote growth in the Tennessee Valley, Pandemic Relief Credits created to support directly served customers and strengthen the public power response to the COVID-19 pandemic, and demand response credits allowing TVA to reduce industrial customer usage in periods of peak demand to balance system demand. Payments are typically due within approximately one month of invoice issuance. Other Revenue Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, and certain other ancillary goods or services. Disaggregated Revenues During the three and six months ended March 31, 2021, revenues generated from TVA's electricity sales were $2.5 billion and $4.8 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and six months ended March 31, 2021 and 2020, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended March 31 Six Months Ended March 31 2021 2020 2021 2020 Alabama $ 379 $ 360 $ 713 $ 729 Georgia 66 64 124 127 Kentucky 157 158 294 315 Mississippi 237 227 449 464 North Carolina 18 19 34 37 Tennessee 1,663 1,648 3,164 3,324 Virginia 11 12 21 23 Subtotal 2,531 2,488 4,799 5,019 Off-system sales 2 1 4 2 Revenue from sales of electricity 2,533 2,489 4,803 5,021 Other revenue 39 32 73 78 Total operating revenues $ 2,572 $ 2,521 $ 4,876 $ 5,099 TVA's operating revenues by customer type for the three and six months ended March 31, 2021 and 2020, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended March 31 Six Months Ended March 31 2021 2020 2021 2020 Revenue from sales of electricity Local power companies $ 2,337 $ 2,301 $ 4,428 $ 4,658 Industries directly served 168 160 322 310 Federal agencies and other 28 28 53 53 Revenue from sales of electricity 2,533 2,489 4,803 5,021 Other revenue 39 32 73 78 Total operating revenues $ 2,572 $ 2,521 $ 4,876 $ 5,099 TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. In 2019, the TVA Board approved a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts have a 20-year termination notice provision that renews each year after their initial effective date, contingent upon certain circumstances, including limited rate increases going forward. Participating LPCs 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. The total wholesale bill credits to LPCs participating in the long-term Partnership Agreement were $48 million and $36 million, respectively, for the three months ended March 31, 2021 and 2020. The total wholesale bill credits to LPCs participating in the long-term Partnership Agreement were $90 million and $70 million, respectively, for the six months ended March 31, 2021 and 2020. 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 May 3, 2021, 142 LPCs had signed the 20-year Partnership Agreement with TVA, and 71 LPCs had signed a Flexibility Agreement. In August 2020, the TVA Board approved a Pandemic Relief Credit which became effective beginning October 2020. The 2.5 percent monthly base rate credit, expected to approximate $200 million in total for 2021, applies to service provided to TVA's LPCs, their large commercial and industrial customers, and TVA directly served customers. Pandemic Relief Credits were $55 million and $104 million, respectively, for the three and six months ended March 31, 2021. There were no Pandemic Relief Credits for the three and six months ended March 31, 2020. The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and six months ended March 31, 2021, and the percentage those revenues comprised of TVA's total operating revenues for the same periods, are summarized in the tables below: TVA Local Power Company Contracts At or for the Three Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 1,934 75.2 % 5-year termination notice 11 403 15.7 % Total 153 $ 2,337 90.9 % 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 At or for the Six Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 3,654 74.9 % 5-year termination notice 11 774 15.9 % Total 153 $ 4,428 90.8 % 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 each accounted for eight percent of TVA's total operating revenues for both the six months ended March 31, 2021 and the six months ended March 31, 2020. Certain LPCs, including MLGW, are evaluating options for future energy choices. In addition, in January 2021, four LPCs accounting for four percent of TVA's total operating revenues for the six months ended March 31, 2021, filed a complaint and petition with the Federal Energy Regulatory Commission ("FERC") asking FERC to order TVA to provide transmission and interconnection service to the LPCs or other suppliers that want to serve them. See Note 19 — Contingencies and Legal Proceedings — Legal Proceedings — Challenge to Anti-Cherrypicking Amendment . 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 March 31, 2021. 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. Economic Development Incentives. Under certain economic development programs, TVA offers incentives to existing and potential power customers in targeted business sectors that make multi-year commitments to invest in the Tennessee Valley. TVA records those incentives as reductions of revenue. Incentives recorded as a reduction to revenue were $82 million and $84 million for the three months ended March 31, 2021 and 2020, respectively. Incentives recorded as a reduction to revenue were $156 million and $160 million for the six months ended March 31, 2021 and 2020, respectively. Incentives that have been approved but have not been paid are recorded in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. At March 31, 2021, and September 30, 2020, the outstanding unpaid incentives were $170 million and $172 million, respectively. Incentives that have been paid out may be subject to claw back if the customer fails to meet certain program requirements. Additionally, in May 2020, TVA established flexibility provisions to support the continued operations and recovery of participating customers experiencing financial and operational hardships as a result of the COVID-19 pandemic and corresponding economic downturn. These provisions were made available through the December 2020 |
Plant Closures (Notes)
Plant Closures (Notes) | 6 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |
Plant Closures Disclosure | Plant Closures Background TVA must continuously evaluate all generating assets to ensure an optimal energy portfolio that provides safe, clean, and reliable power while maintaining flexibility and fiscal responsibility to the people of the Tennessee Valley. During 2019, the TVA Board approved the Integrated Resource Plan, which recommended an action to evaluate the engineering end-of-life of aging fossil units. These assessments consider material condition, plant performance, system flexibility needs, environmental impacts, grid support, and other factors. Based on results of assessments presented to the TVA Board in 2019, the retirement of Paradise Fossil Plant ("Paradise") Unit 3 by December 2020 and Bull Run Fossil Plant ("Bull Run") by December 2023 was approved. Subsequent to the TVA Board approval, TVA determined that Paradise would not be restarted after January 2020 due to the plant's material condition. Paradise Fossil Plant Unit 3 was taken offline on February 1, 2020, effectively retiring the plant. Financial Impact TVA's policy is to adjust depreciation rates to reflect the most current assumptions, ensuring units will be fully depreciated by the applicable retirement dates. As a result of TVA's decision to accelerate the retirements of Paradise and Bull Run, TVA has recognized a cumulative $1.0 billion of accelerated depreciation. Of this amount, $34 million and $91 million was recognized during the three months ended March 31, 2021 and 2020, respectively, and $67 million and $316 million was recognized during the six months ended March 31, 2021 and 2020, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue Recognition [Line Items] | |||
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 approximately 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 United States Department of the Treasury ("U.S. Treasury") as a return on the government's appropriation investment in TVA's power facilities (the "Power Program Appropriation Investment"). In the 1998 Energy and Water Development Appropriations Act, Congress directed TVA to fund essential stewardship activities related to its management of the Tennessee River system and nonpower or stewardship properties with power revenues in the event that there were insufficient appropriations or other available funds to pay for such activities in any fiscal year. Congress has not provided any appropriations to TVA to fund such activities since 1999. Consequently, during 2000, TVA began paying for essential stewardship activities primarily with power revenues, with the remainder funded with user fees and other forms of revenues derived in connection with those activities. The activities related to stewardship properties do not meet the criteria of an operating segment under accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, these assets and properties are included as part of the power program, TVA's only operating segment. | ||
Fiscal Year | Fiscal Year TVA's fiscal year ends September 30. Years (2021, 2020, 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, 2020, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2020 (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 and variable interest entities ("VIEs") of which TVA is the primary beneficiary. See Note 8 — Variable Interest Entities | ||
Use of Estimates | Use of EstimatesThe 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 Coronavirus Disease 2019 ("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 19 — 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 March 31, 2021 At September 30, 2020 Cash and cash equivalents $ 500 $ 500 Restricted cash and cash equivalents included in Other long-term assets 19 21 Total cash, cash equivalents, and restricted cash $ 519 $ 521 Due to higher volatility in the financial markets associated with the COVID-19 pandemic, TVA increased its target balance of Cash and cash equivalents beginning in March 2020. TVA may continue to hold higher balances in future periods due to potential market volatility. | 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 March 31, 2021 At September 30, 2020 Cash and cash equivalents $ 500 $ 500 Restricted cash and cash equivalents included in Other long-term assets 19 21 Total cash, cash equivalents, and restricted cash $ 519 $ 521 | |
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 is 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 As described in Note 2 — Impact of New Accounting Standards and Interpretations , TVA adopted Financial Instruments - Credit Losses on October 1, 2020, using a modified retrospective method through a cumulative-effect adjustment to retained earnings. The standard, Current Expected Credit Losses ("CECL"), requires TVA to recognize an allowance that reflects the current estimate for credit losses expected to be incurred over the life of the financial assets based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amounts. TVA has reviewed the current portfolio of financial receivables and developed a methodology to reasonably measure the estimate of credit losses for each major financial receivable type. The appropriateness of the allowance is evaluated at the end of each reporting period. TVA continues to monitor the impact of the COVID-19 pandemic on accounts and loans receivable balances to evaluate the allowance for uncollectible accounts. To determine the allowance for trade receivables, TVA considers historical experience and other currently available information, including events such as customer bankruptcy and/or a customer failing to fulfill payment arrangements by the due date. TVA's corporate credit department also performs an assessment of the financial condition of customers and the credit quality of the receivables. In addition, TVA reviews other reasonable and supportable forecasts to determine if the allowance for uncollectible amounts should be further adjusted in accordance with the accounting guidance for CECL. To determine the allowance for loans receivables, TVA aggregates loans into the appropriate pools based on the existence of similar risk characteristics such as collateral types and internal assessed credit risks. In situations where a loan exhibits unique risk characteristics and is no longer expected to experience similar risks to the rest of its pool, the loan will be evaluated separately. TVA derives an annual loss rate based on historical loss and then adjusts the rate to reflect TVA's consideration of available information on current conditions and reasonable and supportable future forecasts. This information may include economic and business conditions, default trends, and other internal and external factors. For periods beyond the reasonable and supportable forecast period, TVA uses the current calculated long-term average historical loss rate for the remaining life of the loan portfolio. The allowance for uncollectible accounts was less than $1 million at both March 31, 2021, and September 30, 2020, for trade accounts receivable. Additionally, loans receivable of $117 million and $105 million at March 31, 2021, and September 30, 2020, respectively, are included in Accounts receivable, net and Other long-term assets, for the current and long-term portions, respectively. Loans receivables are reported net of allowances for uncollectible accounts of $5 million and less than $1 million at March 31, 2021, and September 30, 2020, respectively. The increase in allowances for uncollectible accounts is due to the adoption of CECL. See Note 2 - Impact of New Accounting Standards and Interpretations. | ||
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 approximately every five years, with a study currently being performed in 2021. Depreciation expense was $346 million and $407 million for the three months ended March 31, 2021 and 2020, respectively. Depreciation expense was $691 million and $946 million for the six months ended March 31, 2021 and 2020, respectively. See Note 5 — Plant Closures |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 6 Months Ended |
Mar. 31, 2021 | |
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. |
Impact of New Accounting Stan_2
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 2021: 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. Effective Date for TVA October 1, 2020 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a modified retrospective method through a cumulative-effect adjustment to retained earnings on October 1, 2020. TVA recorded an initial transition adjustment of $4 million to retained earnings. The adoption of this standard did not materially impact TVA's financial condition, results of operations, or cash flows. Fair Value Measurement Disclosure Description This 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 October 1, 2020 Effect on the Financial Statements or Other Significant Matters Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. The following accounting standard has been issued but at March 31, 2021, was not effective and had not been adopted by TVA: Reference Rate Reform Description This 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 does not expect the adoption of this standard to have a material impact on TVA's financial condition, results of operations, or cash flows. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 At September 30, 2020 Power receivables $ 1,204 $ 1,401 Other receivables 80 128 Accounts receivable, net (1) $ 1,284 $ 1,529 Note (1) Allowance for uncollectible accounts was less than $1 million at March 31, 2021, and September 30, 2020, and therefore is not represented in the table above. The allowance at March 31, 2021 includes the impact from adopting CECL on October 1, 2020. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA's inventories: Inventories, Net At March 31, 2021 At September 30, 2020 Materials and supplies inventory $ 767 $ 770 Fuel inventory 263 253 Renewable energy certificates inventory, net 18 15 Allowance for inventory obsolescence (34) (35) Inventories, net $ 1,014 $ 1,003 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 (in millions) At March 31, 2021 At September 30, 2020 Loans and other long-term receivables, net $ 109 $ 100 EnergyRight ® receivables, net 62 69 Prepaid long-term service agreements 54 42 Commodity contract derivative assets 5 23 Restricted cash and cash equivalents 19 21 Prepaid capacity payments 8 11 Other 61 59 Total other long-term assets $ 318 $ 325 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Components of regulatory assets and regulatory liabilities are summarized in the table below. Regulatory Assets and Liabilities At March 31, 2021 At September 30, 2020 Current regulatory assets Unrealized losses on interest rate derivatives $ 114 $ 114 Unrealized losses on commodity derivatives — 4 Fuel cost adjustment receivable 41 12 Total current regulatory assets 155 130 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 5,009 5,193 Non-nuclear decommissioning costs 2,604 2,512 Unrealized losses on interest rate derivatives 986 1,506 Nuclear decommissioning costs 482 896 Unrealized losses on commodity derivatives 4 — Other non-current regulatory assets 145 138 Total non-current regulatory assets 9,230 10,245 Total regulatory assets $ 9,385 $ 10,375 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 115 $ 115 Unrealized gains on commodity derivatives 26 26 Total current regulatory liabilities 141 141 Non-current regulatory liabilities Unrealized gains on commodity derivatives 5 23 Total regulatory liabilities $ 146 $ 164 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Text Block [Abstract] | |
Schedule of Variable Interest Entities | The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG at March 31, 2021, and September 30, 2020, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At March 31, 2021 At September 30, 2020 Current liabilities Accrued interest $ 10 $ 10 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 42 41 Total current liabilities 55 54 Other liabilities Other long-term liabilities 21 23 Long-term debt, net Long-term debt of variable interest entities, net 1,028 1,048 Total liabilities $ 1,104 $ 1,125 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 At September 30, 2020 Interest rate swap liabilities $ 1,398 $ 1,927 Operating lease liabilities 143 171 Currency swap liabilities 21 123 EnergyRight ® financing obligations 71 78 Accrued long-term service agreements 40 56 Other 194 193 Total other long-term liabilities $ 1,867 $ 2,548 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity Nuclear Non-Nuclear Total Balance at September 30, 2020 $ 3,278 $ 3,507 $ 6,785 (1) Settlements (3) (77) (80) Revisions in estimate 2 106 108 Accretion (recorded as regulatory asset) 74 31 105 Balance at March 31, 2021 $ 3,351 $ 3,567 $ 6,918 (1) Note (1) Includes $271 million and $345 million at March 31, 2021, and September 30, 2020, respectively, in Current liabilities. The revisions in non-nuclear estimates increased $106 million for the six months ended March 31, 2021. These increases were primarily driven by revisions of certain CCR closure liabilities at Shawnee, Paradise, and Colbert, resulting from revised engineering estimates for construction costs, new vendor bids, modified closure designs, and expected costs associated with post-closure care of the closed areas. |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Total debt outstanding at March 31, 2021, and September 30, 2020, consisted of the following: Debt Outstanding At March 31, 2021 At September 30, 2020 Short-term debt Short-term debt, net $ 1,241 $ 57 Current maturities of power bonds issued at par (1) 304 1,787 Current maturities of long-term debt of VIEs issued at par 42 41 Total current debt outstanding, net 1,587 1,885 Long-term debt Long-term power bonds (2) 18,112 18,078 Long-term debt of VIEs, net 1,028 1,048 Unamortized discounts, premiums, issue costs, and other (117) (122) Total long-term debt, net 19,023 19,004 Total debt outstanding $ 20,610 $ 20,889 Notes (1) Includes net exchange gain from currency transactions of $56 million and $73 million at March 31, 2021, and September 30, 2020, respectively. (2) Includes net exchange gain from currency transactions of $46 million and $80 million at March 31, 2021, and September 30, 2020, respectively. |
Debt Securities Activity | Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2020, to March 31, 2021: Debt Securities Activity Date Amount (in millions) Interest Rate Redemptions/Maturities (1) 2009 Series B December 2020 $ 1 3.77 % 2011 Series A February 2021 1,500 3.88 % Total redemptions/maturities of power bonds 1,501 Debt of variable interest entities 20 Total redemptions/maturities of debt $ 1,521 Note (1) All redemptions were at 100 percent of par. |
Risk Management Activities an_2
Risk Management Activities and Derivative Transactions (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 March 31 Six Months Ended March 31 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2021 2020 2021 2020 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 $ 22 $ (163) $ 123 $ (87) 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 March 31 Six Months Ended March 31 Derivatives in Cash Flow Hedging Relationship 2021 2020 2021 2020 Currency swaps $ 5 $ (56) $ 50 $ 3 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 $19 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 March 31 Six Months Ended March 31 Derivative Type Objective of Derivative (2) Accounting for Derivative Instrument 2021 2020 2021 2020 Interest rate swaps To fix short-term debt variable rate to a fixed rate (interest rate risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow $ (28) $ (23) $ (57) $ (44) Commodity contract derivatives To protect against fluctuations in market prices of purchased coal or natural gas (price risk) Mark-to-market gains and losses are recorded as regulatory assets or liabilities Realized gains and losses due to contract settlements are recognized in Fuel expense as incurred — — — 1 Notes (1) All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and six months ended March 31, 2021 and 2020. (2) During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts. |
Fair Value of TVA Derivatives | Fair Values of TVA Derivatives (in millions) At March 31, 2021 At September 30, 2020 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £200 million Sterling $ (58) Accounts payable and accrued liabilities $(58) $ (78) Accounts payable and accrued liabilities $(78) £250 million Sterling (8) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(4) (63) Accounts payable and accrued liabilities $(5); Other long-term liabilities $(58) £150 million Sterling (20) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(17) (68) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(65) Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (1,090) Accounts payable and accrued liabilities $(43); Accrued interest $(37); Other long-term liabilities $(1,010) $ (1,449) Accounts payable and accrued liabilities $(43); Accrued interest $(37); Other long-term liabilities $(1,369) $476 million notional (419) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(387) (588) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(556) $42 million notional (1) (3) Accounts payable and accrued liabilities $(1); Accrued interest $(1); Other long-term liabilities $(1) (4) Accounts payable and accrued liabilities $(2); Other long-term liabilities $(2) Commodity contract derivatives 27 Other current assets $27; Other long-term assets $5; Accounts payable and accrued liabilities $(1); Other long-term liabilities $(4) 46 Other current assets $26; Other long-term assets $23; Accounts payable and accrued liabilities $(3) |
Commodity Contract Derivatives | Commodity Contract Derivatives At March 31, 2021 At September 30, 2020 Number of Contracts Notional Amount Fair Value (MtM) Number of Contracts Notional Amount Fair Value ( MtM ) Natural gas contract derivatives 27 274 million mmBtu 27 42 302 million mmBtu 46 |
Offsetting Assets and Liabilities | The amounts of TVA's derivative instruments as reported on the Consolidated Balance Sheets are shown in the table below: Derivative Assets and Liabilities (1) (in millions) At March 31, 2021 At September 30, 2020 Assets Commodity derivatives not subject to master netting or similar arrangement $ 32 $ 49 Liabilities Currency swaps (2) $ 86 $ 209 Interest rate swaps (2) 1,512 2,041 Total derivatives subject to master netting or similar arrangement 1,598 2,250 Commodity derivatives not subject to master netting or similar arrangement 5 3 Total liabilities $ 1,603 $ 2,253 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 material offsetting amounts on TVA's Consolidated Balance Sheets at either March 31, 2021, or September 30, 2020. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
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 March 31 Six Months Ended March 31 Fund Financial Statement Presentation 2021 2020 2021 2020 NDT Regulatory asset $ 23 $ (357) $ 253 $ (246) ART Regulatory asset 28 (135) 120 (98) SERP Other income (expense) 1 (9) 5 (8) DCP Other income (expense) — (3) 1 (2) |
Fair Value Measurements | Fair Value Measurements (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 617 $ — $ — $ 617 Government debt securities (1) 528 32 — 560 Corporate debt securities (2) — 409 — 409 Mortgage and asset-backed securities — 30 — 30 Institutional mutual funds 222 — — 222 Forward debt securities contracts — 8 — 8 Private equity funds measured at net asset value (3) — — — 274 Private real asset funds measured at net asset value (3) — — — 215 Private credit measured at net asset value (3) — — — 62 Commingled funds measured at net asset value (3) — — — 1,326 Total investments 1,367 479 — 3,723 Commodity contract derivatives — 32 — 32 Total $ 1,367 $ 511 $ — $ 3,755 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 86 $ — $ 86 Interest rate swaps — 1,512 — 1,512 Commodity contract derivatives — 5 — 5 Total $ — $ 1,603 $ — $ 1,603 Notes (1) Includes obligations of government-sponsored entities. (2) Includes both U.S. and foreign debt. (3) 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. (4) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 13 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . Fair Value Measurements (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 500 $ — $ — $ 500 Government debt securities (1) 485 40 — 525 Corporate debt securities (2) — 356 — 356 Mortgage and asset-backed securities — 27 — 27 Institutional mutual funds 188 — — 188 Forward debt securities contracts — 13 — 13 Private equity funds measured at net asset value (3) — — — 194 Private real asset funds measured at net asset value (3) — — — 168 Private credit measured at net asset value (3) — — — 53 Commingled funds measured at net asset value (3) — — — 1,174 Total investments 1,173 436 — 3,198 Commodity contract derivatives — 49 — 49 Total $ 1,173 $ 485 $ — $ 3,247 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 209 $ — $ 209 Interest rate swaps — 2,041 — 2,041 Commodity contract derivatives — 3 — 3 Total $ — $ 2,253 $ — $ 2,253 Notes (1) Includes obligations of government-sponsored entities. (2) Includes both U.S. and foreign debt. (3) 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. (4) TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 13 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . |
Fair Value Measurements Using Significant Unobservable Inputs | he 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 (1) Three Months Ended March 31 Six Months Ended March 31 Balance at beginning of period $ (17) $ (4) Change in net unrealized gains (losses) deferred as regulatory assets and liabilities 10 (3) Balance at March 31, 2020 $ (7) $ (7) Note (1) During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts. Therefore, the fair value measurement using significant unobservable inputs was zero at October 1, 2020, and March 31, 2021. |
Estimated Values of Financial Instruments Not Recorded at Fair Value | The estimated values of TVA's financial instruments not recorded at fair value at March 31, 2021, and September 30, 2020, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At March 31, 2021 At September 30, 2020 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables, net (including current portion) Level 2 $ 78 $ 78 $ 87 $ 86 Loans and other long-term receivables, net (including current portion) Level 2 117 107 105 93 EnergyRight ® financing obligations (including current portion) Level 2 89 99 97 108 Unfunded loan commitments Level 2 — 1 — 2 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 24 32 26 35 Long-term outstanding power bonds (including current maturities), net Level 2 18,299 23,341 19,743 26,630 Long-term debt of VIEs (including current maturities), net Level 2 1,070 1,310 1,089 1,419 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | 16. Other Income (Expense), Net Income and expenses not related to TVA's operating activities are summarized in the following table: Other Income (Expense), Net Three Months Ended Six Months Ended 2021 2020 2021 2020 Interest income $ 3 $ 5 $ 6 $ 10 External services 3 3 7 6 Gains (losses) on investments 2 (11) 11 (6) Miscellaneous 3 2 2 1 Total Other income (expense), net $ 11 $ (1) $ 26 $ 11 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Components of TVA's Benefit Plans | The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and six months ended March 31, 2021 and 2020, were as follows: Components of TVA's Benefit Plans (1) For the Three Months Ended March 31 For the Six Months Ended March 31 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2021 2020 2021 2020 2021 2020 2021 2020 Service cost $ 14 $ 15 $ 4 $ 4 $ 28 $ 27 $ 9 $ 8 Interest cost 93 104 4 4 184 208 8 8 Expected return on plan assets (123) (122) — — (246) (244) — — Amortization of prior service credit (25) (24) (4) (6) (49) (48) (9) (12) Recognized net actuarial loss 115 109 2 3 227 218 5 5 Total net periodic benefit cost as actuarially determined 74 82 6 5 144 161 13 9 Amount expensed / (capitalized) due to actions of regulator 2 (6) — — 9 (8) — — Total net periodic benefit cost $ 76 $ 76 $ 6 $ 5 $ 153 $ 153 $ 13 $ 9 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
State [Table Text Block] | TVA's operating revenues by state for the three and six months ended March 31, 2021 and 2020, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended March 31 Six Months Ended March 31 2021 2020 2021 2020 Alabama $ 379 $ 360 $ 713 $ 729 Georgia 66 64 124 127 Kentucky 157 158 294 315 Mississippi 237 227 449 464 North Carolina 18 19 34 37 Tennessee 1,663 1,648 3,164 3,324 Virginia 11 12 21 23 Subtotal 2,531 2,488 4,799 5,019 Off-system sales 2 1 4 2 Revenue from sales of electricity 2,533 2,489 4,803 5,021 Other revenue 39 32 73 78 Total operating revenues $ 2,572 $ 2,521 $ 4,876 $ 5,099 | |
Revenue from External Customers by Products and Services [Table Text Block] | TVA's operating revenues by customer type for the three and six months ended March 31, 2021 and 2020, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended March 31 Six Months Ended March 31 2021 2020 2021 2020 Revenue from sales of electricity Local power companies $ 2,337 $ 2,301 $ 4,428 $ 4,658 Industries directly served 168 160 322 310 Federal agencies and other 28 28 53 53 Revenue from sales of electricity 2,533 2,489 4,803 5,021 Other revenue 39 32 73 78 Total operating revenues $ 2,572 $ 2,521 $ 4,876 $ 5,099 | |
Schedule of Long-term Contracts for Purchase of Electric Power | The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and six months ended March 31, 2021, and the percentage those revenues comprised of TVA's total operating revenues for the same periods, are summarized in the tables below: TVA Local Power Company Contracts At or for the Three Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 1,934 75.2 % 5-year termination notice 11 403 15.7 % Total 153 $ 2,337 90.9 % 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 At or for the Six Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 3,654 74.9 % 5-year termination notice 11 774 15.9 % Total 153 $ 4,428 90.8 % 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. |
Revenue Local Power Company Con
Revenue Local Power Company Contracts (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Long-term Contract for Purchase of Electric Power [Line Items] | |
Long-term Contracts or Programs Disclosure [Text Block] | The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and six months ended March 31, 2021, and the percentage those revenues comprised of TVA's total operating revenues for the same periods, are summarized in the tables below: TVA Local Power Company Contracts At or for the Three Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 1,934 75.2 % 5-year termination notice 11 403 15.7 % Total 153 $ 2,337 90.9 % 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 At or for the Six Months Ended March 31, 2021 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 142 $ 3,654 74.9 % 5-year termination notice 11 774 15.9 % Total 153 $ 4,428 90.8 % 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies General and Basis of Presentation (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2021USD ($)People | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)People | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Reclassification of Amounts on Cash Flow and Statement of Operations [Line Items] | ||||||
Cash and Cash Equivalents, at Carrying Value | $ 500 | $ 500 | $ 500 | |||
Restricted Cash and Cash Equivalents | 19 | 19 | 21 | |||
Regulatory Assets | 9,385 | 9,385 | 10,375 | |||
Appropriation-investment power program | 1,000 | |||||
Financing Receivable, after Allowance for Credit Loss | $ 107 | $ 107 | 93 | |||
Population of TVA's service area | People | 10 | 10 | ||||
Allowance for uncollectible accounts | $ 1 | $ 1 | ||||
Depreciation expense | 346 | $ 407 | 691 | $ 946 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 519 | $ 858 | $ 519 | 858 | $ 521 | $ 322 |
Cash and Cash Equivalents, Period Increase (Decrease) | $ 536 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, after Allowance for Credit Loss | $ 107 | $ 93 |
Allowance for uncollectible accounts | 1 | |
Loans and Leases Receivable, Allowance | 5 | 1 |
Carrying Value | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, after Allowance for Credit Loss | $ 117 | $ 105 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Accounts Receivable, Net | ||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,204 | $ 1,401 |
Other receivables | 80 | 128 |
Allowance for uncollectible accounts | 1 | |
Accounts receivable, net | 1,284 | $ 1,529 |
Total available Credit on the Public Power Support and Stabilization Program | 1,000 | |
Subsequent Credit on the Public Power Support and Stabilization Program | $ 1 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Inventories, Net | ||
Materials and supplies inventory | $ 767 | $ 770 |
Fuel inventory | 263 | 253 |
Renewable energy certificates/emission allowance inventory, net | 18 | 15 |
Allowance for inventory obsolescence | (34) | (35) |
Inventories, net | $ 1,014 | $ 1,003 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2020 | |
Other Long-Term Assets | ||
EnergyRight® receivables, net | $ 78 | $ 86 |
Prepaid Expense, Noncurrent | 54 | 42 |
Restricted Cash and Cash Equivalents | 19 | 21 |
Total other long-term assets | 318 | 325 |
Prepaid Expense, Current | 11 | 3 |
Deferral of EnergyRight loans | 1 | |
Loans and Leases Receivable, Allowance | 5 | 1 |
EnergyRight loan reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 2 | |
Economic development loan specific loan reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 2 | |
Economic Development Loan Collective Reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 1 | |
Accounts Receivable [Member] | ||
Other Long-Term Assets | ||
EnergyRight® receivables, net | 16 | 18 |
Other long-term assets | ||
Other Long-Term Assets | ||
Loans and other long-term receivables, net | 109 | 100 |
EnergyRight® receivables, net | 62 | 69 |
Prepaid capacity payments | 8 | 11 |
Other | 61 | 59 |
Other long-term assets | ||
Other Long-Term Assets | ||
Commodity Contract Asset, Noncurrent | $ 5 | $ 23 |
Energy Right | ||
Other Long-Term Assets | ||
Number of days in default | 180 days | |
Energy Right | Minimum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 5 years | |
Energy Right | Maximum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 10 years |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 155 | $ 130 |
Non-current regulatory assets | 9,230 | 10,245 |
Regulatory assets | 9,385 | 10,375 |
Current regulatory liabilities | 141 | 141 |
Regulatory Liability, Noncurrent | 5 | 23 |
Regulatory Liabilities | 146 | 164 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 115 | 115 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 26 | 26 |
Regulatory Liability, Noncurrent | 5 | 23 |
Unrealized losses on interest rate derivatives [Member] | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 114 | 114 |
Non-current regulatory assets | 986 | 1,506 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 0 | 4 |
Non-current regulatory assets | 4 | 0 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 41 | 12 |
Pension Costs [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 5,009 | 5,193 |
Nuclear desommissioning costs [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 482 | 896 |
Non-nuclear decommissioning [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 2,604 | 2,512 |
Other non-current regulatory assets [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 145 | $ 138 |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2013 | Sep. 30, 2012 | |
Variable Interest Entities | |||||||
Other long-term liabilities | $ 1,867 | $ 1,867 | $ 2,548 | ||||
Accrued interest | 10 | 10 | 10 | ||||
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 | $ 42 | $ 42 | 41 | ||||
Long-term debt of variable interest entities, net | 1,028 | 1,028 | 1,048 | ||||
Liabilities, Current | 4,174 | 4,174 | 4,711 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Variable Interest Entities | |||||||
Other long-term liabilities | 21 | 21 | 23 | ||||
Liabilities | 1,104 | 1,104 | 1,125 | $ 1,000 | |||
Liabilities | |||||||
Liabilities, Current | 55 | 55 | 54 | ||||
Interest Expense | 13 | $ 14 | 26 | $ 27 | |||
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 | 6 Months Ended | ||
Mar. 31, 2021 | Sep. 30, 2020 | ||
Other Long-Term Liabilities | |||
Finance Lease, Liability | $ 143 | $ 171 | |
Interest rate swap liabilities | 1,512 | 2,041 | |
Capital lease obligations | 0 | 25 | |
Currency swap liabilities | [1] | 86 | 209 |
EnergyRight® financing obligation | (99) | (108) | |
Total other long-term liabilities | 1,867 | 2,548 | |
Regulatory Liability, Noncurrent | 5 | 23 | |
Increase (Decrease) in Derivative Liabilities | (529) | ||
Deferral of EnergyRight loans | 1 | ||
Accounts payable and accrued liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | (20) | (15) | |
Interest rate swap liabilities | 114 | ||
EnergyRight® financing obligation | (18) | (19) | |
Other long-term liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | (40) | (56) | |
Interest rate swap liabilities | 1,398 | 1,927 | |
Currency swap liabilities | 21 | 123 | |
EnergyRight® financing obligation | (71) | (78) | |
Other | $ 194 | $ 193 | |
[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 13 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2020 | |
Asset Retirement Obligations | ||
Asset Retirement Obligation, Period Increase (Decrease) | $ 133 | |
Amortization and Depreciation of Decontaminating and Decommissioning Assets | 36 | |
Asset Retirement Obligation, Beginning Balance | 6,785 | |
Settlements | (80) | |
Asset Retirement Obligation, Revision of Estimate | 108 | |
Accretion (recorded as regulatory asset) | 105 | |
Asset Retirement Obligation, Ending Balance | 6,918 | |
Current portion of ARO | (271) | $ (345) |
Nuclear | ||
Asset Retirement Obligations | ||
Asset Retirement Obligation, Beginning Balance | 3,278 | |
Settlements | (3) | |
Asset Retirement Obligation, Revision of Estimate | 2 | |
Accretion (recorded as regulatory asset) | 74 | |
Asset Retirement Obligation, Ending Balance | 3,351 | |
Non-nuclear | ||
Asset Retirement Obligations | ||
Asset Retirement Obligation, Beginning Balance | 3,507 | |
Settlements | (77) | |
Asset Retirement Obligation, Revision of Estimate | 106 | |
Accretion (recorded as regulatory asset) | 31 | |
Asset Retirement Obligation, Ending Balance | $ 3,567 | |
Accounts payable and accrued liabilities | ||
Asset Retirement Obligations | ||
Current portion of ARO | $ (345) |
Debt and Other Obligations Debt
Debt and Other Obligations Debt Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Short-term debt | ||
Short-term debt, net | $ 1,241 | $ 57 |
Current maturities of power bonds | 304 | 1,787 |
Current maturities of long-term debt of variable interest entities | 42 | 41 |
Total current debt outstanding, net | 1,587 | 1,885 |
Long-term debt | ||
Long-term power bonds | 18,112 | 18,078 |
Unamortized discounts, premiums, issues costs, and other | 117 | 122 |
Total long-term debt, net | 19,023 | 19,004 |
Total outstanding debt | 20,610 | 20,889 |
Long-term debt of variable interest entities, net | 1,028 | 1,048 |
Net exchange gain from currency transaction, current | 56 | 73 |
Net exchange gain from currency transaction, noncurrent | $ 46 | $ 80 |
Debt and Other Obligations De_2
Debt and Other Obligations Debt Securities Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2019 | |||
Debt Instrument | |||||||
Total long-term debt, net | $ 19,004 | $ 19,023 | |||||
Redemptions and repurchases of power bonds | $ 1,501 | [1] | $ 1,218 | ||||
Variable Interest Entity, Financial or Other Support, Type | 20 | ||||||
Total redemptions/maturities of debt | [1] | $ (1,521) | |||||
Total | |||||||
Debt Instrument | |||||||
Percent of par value | 100.00% | ||||||
2009 Series B [Member] | |||||||
Debt Instrument | |||||||
Redemptions and repurchases of power bonds | $ 1,500 | $ 1 | |||||
Debt of variable interest entities [Member] | |||||||
Debt Instrument | |||||||
Other Debt instrument, Interest Rate, Effective Percentage | |||||||
2009 Series B [Member] | |||||||
Debt Instrument | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.88% | 3.77% | |||||
[1] | (1) All redemptions were at 100 percent of par. |
Debt and Other Obligations Cred
Debt and Other Obligations Credit Facility Agreements (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2021USD ($)Credit_facilities | Sep. 30, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||
Summary of Long-Term Credit Facilities | The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities: Summary of Long-Term Credit Facilities At March 31, 2021 (in millions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability June 2023 $ 1,000 $ 289 $ — $ 711 September 2023 1,000 326 — 674 February 2024 150 38 — 112 February 2025 500 500 — — Total $ 2,650 $ 1,153 $ — $ 1,497 | |
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 | 711 | |
Remaining Availability, June 2020 Credit Facility | 674 | |
Remaining Availability, September 2020 Credit Facility | 0 | |
Total Remaining Availability for Credit Facilities | 1,497 | |
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 | 326 | |
Letter of Credit Outstanding, September 2020 Credit Facility | 289 | |
Amount of letters of credit outstanding for credit facilities | $ 1,153 | $ 1,500 |
Debt and Other Obligations Leas
Debt and Other Obligations Lease/Leaseback Obligations (Details) $ in Millions | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) |
Sale Leaseback Transaction [Line Items] | ||
CT and QTE outstanding leaseback obligation | $ 87 | $ 223 |
Leasing transaction, number of units | 24 | |
CT and QTE outstanding leaseback obligation | $ 87 | $ 223 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||||||
Reclassification to earnings from cash flow hedges | $ (5) | $ 56 | [1] | $ (50) | [1] | $ (3) | [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 $19 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
Risk Management Activities an_3
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | ||||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | |||||||
Net unrealized gain (loss) on cash flow hedges | $ 22 | $ (163) | $ 123 | $ (87) | |||
Reclassification to earnings from cash flow hedges | $ 5 | $ (56) | [1] | 50 | [1] | $ 3 | [1] |
Reclassification to earnings from cash flow hedges in the next 12 months | $ (19) | ||||||
[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 $19 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange gain on the debt. |
Risk Management Activities an_4
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2021USD ($)Years | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)Years | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | ||||
Derivative | ||||||||
Amount recognized for unrealized gains (losses) | $ 0 | |||||||
Change in Unrealized gains (losses) on Interest Rate Derivatives | $ (386,000,000) | $ 556,000,000 | (529,000,000) | $ (385,000,000) | ||||
Interest Rate Swap | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | (28,000,000) | (23,000,000) | [1] | (57,000,000) | [1] | (44,000,000) | [1] | |
Fair value | (419,000,000) | (419,000,000) | $ (588,000,000) | |||||
Commodity Contract Derivatives | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | 0 | $ 0 | 0 | [1] | $ 1,000,000 | [1] | ||
Fair value | $ 27,000,000 | $ 27,000,000 | $ 46,000,000 | |||||
Natural Gas [Member] | ||||||||
Derivative | ||||||||
Number of contracts | 27 | 27 | 42 | |||||
Derivative, Nonmonetary Notional Amount | 274,000,000 | 274,000,000 | 302,000,000 | |||||
Fair value | $ 27,000,000 | $ 27,000,000 | $ 46,000,000 | |||||
Number Commodity Contract Term Years | Years | 3 | 3 | ||||||
[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 six months ended March 31, 2021 and 2020.(2) During the fourth quarter of 2020, TVA discontinued derivative accounting for forward coal contracts. |
Risk Management Activities an_5
Risk Management Activities and Derivative Transactions Fair Values of TVA Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Derivatives, Fair Value | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Gross amounts of recognized liabilities | 1,598 | 2,250 |
$14 million notional [Member] | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 14 | |
$28 million notional [Member] | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 28 | |
200 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (58) | (78) |
Gross amounts of recognized liabilities | 86 | 209 |
200 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (58) | (78) |
250 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (8) | (63) |
250 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (4) | (58) |
250 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (4) | (5) |
150 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (20) | (68) |
150 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (17) | (65) |
150 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (3) | (3) |
$1.0 billion notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (1,090) | (1,449) |
$1.0 billion notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1,010) | (1,369) |
$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (43) | (43) |
$1.0 billion notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (37) | (37) |
$476 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (419) | (588) |
$476 million notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (387) | (556) |
$476 million notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (22) | (22) |
$476 million notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (10) | (10) |
$42 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (3) | (4) |
$42 million notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1) | (2) |
$42 million notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1) | (2) |
$42 million notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (1) | |
Commodity contract derivatives | ||
Derivatives, Fair Value | ||
Fair value | 27 | 46 |
Commodity contract derivatives | Other long-term assets | ||
Derivatives, Fair Value | ||
Fair value | 5 | 23 |
Commodity contract derivatives | Other current assets | ||
Derivatives, Fair Value | ||
Fair value | 27 | 26 |
Commodity contract derivatives | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1) | |
Commodity contract derivatives | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (4) | (3) |
Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Risk Management Activities an_6
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2021USD ($)Bond_issues | Jun. 30, 2020Bond_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 | Mar. 31, 2021 | Sep. 30, 2020 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Natural Gas Contract Derivatives | ||
Derivative | ||
Fair value | 27 | 46 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Risk Management Activities an_8
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Offsetting Assets [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | $ 1,603 | $ 2,253 |
Gross amounts of recognized liabilities | 1,598 | 2,250 |
Total derivatives not subject to master netting or similar arrangement | 32 | 49 |
Forward Contract Derivative Asset, at Fair Value | 8 | 13 |
Derivative Liability, Not Subject to Master Netting Arrangement | 5 | 3 |
Letter of Credit | ||
Offsetting Assets [Line Items] | ||
Amount of letters of credit outstanding for credit facilities | 1,153 | 1,500 |
Currency Swap | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 86 | 209 |
Interest Rate Contract | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 1,512 | 2,041 |
Fair Value, Inputs, Level 2 | ||
Offsetting Assets [Line Items] | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Risk Management Activities an_9
Risk Management Activities and Derivative Transactions Offsetting for Derivative Liabilities (Details) $ in Millions | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020Bond_issues |
Offsetting Liabilities [Line Items] | |||
Number of currency swaps outstanding | Bond_issues | 3 | ||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,204 | $ 1,401 | |
Total derivatives not subject to master netting or similar arrangement | 32 | 49 | |
Gross amounts of recognized liabilities | 1,598 | 2,250 | |
Derivative Liability, Not Subject to Master Netting Arrangement | 5 | 3 | |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 1,603 | 2,253 | |
Forward Contract Derivative Asset, at Fair Value | 8 | 13 | |
Currency Swap | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 86 | 209 | |
Interest Rate Contract | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 1,512 | 2,041 | |
Letter of Credit | |||
Offsetting Liabilities [Line Items] | |||
Amount of letters of credit outstanding | 1,153 | 1,500 | |
Fair Value, Inputs, Level 2 | |||
Offsetting Liabilities [Line Items] | |||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Risk Management Activities a_10
Risk Management Activities and Derivative Transactions Collateral (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Likely cash collateral obligation increase | 22 | |
Collateralized Securities [Member] | ||
Derivative | ||
Derivative, Net Liability Position, Aggregate Fair Value | 1,600 | |
Derivative, Collateral, Right to Reclaim Cash | 1,100 | |
Letter of Credit | ||
Derivative | ||
Amount of letters of credit outstanding | 1,153 | 1,500 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 8 | $ 13 |
Risk Management Activities a_11
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2021USD ($)megawatts | Mar. 31, 2021USD ($)megawatts | Sep. 30, 2020USD ($) | |
Derivative | |||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,204 | $ 1,204 | $ 1,401 |
Total derivatives not subject to master netting or similar arrangement | $ 32 | $ 32 | $ 49 |
Two Largest Customer Percentage of Total Operating Revenue | 1600.00% | ||
Moody's, A1 Rating [Member] | |||
Derivative | |||
Banking Counterparties Credit Rating | A2 | ||
Natural Gas Banking Counterparties Credit Rating | A1 | ||
Moody's, Caa1 Rating [Member] | |||
Derivative | |||
Natural Gas Banking Counterparties Credit Rating | B1 | ||
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 | Mar. 31, 2021USD ($) |
Cash Flow from Hedging [Abstract] | |
Associated bond issues currency exposure | $ 600 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | |
Investment Gains (Losses) | |||||
Financing Receivable, after Allowance for Credit Loss | $ 107 | $ 107 | $ 93 | ||
Balance in NDT | $ 2,600 | $ 2,600 | |||
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 | $ 3,723 | $ 3,723 | $ 3,198 | ||
LTDCP [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 0 | $ 3 | (1) | $ 2 | |
SERP | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (1) | 9 | (5) | 8 | |
ART [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (28) | 135 | (120) | 98 | |
NDT [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | (23) | $ 357 | 253 | $ 246 | |
Equity Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 220 | 220 | |||
Real Estate Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 88 | 88 | |||
Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 44 | 44 | |||
Private Equity Funds [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 129 | 129 | |||
Private real estate funds [Member] | |||||
Investment Gains (Losses) | |||||
Fair value plan assets gross | 69 | 69 | |||
Private Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | $ 22 | $ 22 |
Fair Value Measurements Fair _2
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Mar. 31, 2021USD ($) |
Nonperformance Risk | |
Derivative Credit Risk Valuation Adjustment, Derivative Assets | $ 1 |
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities | $ 1 |
Fair Value Measurements Fair _3
Fair Value Measurements Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financing Receivable, after Allowance for Credit Loss | $ 107 | $ 93 | ||
Investments | ||||
Equity securities | 617 | 500 | ||
Government debt securities | 560 | 525 | ||
Corporate debt securities | 409 | 356 | ||
Mortgage and asset-backed securities | 30 | 27 | ||
Institutional mutual funds | 222 | 188 | ||
Forward debt securities contracts | 8 | 13 | ||
Private credit measured at net asset value | 62 | 53 | ||
Private equity funds measured at net asset value(1) | 274 | 194 | [1] | |
Private real estate funds measured at net asset value(1) | 215 | 168 | [1] | |
Commingled funds measured at net asset value(1) | 1,326 | 1,174 | [1] | |
Total investments | 3,723 | 3,198 | ||
Commodity contract derivatives | 32 | 49 | ||
Total | 3,755 | 3,247 | ||
Liabilities | ||||
Currency swaps | [2] | 86 | 209 | |
Interest rate swaps | 1,512 | 2,041 | ||
Commodity contract derivatives | 5 | 3 | ||
Total | 1,603 | 2,253 | ||
Decommissioning Fund Investments | 1,000 | |||
Balance in NDT | 2,600 | |||
Fair Value, Inputs, Level 1 | ||||
Investments | ||||
Equity securities | 617 | 500 | ||
Government debt securities | 528 | 485 | ||
Corporate debt securities | 0 | 0 | ||
Mortgage and asset-backed securities | 0 | 0 | ||
Institutional mutual funds | 222 | 188 | ||
Forward debt securities contracts | 0 | 0 | ||
Private credit measured at net asset value | 0 | 0 | ||
Private equity funds measured at net asset value(1) | [1] | 0 | ||
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 | 1,367 | 1,173 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 1,367 | 1,173 | ||
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 | 32 | 40 | ||
Corporate debt securities | 409 | 356 | ||
Mortgage and asset-backed securities | 30 | 27 | ||
Institutional mutual funds | 0 | 0 | ||
Forward debt securities contracts | 8 | 13 | ||
Private credit measured at net asset value | 0 | 0 | ||
Private equity funds measured at net asset value(1) | [1] | 0 | ||
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 | 479 | 436 | ||
Commodity contract derivatives | 32 | 49 | ||
Total | 511 | 485 | ||
Liabilities | ||||
Currency swaps | 86 | 209 | [2] | |
Interest rate swaps | 1,512 | 2,041 | ||
Commodity contract derivatives | 5 | 3 | ||
Total | 1,603 | 2,253 | ||
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) | [1] | 0 | ||
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 | 0 | 0 | ||
Total | 0 | 0 | ||
Liabilities | ||||
Currency swaps | 0 | 0 | [2] | |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | $ 0 | $ 0 | ||
[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 13 — 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) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Commodity contract derivatives | $ 32 | $ 49 | |||
Commodity contract derivatives | 5 | 3 | |||
Fair Value, Inputs, Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Commodity contract derivatives | 0 | 0 | |||
Commodity contract derivatives | 0 | 0 | |||
Commodity Contract Derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Balance | $ (7) | $ 0 | $ (17) | $ (4) | |
Net unrealized gains (losses) deferred as regulatory assets and liabilities | $ 10 | $ (3) |
Fair Value Measurements Estimat
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables, net (including current portion) | $ 78 | $ 86 |
Loans and other long-term receivables, net (including current portion) | 107 | 93 |
EnergyRight® financing obligations (including current portion) | 99 | 108 |
Unfunded loan commitments | 1 | 2 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 32 | 35 |
Long-term outstanding power bonds (including current maturities), net | 23,341 | 26,630 |
Long-term debt of VIEs (including current maturities), net | 1,310 | 1,419 |
Carrying Value | ||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables, net (including current portion) | 78 | 87 |
Loans and other long-term receivables, net (including current portion) | 117 | 105 |
EnergyRight® financing obligations (including current portion) | 89 | 97 |
Unfunded loan commitments | 0 | 0 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 24 | 26 |
Long-term outstanding power bonds (including current maturities), net | 19,743 | |
Long-term debt of VIEs (including current maturities), net | 18,299 | $ 1,089 |
Long-term notes payable (including current maturities) | $ 1,070 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Other Income (Expense), Net | ||||
External services | $ 3 | $ 3 | $ 7 | $ 6 |
Interest income | 3 | 5 | 6 | 10 |
Gains (losses) on investments | 2 | (11) | 11 | (6) |
Miscellaneous | 3 | 2 | 2 | 1 |
Total other income (expense), net | $ 11 | $ (1) | $ 26 | $ 11 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)plans | Mar. 31, 2020USD ($) | |
Retirement Plan Disclosure | ||||
Number of unfunded post-retirement health care plans | plans | 2 | |||
Pension Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 14 | $ 15 | $ 28 | $ 27 |
Interest cost | 93 | 104 | 184 | 208 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (123) | 122 | (246) | 244 |
Amortization of prior service cost | (25) | (24) | (49) | (48) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 115 | (109) | 227 | (218) |
Net periodic benefit cost as acutarially determined | 74 | 82 | 144 | 161 |
Amount capitalized due to actions of regulator | (2) | 6 | (9) | (8) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 76 | 76 | 153 | 153 |
Other Postretirement Benefit Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | 4 | 4 | 9 | 8 |
Interest cost | 4 | 4 | 8 | 8 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 0 | 0 | 0 | |
Amortization of prior service cost | (4) | (6) | (9) | (12) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 2 | (3) | 5 | (5) |
Net periodic benefit cost as acutarially determined | 6 | 5 | 13 | 9 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 6 | $ 5 | $ 13 | $ 9 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 150 | |||
Pension Benefits | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 14 | $ 15 | 28 | $ 27 |
Interest cost | 93 | 104 | 184 | 208 |
Expected return on plan assets | 123 | (122) | 246 | (244) |
Amortization of prior service cost | (25) | (24) | (49) | (48) |
Recognized net actuarial loss | (115) | 109 | (227) | 218 |
Total net periodic benefit cost as actuarially determined | 74 | 82 | 144 | 161 |
Amount capitalized due to actions of regulator | 2 | (6) | 9 | 8 |
Total net periodic benefit cost | 76 | 76 | 153 | 153 |
Other Post-retirement Benefits | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 13 | |||
Service cost | 4 | 4 | 9 | 8 |
Interest cost | 4 | 4 | 8 | 8 |
Expected return on plan assets | 0 | 0 | 0 | |
Amortization of prior service cost | (4) | (6) | (9) | (12) |
Recognized net actuarial loss | (2) | 3 | (5) | 5 |
Total net periodic benefit cost as actuarially determined | 6 | 5 | 13 | 9 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Total net periodic benefit cost | $ 6 | $ 5 | $ 13 | $ 9 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Mar. 31, 2021 | |
Retirement Plan Disclosure | ||
Remaining Employer Contributions | $ 150 | |
Other Pension Plan | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 150 | |
defined benefit plan, plan assets, monthly contributions by employer | 25 | |
Other Post-retirement Benefits | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 13 | |
SERP | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | $ 5 | |
Rebates [Member] | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 1 | |
401K [Member] | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | $ 48 | |
Minimum | Other Pension Plan | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | $ 300 |
Contingencies and Legal Proce_2
Contingencies and Legal Proceedings Contingencies (Details) | 6 Months Ended | |
Mar. 31, 2021USD ($)Insurance_layersProceduresreactors | Sep. 30, 2020USD ($) | |
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 | 96 | |
Nuclear accident assessment limitation per year per unit | $ 20,000,000 | |
Maximum assessment per nuclear incident | 963,000,000 | |
Total amount of protection available | 13,700,000,000 | |
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 | $ 6,918,000,000 | $ 6,785,000,000 |
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 | $ 144,000,000 | |
Possible additional future costs for compliance with CCR requirements | 860,000,000 | |
Possible additional future costs for compliance with Clean Water requirements. | 160,000,000 | |
Estimated liability for cleanup and environmental work | 15,000,000 | 14,000,000 |
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 | 1,310,000,000 | 1,419,000,000 |
Legal loss contingency accrual | $ 12,000,000 | |
The U.S. Congress is required to take action if these layes are exhausted | Insurance_layers | 2 | |
Nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | $ 3,351,000,000 | 3,278,000,000 |
Non-nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 3,567,000,000 | $ 3,507,000,000 |
Environmental Agreements | ||
Loss Contingencies | ||
Amount invested in certain environmental projects | 280,000,000 | |
General | ||
Loss Contingencies | ||
Long-term debt of VIEs (including current maturities), net | 12,000,000 | |
Legal loss contingency accrual | 14,000,000 | |
Accounts Payable and Accrued Liabilities | $ 2,000,000 |
Contingencies and Legal Proce_3
Contingencies and Legal Proceedings Legal Proceedings (Details) | 6 Months Ended |
Mar. 31, 2021USD ($)GroupsAgreementsUnits | |
Legal Proceedings | |
Number of licensed nuclear units | Units | 7 |
Legal loss contingency accrual | $ 12,000,000 |
Amount remaining to be spent under environmental agreements [Abstract] | 11,000,000 |
General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 14,000,000 |
Environmental Agreements | |
Legal Proceedings | |
Number of similar environmental agreements entered into | Agreements | 2 |
Number of environmental agreements entered into with the EPA | Agreements | 1 |
Number of environmental agreements entered into with environmental advocacy groups | Groups | 3 |
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 | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Subsequent Event [Line Items] | |||
Redemptions and repurchases of power bonds | $ 1,501 | [1] | $ 1,218 |
Subsequent Credit on the Public Power Support and Stabilization Program | $ 1 | ||
[1] | (1) All redemptions were at 100 percent of par. |
Gallatin Coal Combustion Residu
Gallatin Coal Combustion Residual Facilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Other Long-Term Liabilities | ||
Current regulatory assets | $ 155 | $ 130 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
State [Line Items] | ||||
Electric revenue | $ (2,531) | $ (2,488) | $ (4,799) | $ (5,019) |
Sales of Electricity | 2,533 | 2,489 | 4,803 | 5,021 |
Off System Sales of Electricity | 2 | 4 | 2 | |
Other revenue | $ 39 | 32 | $ 73 | 78 |
Total long duration contract revenue recognition | 2,337 | 4,428 | ||
Revenues | $ 2,572 | 2,521 | $ 4,876 | 5,099 |
Off system sales | 1 | |||
Percent of wholesale Credit offered | 310.00% | |||
Percent of Pandemic Credit Offered | 250.00% | |||
ALABAMA | ||||
State [Line Items] | ||||
Electric revenue | (379) | (360) | $ (713) | (729) |
GEORGIA | ||||
State [Line Items] | ||||
Electric revenue | (66) | (64) | (124) | (127) |
KENTUCKY | ||||
State [Line Items] | ||||
Electric revenue | (157) | (158) | (294) | (315) |
MISSISSIPPI | ||||
State [Line Items] | ||||
Electric revenue | (237) | (227) | (449) | (464) |
NORTH CAROLINA | ||||
State [Line Items] | ||||
Electric revenue | (18) | (19) | (34) | (37) |
TENNESSEE | ||||
State [Line Items] | ||||
Electric revenue | (1,663) | (1,648) | (3,164) | (3,324) |
VIRGINIA | ||||
State [Line Items] | ||||
Electric revenue | (11) | $ (12) | (21) | $ (23) |
20-year Termination Notice [Member] | ||||
State [Line Items] | ||||
Revenues | 1,934 | 3,654 | ||
5-year termination notice [Member] | ||||
State [Line Items] | ||||
Revenues | $ 403 | $ 774 |
Revenue Customer Type (Details)
Revenue Customer Type (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2021USD ($)Units | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)Units | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($) | |
Revenue, Major Customer [Line Items] | |||||
NES's % of operating revenues | 800.00% | ||||
Sales of Electricity | $ 2,533 | $ 2,489 | $ 4,803 | $ 5,021 | |
Electric revenue | 2,531 | 2,488 | 4,799 | 5,019 | |
Off System Sales of Electricity | 2 | 4 | 2 | ||
Other revenue | 39 | 32 | 73 | 78 | |
Revenues | 2,572 | 2,521 | 4,876 | 5,099 | |
Bill credits for LTA | $ 48 | 36 | $ 90 | 70 | |
Number of LPCs signed LTA | Units | 142 | 142 | |||
Number of LPCs signed Flexibility Agreement | Units | 71 | 71 | |||
Percent of sales of electricity to LPCs | 92.00% | ||||
Pandemic Relief Credit | $ (55) | $ (104) | $ 200 | ||
lpcs [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 2,337 | 2,301 | 4,428 | 4,658 | |
industries directly served [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 168 | 160 | 322 | 310 | |
federal agencies and other [Domain] | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 28 | 28 | 53 | 53 | |
ALABAMA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 379 | 360 | 713 | 729 | |
GEORGIA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 66 | 64 | 124 | 127 | |
KENTUCKY | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 157 | 158 | 294 | 315 | |
MISSISSIPPI | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 237 | 227 | 449 | 464 | |
NORTH CAROLINA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 18 | 19 | 34 | 37 | |
TENNESSEE | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | 1,663 | 1,648 | 3,164 | 3,324 | |
VIRGINIA | |||||
Revenue, Major Customer [Line Items] | |||||
Electric revenue | $ 11 | $ 12 | $ 21 | $ 23 |
Revenue Unpaid Incentives (Deta
Revenue Unpaid Incentives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Paid Economic Incentives | $ 82 | $ 84 | $ 156 | $ 160 | |
Unpaid Economic Incentives | $ (170) | $ (170) | $ (172) |
Revenue Local Power Company C_2
Revenue Local Power Company Contracts (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021USD ($)Units | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)Units | Mar. 31, 2020USD ($) | |
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 2,572 | $ 2,521 | $ 4,876 | $ 5,099 |
Total long-duration contracts revenue recognition | 2,337 | 4,428 | ||
Total percentage of operating revenues | 90.90% | 90.80% | ||
Number of LPCs signed LTA | Units | 142 | 142 | ||
Total Number of LPCs | Units | 153 | 153 | ||
Percent of op revenues of LPCs who filed complaint with FERC | 400.00% | |||
5-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 403 | $ 774 | ||
Percentage of total operating revenues | 15.70% | 15.90% | ||
Number of LPCs signed LTA | Units | 11 | 11 | ||
20-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 1,934 | $ 3,654 | ||
Percentage of total operating revenues | 75.20% | 74.90% |
Plant Closures (Details)
Plant Closures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 24 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Accelerated depreciation | $ 34,000,000 | $ 91,000,000 | $ 67,000,000 | $ 316,000,000 | $ 1,000,000,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Sep. 30, 2020 |
Amounts Recognized on TVA's Consolidated Balance Sheet [Line Items] | ||
Operating Lease, Liability, Current | $ 525 | |
Operating Lease, Liability, Noncurrent | $ 720 |