DEI Document
DEI Document shares in Millions | 9 Months Ended |
Jun. 30, 2022 shares | |
DEI [Abstract] | |
Entity Registrant Name | TENNESSEE VALLEY AUTHORITY |
Current Fiscal Year End Date | --09-30 |
Entity Address, Country | US |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Document Quarterly Report | true |
Local Phone Number | 632-2101 |
City Area Code | (865) |
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 Address, Postal Zip Code | 37902 |
Entity Interactive Data Current | Yes |
Entity Central Index Key | 0001376986 |
Entity Small Business | false |
Document Transition Report | false |
Document Information [Line Items] | |
Entity Incorporation, State or Country Code | X1 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Operating revenues | ||||
Sales of Electricity | $ 2,932 | $ 2,491 | $ 8,318 | $ 7,294 |
Other revenue | 38 | 36 | 119 | 109 |
Revenues | 2,970 | 2,527 | 8,437 | 7,403 |
Operating expenses | ||||
Fuel | 539 | 428 | 1,563 | 1,210 |
Purchased power | 465 | 251 | 1,208 | 682 |
Operating and maintenance | 722 | 747 | 2,269 | 2,106 |
Depreciation and amortization | 513 | 385 | 1,535 | 1,144 |
Tax equivalents | 141 | 126 | 412 | 371 |
Total operating expenses | 2,380 | 1,937 | 6,987 | 5,513 |
Operating income | 590 | 590 | 1,450 | 1,890 |
Other income (expense), net | (6) | 11 | 11 | 37 |
Defined Benefit Plan, Other Cost (Credit) | 64 | 65 | 194 | 194 |
Interest expense | ||||
Interest expense | 264 | 267 | 791 | 824 |
Net income (loss) | $ 256 | $ 269 | $ 476 | $ 909 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |||
Net income (loss) | $ 256,000,000 | $ 269,000,000 | $ 476,000,000 | $ 909,000,000 | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | (40,000,000) | 35,000,000 | (50,000,000) | 158,000,000 | ||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | (34,000,000) | 64,000,000 | [1] | (50,000,000) | [1] | 114,000,000 |
Other comprehensive income (loss) | ||||||
Total other comprehensive income (loss) | (6,000,000) | (29,000,000) | 0 | 44,000,000 | ||
Total comprehensive income (loss) | $ 250,000,000 | $ 240,000,000 | $ 476,000,000 | $ 953,000,000 | ||
[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 $25 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange loss on the debt. |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets | ||
Cash and cash equivalents | $ 501 | $ 499 |
Accounts receivable, net | 1,750 | 1,566 |
Inventories, net | 1,013 | 950 |
Regulatory assets | 389 | 196 |
Other current assets | 269 | 287 |
Total current assets | 3,922 | 3,498 |
Property, plant, and equipment | ||
Completed plant | 66,234 | 66,411 |
Less accumulated depreciation | (33,945) | (34,663) |
Net completed plant | 32,289 | 31,748 |
Construction in progress | 2,216 | 2,458 |
Nuclear fuel | 1,494 | 1,566 |
Finance lease, asset | 645 | 692 |
Total property, plant, and equipment, net | 36,644 | 36,464 |
Investment funds | 3,751 | 4,053 |
Regulatory and other long-term assets | ||
Regulatory assets | 7,789 | 7,956 |
Operating Lease, Right-of-Use Asset | 168 | 165 |
Other long-term assets | 401 | 320 |
Total regulatory and other long-term assets | 8,358 | 8,441 |
Total assets | 52,675 | 52,456 |
Current liabilities | ||
Accounts payable and accrued liabilities | 2,384 | 2,215 |
Accrued interest | 249 | 282 |
Asset Retirement Obligation, Current | 313 | 266 |
Finance Lease, Liability, Current | 0 | 25 |
Regulatory liabilities | 331 | 340 |
Short-term debt, net | 1,034 | 780 |
Current maturities of power bonds | 1,029 | 1,028 |
Current maturities of long-term debt of variable interest entities | 44 | 43 |
Total current liabilities | 5,384 | 4,979 |
Other liabilities | ||
Post-retirement and post-employment benefit obligations | 4,791 | 5,045 |
Asset retirement obligations | 6,898 | 6,736 |
Finance Lease, Liability, Noncurrent | 648 | 687 |
Other long-term liabilities | 1,560 | 2,041 |
Regulatory liabilities | 88 | 40 |
Total other liabilities | 13,985 | 14,549 |
Long-term debt, net | ||
Long-term power bonds, net | 17,383 | 17,457 |
Long-term debt of variable interest entities, net | 985 | 1,006 |
Total long-term debt, net | 18,368 | 18,463 |
Total liabilities | 37,737 | 37,991 |
Proprietary capital | ||
Power program appropriation investment | 258 | 258 |
Power program retained earnings | 14,167 | 13,689 |
Total power program proprietary capital | 14,425 | 13,947 |
Nonpower programs appropriation investment, net | 535 | 540 |
Accumulated other comprehensive income (loss) | (22) | (22) |
Total proprietary capital | 14,938 | 14,465 |
Total liabilities and proprietary capital | $ 52,675 | $ 52,456 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 521 | $ 519 | |
Cash flows from operating activities | |||
Net income (loss) | 476 | 909 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
Depreciation and amortization (including amortization of debt issuance costs and premiums/discounts) | 1,551 | 1,160 | |
Amortization of nuclear fuel cost | 252 | 285 | |
Non-cash retirement benefit expense | 246 | 250 | |
Other regulatory amortization and deferrals | (203) | (16) | |
Changes in current assets and liabilities | |||
Accounts receivable, net | (184) | 60 | |
Inventories and other current assets, net | (131) | 26 | |
Accounts payable and accrued liabilities | 298 | 98 | |
Accrued interest | (34) | (51) | |
Pension contributions | (233) | (231) | |
Other, net | (204) | 211 | |
Net cash provided by operating activities | 1,834 | 2,227 | |
Cash flows from investing activities | |||
Construction expenditures | (1,772) | (1,476) | |
Nuclear fuel expenditures | (235) | (243) | |
Loans and other receivables | |||
Advances | (9) | (7) | |
Repayments | 12 | 6 | |
Other, net | 26 | 22 | |
Net cash used in investing activities | (1,978) | (1,698) | |
Long-term debt | |||
Redemptions and repurchases of power bonds | (28) | [1] | (1,860) |
Repayments of Other Long-term Debt | 21 | 20 | |
Short-term debt issues (redemptions), net | 254 | 1,541 | |
Finance Lease, Principal Payments | 63 | 207 | |
Other, net | 5 | 15 | |
Net cash provided by (used in) financing activities | 147 | (531) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | 3 | $ (2) | |
Cash and cash equivalents at end of period | $ 501 | ||
[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 | 9 Months Ended | ||||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | |
Power Program Appropriation Investment | $ 258,000,000 | $ 258,000,000 | $ 258,000,000 | |||||
Power Program Retained Earnings | 14,167,000,000 | 14,167,000,000 | 13,689,000,000 | |||||
Nonpower Programs Appropriation Investment, Net | 535,000,000 | 535,000,000 | 540,000,000 | |||||
Accumulated Other Comprehensive Income (Loss) from Net Gains (Losses) on Cash Flow Hedges | (22,000,000) | (22,000,000) | (22,000,000) | |||||
Total Proprietary Capital | 14,938,000,000 | $ 13,878,000,000 | 14,938,000,000 | $ 13,878,000,000 | $ 14,689,000,000 | 14,465,000,000 | $ 13,639,000,000 | $ 12,932,000,000 |
Net income (loss) | 256,000,000 | 269,000,000 | 476,000,000 | 909,000,000 | ||||
Total other comprehensive income (loss) | (6,000,000) | (29,000,000) | 0 | 44,000,000 | ||||
Return on power program appropriation investment | (1,000,000) | (1,000,000) | (3,000,000) | (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 | 14,167,000,000 | 13,085,000,000 | 14,167,000,000 | 13,085,000,000 | 13,910,000,000 | 13,689,000,000 | 12,815,000,000 | 12,177,000,000 |
Net income (loss) | 258,000,000 | 271,000,000 | 481,000,000 | 915,000,000 | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Return on power program appropriation investment | (1,000,000) | (1,000,000) | (3,000,000) | (3,000,000) | ||||
New Accounting Standard - CECL | (4,000,000) | |||||||
Nonpower Programs Appropriation Investment, Net | ||||||||
Nonpower Programs Appropriation Investment, Net | 535,000,000 | 542,000,000 | 535,000,000 | 542,000,000 | 537,000,000 | 540,000,000 | 544,000,000 | 548,000,000 |
Net income (loss) | (2,000,000) | (2,000,000) | (5,000,000) | (6,000,000) | ||||
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) | (7,000,000) | (22,000,000) | (7,000,000) | $ (16,000,000) | $ (22,000,000) | $ 22,000,000 | $ (51,000,000) |
Net income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss) | (6,000,000) | (29,000,000) | 0 | 44,000,000 | ||||
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 | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Other Significant Noncash Transactions [Line Items] | ||
Capital Expenditures Incurred but Not yet Paid | $ 470 | $ 396 |
Increase in lease assets/liabilities | $ 233 |
Statement of Cash Flows, Supple
Statement of Cash Flows, Supplemental Disclosures | 9 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information Construction in progress and Nuclear fuel expenditures included in Accounts payable and accrued liabilities at June 30, 2022 and 2021, were $470 million and $396 million, respectively, and are excluded from the Consolidated Statements of Cash Flows for the nine months ended June 30, 2022 and 2021, as non-cash investing activities. Excluded from the Consolidated Statements of Cash Flows for the nine months ended June 30, 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. No material finance leases were entered into or amended during the nine months ended June 30, 2022. Cash flows from swap contracts that are accounted for as hedges are classified in the same category as the item being hedged or on a basis consistent with the nature of the instrument. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
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. TVA performs these management duties in cooperation with other federal and state agencies that have jurisdiction and authority over certain aspects of the river system. In addition, the TVA Board of Directors ("TVA Board") has established two councils — the Regional Resource Stewardship Council and the Regional Energy Resource Council — to advise TVA on its stewardship activities in the Tennessee Valley and its energy resource activities. 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 as authorized by the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-831ee ("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 repayment obligation 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 (2022, 2021, 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 TVA is no longer considered to be a regulated entity, then costs would be required to be written off. 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, 2021, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2021 (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 9 — Variable Interest Entities . Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements requires TVA to estimate the effects of various matters that are inherently uncertain as of the date of the consolidated financial statements. Although the consolidated financial statements are prepared in conformity with GAAP, TVA is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses, 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 include cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 20 — Contingencies and Legal Proceedings — Legal Proceedings — Environmental Agreements . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash (in millions) At June 30, 2022 At September 30, 2021 Cash and cash equivalents $ 501 $ 499 Restricted cash and cash equivalents included in Other long-term assets 20 19 Total cash, cash equivalents, and restricted cash $ 521 $ 518 Allowance for Uncollectible Accounts TVA recognizes 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 collectability of the reported amounts. The appropriateness of the allowance is evaluated at the end of each reporting period. TVA continues to monitor the impact of the coronavirus disease 2019 ("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 Current Expected Credit Losses. 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 June 30, 2022, and September 30, 2021, respectively, for trade accounts receivable. Additionally, loans receivable of $128 million and $99 million at June 30, 2022, and September 30, 2021, 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 $4 million at both June 30, 2022 and September 30, 2021. 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 external depreciation studies that are updated approximately every five years. During the first quarter of 2022, TVA implemented a new depreciation study related to its completed plant. The new study included a decline in the service life estimates of TVA's coal-fired plants based on current planning assumptions to potentially retire the remainder of the coal-fired fleet by 2035. Property, Plant, and Equipment Depreciation Rates Implemented Rates (1) At September 30, 2021 Asset Class Nuclear 2.72 2.38 Coal-fired 3.98 1.95 Hydroelectric 1.95 1.60 Gas and oil-fired 3.45 2.98 Transmission 1.45 1.34 Other 3.21 7.12 Note (1) Implemented rates represent average rates for each asset class as determined by the depreciation study and were applicable beginning October 1, 2021. Depreciation expense was $459 million and $347 million for the three months ended June 30, 2022 and 2021, respectively. Depreciation expense was $1.4 billion and $1.0 billion for the nine months ended June 30, 2022 and 2021, respectively. Implementation of the new depreciation rates resulted in an estimated increase of approximately $309 million in depreciation and amortization expense for the nine months ended June 30, 2022, as compared to the same period of the prior year. This estimate represents the effect of using the new depreciation rates on the property, plant, and equipment balances at June 30, 2021, and does not include any potential impact from additions to or retirements of net completed plant that occurred since June 30, 2021. See Note 6 — Plant Closures |
Impact of New Accounting Standa
Impact of New Accounting Standards and Interpretations (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | Impact of New Accounting Standards and Interpretations The following are accounting standard updates issued by the Financial Accounting Standards Board that TVA adopted during 2022: Lessor-Certain Leases with Variable Lease Payments Description This guidance amends the lessor lease classification for leases that have variable lease payments that are not based on an index or rate. If the lease meets the criteria for classification as either (1) a sale-type or (2) a direct finance lease, and application of the lease guidance would result in recognition of a day-one selling loss, then the lease should be classified as an operating lease. There are two transition methods provided by the guidance for entities that have adopted the standard: • Retrospective application to leases that commenced or were modified after the beginning of the period in which the standard was adopted, or • Prospective application to leases that commence or are modified subsequent to the date that amendments in the guidance are first applied. Effective Date for TVA October 1, 2021 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a prospective basis. Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. 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 ("SOFR"). Effective Date for TVA December 31, 2021 Effect on the Financial Statements or Other Significant Matters TVA had interest rate swap contracts that totaled a notional value of $1.5 billion at December 31, 2021, that were indexed to LIBOR. TVA adopted the International Swaps and Derivative Association’s ("ISDA’s") LIBOR fallback protocol for interest rate swaps prior to December 31, 2021. Under this protocol, U.S. dollar LIBOR transactions would fall back to the SOFR upon cessation of the related LIBOR publication. The interest rate swap contracts did not receive hedge accounting treatment, and therefore TVA did not elect any optional expedients for this modification. TVA does not have any other significant contracts, including lease agreements, that include payments indexed to LIBOR. Therefore, the change of reference rate did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standards have been issued but, at June 30, 2022, were not effective and had not been adopted by TVA: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Description This guidance requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue with customers. It is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured contract assets and contract liabilities in the acquiree’s financial statement. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. Troubled Debt Restructurings and Vintage Disclosures Description This guidance eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted Financial Instruments-Credit Losses and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. Additionally, the guidance requires public business entities to present current-period gross write-offs by year of origination in their vintage disclosures. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. |
Accounts Receivable, Net (Text
Accounts Receivable, Net (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable primarily consist of amounts due from customers for power sales. The table below summarizes the types and amounts of TVA's accounts receivable: Accounts Receivable, Net (in millions) At June 30, 2022 At September 30, 2021 Power receivables $ 1,677 $ 1,480 Other receivables 73 86 Accounts receivable, net (1) $ 1,750 $ 1,566 Note |
Inventories, Net (Text Block)
Inventories, Net (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
Inventory, Net [Abstract] | |
Inventories, Net | Inventories, Net The table below summarizes the types and amounts of TVA's inventories: Inventories, Net (in millions) At June 30, 2022 At September 30, 2021 Materials and supplies inventory $ 804 $ 775 Fuel inventory 246 198 Renewable energy certificates/emissions allowance inventory, net 18 12 Allowance for inventory obsolescence (55) (35) Inventories, net $ 1,013 $ 950 |
Deferred Costs, Capitalized, Pr
Deferred Costs, Capitalized, Prepaid, and Other Assets (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | Other Current Assets Other current assets consisted of the following: Other Current Assets (in millions) At June 30, 2022 At September 30, 2021 Commodity contract derivative assets $ 163 $ 210 Other 106 77 Other current assets $ 269 $ 287 Commodity Contract Derivative Assets. TVA enters into certain derivative contracts for natural gas that require physical delivery of the contracted quantity of the commodity. TVA also reinstated the Financial Hedging Program ("FHP") (formerly the Financial Trading Program, which was suspended in 2014) in December 2021, and hedging activity began under the program in the second quarter of 2022. Commodity contract derivative assets classified as current include deliveries or settlements that will occur within 12 months or less. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a |
Plant Closures (Text Block)
Plant Closures (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment Impairment or Disposal [Abstract] | |
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. Based on results of assessments presented to the TVA Board in 2019, the retirement of Bull Run Fossil Plant ("Bull Run") by December 2023 was approved. In addition, TVA is evaluating the impact of retiring the balance of the coal-fired fleet by 2035, and that evaluation includes environmental reviews, public input, and TVA Board approval. Due to these evaluations, certain planning assumptions were updated, and their financial impacts are discussed below. 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 retirement of Bull Run, TVA has recognized a cumulative $447 million of accelerated depreciation since the second quarter of 2019. Of this amount, $35 million was recognized for Bull Run during both the three months ended June 30, 2022 and the three months ended June 30, 2021, and $105 million and $102 million were recognized during the nine months ended June 30, 2022 and the nine months ended June 30, 2021, respectively. In addition, service lives for Cumberland Fossil Plant, Gallatin Fossil Plant, Kingston Fossil Plant ("Kingston"), and Shawnee Fossil Plant were lowered in a new depreciation study implemented during the first quarter of 2022 to reflect current planning assumptions to potentially retire the remainder of the coal-fired fleet by 2035. As a result, TVA recognized an estimated $253 million of additional depreciation related to these four coal-fired plants during the nine months ended June 30, 2022. This estimate represents the effect of using the new depreciation rates on the property, plant, and equipment balances at June 30, 2021, and does not include any potential impact from additions to or retirements of net completed plant that occurred since June 30, 2021. During the nine months ended June 30, 2022, TVA also recognized $17 million in Operating and maintenance expense related to additional inventory reserves and write-offs for the coal-fired fleet, including Bull Run. Of this amount, $6 million was recognized during the three months ended June 30, 2022. |
Other Long-Term Assets (Text Bl
Other Long-Term Assets (Text Block) | 9 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 At September 30, 2021 Loans and other long-term receivables, net $ 125 $ 96 EnergyRight ® receivables, net 50 57 Prepaid long-term service agreements 60 44 Commodity contract derivative assets 88 40 Other 78 83 Total other long-term assets $ 401 $ 320 Loans and Other Long-Term Receivables . TVA's loans and other long-term receivables primarily consist of economic development loans for qualifying organizations and a receivable for reimbursements to recover the cost of providing long-term, on-site storage for spent nuclear fuel. 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 both June 30, 2022 and September 30, 2021, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $3 million. EnergyRight ® Receivables . In association with the EnergyRight ® program, TVA's local power company customers ("LPCs") offer financing to end-use customers for the purchase of energy-efficient equipment. Depending on the nature of the energy-efficiency project, loans may have a maximum term of five years or 10 years. TVA purchases the resulting loans receivable from its LPCs. The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loans receivable that have been in default for 180 days or more or that TVA has determined are uncollectible. Given this continuing involvement, TVA accounts for the transfer of the loans receivable as secured borrowings. The current and long-term portions of the loans receivable are reported in Accounts receivable, net and Other long-term assets, respectively, on TVA's Consolidated Balance Sheets. At June 30, 2022, and September 30, 2021, the carrying amount of the loans receivable, net of discount, reported in Accounts receivable, net was approximately $13 million and $15 million, respectively. See Note 10 — Other Long-Term Liabilities for information regarding the associated financing obligation. Allowance for Loan Losses. 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 June 30, 2022 At September 30, 2021 EnergyRight ® loan reserve $ 1 $ 1 Economic development loan collective reserve 1 1 Economic development loan specific loan reserve 2 2 Total allowance for loan losses $ 4 $ 4 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 both June 30, 2022, and September 30, 2021, prepayments of $12 million were recorded in Other current assets. Commodity Contract Derivative Assets. TVA enters into certain derivative contracts for natural gas that require physical delivery of the contracted quantity of the commodity. TVA also reinstated the FHP in December 2021, and hedging activity began under the program in the second quarter of 2022. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP for a discussion of TVA's commodity contract derivatives. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 9 Months Ended |
Jun. 30, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below. Regulatory Assets and Liabilities At June 30, 2022 At September 30, 2021 Current regulatory assets Unrealized losses on interest rate derivatives $ 71 $ 114 Unrealized losses on commodity derivatives 14 3 Fuel cost adjustment receivable 304 79 Total current regulatory assets 389 196 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,442 3,668 Non-nuclear decommissioning costs 2,872 2,653 Unrealized losses on interest rate derivatives 645 1,122 Nuclear decommissioning costs 686 363 Unrealized losses on commodity derivatives 5 — Other non-current regulatory assets 139 150 Total non-current regulatory assets 7,789 7,956 Total regulatory assets $ 8,178 $ 8,152 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 165 $ 130 Unrealized gains on commodity derivatives 166 210 Total current regulatory liabilities 331 340 Non-current regulatory liabilities Unrealized gains on commodity derivatives 88 40 Total non-current regulatory liabilities 88 40 Total regulatory liabilities $ 419 $ 380 TVA reinstated the FHP in December 2021, and hedging activity began under the program in the second quarter of 2022. Currently, TVA is hedging exposure to the price of natural gas under the FHP. Deferred gains and losses relating to TVA’s FHP are included as part of unrealized gains and losses on commodity derivatives. TVA defers all mark-to-market ("MtM") unrealized gains or losses as regulatory liabilities or assets, respectively, and records the realized gains or losses in fuel and purchased power expense as the contracts settle to match the delivery period of the underlying commodity. This accounting treatment reflects TVA's ability and intent to include the realized gains or losses of these commodity contracts in future periods through the fuel cost adjustment. Net unrealized gains and losses for any settlements that occur within 12 months or less are classified as a current regulatory liability or asset. See Note 14 — Risk Management Activities and Derivative Transactions . |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Jun. 30, 2022 | |
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 (the "JSCCG notes") and the issuance of $100 million of membership interests subject to mandatory redemption. The membership interests were purchased by John Sevier Holdco LLC ("Holdco"). Holdco is a special single-purpose entity, also formed in January 2012, established to acquire and hold the membership interests in JSCCG. A non-controlling interest in Holdco is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows are allocated. The membership interests held by Holdco in JSCCG were purchased with proceeds from the issuance of $100 million of secured notes (the "Holdco notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each January 15 and July 15, with a final payment due in January 2042. The payment dates for the mandatorily redeemable membership interests are the same as those of the Holdco notes. The sale of the JSCCG notes, the membership interests in JSCCG, and the Holdco notes closed in January 2012. The JSCCG notes are secured by TVA's lease payments, and the Holdco notes are secured by Holdco's investment in, and amounts receivable from, JSCCG. TVA's lease payments to JSCCG are equal to and payable on the same dates as JSCCG's and Holdco's semi-annual debt service payments. In addition to the lease payments, TVA pays administrative and miscellaneous expenses incurred by JSCCG and Holdco. Certain agreements related to this transaction contain default and acceleration provisions. Due to its participation in the design, business activity, and credit and financial support of JSCCG and Holdco, TVA has determined that it has a variable interest in each of these entities. Based on its analysis, TVA has concluded that it is the primary beneficiary of JSCCG and Holdco and, as such, is required to account for the VIEs on a consolidated basis. Holdco's membership interests in JSCCG are eliminated in consolidation. Southaven VIE In 2013, TVA entered into a $400 million lease financing arrangement with Southaven Combined Cycle Generation LLC ("SCCG") for the lease by TVA of the Southaven Combined Cycle Facility ("Southaven CCF"). SCCG is a special single-purpose limited liability company formed in June 2013 to finance the Southaven CCF through a $360 million secured notes issuance (the "SCCG notes") and the issuance of $40 million of membership interests subject to mandatory redemption. The membership interests were purchased by Southaven Holdco LLC ("SHLLC"). SHLLC is a special single-purpose entity, also formed in June 2013, established to acquire and hold the membership interests in SCCG. A non-controlling interest in SHLLC is held by a third party through nominal membership interests, to which none of the income, expenses, and cash flows of SHLLC are allocated. The membership interests held by SHLLC were purchased with proceeds from the issuance of $40 million of secured notes (the "SHLLC notes") and are subject to mandatory redemption pursuant to a schedule of amortizing, semi-annual payments due each February 15 and August 15, with a final payment due on August 15, 2033. The payment dates for the mandatorily redeemable membership interests are the same as those of the SHLLC notes, and the payment amounts are sufficient to provide returns on, as well as returns of, capital until the investment has been repaid to SHLLC in full. The rate of return on investment to SHLLC is 7.0 percent, which is reflected as interest expense in the Consolidated Statements of Operations. SHLLC is required to pay a pre-determined portion of the return on investment to Seven States Southaven, LLC 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 activity, and financial support of SCCG and has determined that it has a direct variable interest in SCCG resulting from risk associated with the value of the Southaven CCF at the end of the lease term. Based on its analysis, TVA has determined that it is the primary beneficiary of SCCG and, as such, is required to account for the VIE on a consolidated basis. Impact on Consolidated Financial Statements The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG at June 30, 2022, and September 30, 2021, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At June 30, 2022 At September 30, 2021 Current liabilities Accrued interest $ 22 $ 10 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 44 43 Total current liabilities 69 56 Other liabilities Other long-term liabilities 18 20 Long-term debt, net Long-term debt of variable interest entities, net 985 1,006 Total liabilities $ 1,072 $ 1,082 Interest expense of $13 million for both the three months ended June 30, 2022 and 2021, and $38 million and $39 million for the nine months ended June 30, 2022 and 2021, respectively, is included in the Consolidated Statements of Operations related to debt of VIEs and membership interests of VIEs subject to mandatory redemption. Creditors of the VIEs 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 | 9 Months Ended |
Jun. 30, 2022 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist primarily of liabilities related to certain derivative agreements as well as liabilities related to operating leases. The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities (in millions) At June 30, 2022 At September 30, 2021 (1) Interest rate swap liabilities $ 1,002 $ 1,524 Operating lease liabilities 111 122 Currency swap liabilities 123 76 EnergyRight ® financing obligation 58 66 Long-term deferred compensation 35 42 Advances for construction 50 24 Long-term deferred revenue 39 37 Accrued long-term service agreements 9 29 Other 133 121 Total other long-term liabilities $ 1,560 $ 2,041 Note (1) At September 30, 2021, $5 million and $19 million previously classified as Long-term deferred revenue (a component of Other long-term liabilities) and Other (a component of Other long-term liabilities), respectively, have been reclassified to Advances for construction (a component of Other long-term liabilities) to conform with current year presentation. Interest Rate Swap Liabilities. TVA uses interest rate swaps to fix variable short-term debt to a fixed rate. The values of these derivatives are included in Accounts payable and accrued liabilities, Accrued interest, and Other long-term liabilities on the Consolidated Balance Sheets. At June 30, 2022, and September 30, 2021, the carrying amount of the interest rate swap liabilities recorded in Accounts payable and accrued liabilities and Accrued interest was $72 million and $115 million, respectively. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Interest Rate Derivatives for information regarding the interest rate swap liabilities. Operating Lease Liabilities . TVA's operating leases consist primarily of railcars, equipment, real estate/land, and power generating facilities. At June 30, 2022 and September 30, 2021, the current portion of TVA's operating leases recorded in Accounts payable and accrued liabilities was $60 million and $40 million, respectively. Currency Swap Liabilities . To protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges. The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. At June 30, 2022 and September 30, 2021, the carrying amount of the currency swap liabilities reported in Accounts payable and accrued liabilities was $10 million and $7 million, respectively. See Note 14 — Risk Management Activities and Derivative Transactions — Cash Flow Hedging Strategy for Currency Swaps for more information regarding the currency swap liabilities. EnergyRight ® Financing Obligation . 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 June 30, 2022, and September 30, 2021, the carrying amount of the financing obligation recorded in Accounts payable and accrued liabilities was $15 million and $16 million, respectively. See Note 7 — Other Long-Term Assets for information regarding the associated loans receivable. Long-Term Deferred Compensation . TVA provides compensation arrangements to engage and retain certain employees, both executive and non-executive, which are designed to provide participants with the ability to defer compensation to future periods. The current and long-term portions are recorded in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA’s Consolidated Balance Sheets. At June 30, 2022 and September 30, 2021, the current amount of deferred compensation recorded in Accounts payable and accrued liabilities was $46 million and $51 million, respectively. Advances for Construction . TVA receives refundable and non-refundable advances for construction that are generally intended to defray all or a portion of the costs of building or extending TVA’s existing power assets. Amounts received are deferred as a liability with the long-term portion representing amounts that will not be recognized within the next 12 months. As projects meet milestones or other contractual obligations, the refundable portion is refunded to the customer and the non-refundable portion is recognized as contributions in aid of construction and offsets the cost of plant assets. At June 30, 2022 and September 30, 2021, the current amount of advances for construction recorded in Accounts payable and accrued liabilities was $35 million and $38 million, respectively. Long-Term Deferred Revenue . Long-term deferred revenue represents payments received that exceed services rendered resulting in the deferral of revenue. This long-term portion represents amounts that will not be recognized within the next 12 months primarily related to fiber and transmission agreements. The current and long-term portions of the deferral are recorded in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA’s Consolidated Balance Sheets. At June 30, 2022 and September 30, 2021, the current amount of deferred revenue recorded in Accounts payable and accrued liabilities was $14 million and $17 million, respectively. 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 recorded in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets. At June 30, 2022 and September 30, 2021, the current amount of accrued long-term service agreements recorded in Accounts payable and accrued liabilities was $38 million and $28 million, respectively. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Jun. 30, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the nine months ended June 30, 2022, TVA's total asset retirement obligations ("ARO") liability increased $209 million as a result of periodic accretion and revisions in estimate, partially offset by settlement projects that were conducted during the period. The nuclear and non-nuclear accretion amounts were deferred as regulatory assets. During the nine months ended June 30, 2022, $103 million of the related regulatory assets were amortized into expense as these amounts were collected in rates. See Note 8 — Regulatory Assets and Liabilities . TVA maintains investment trusts to help fund its decommissioning obligations. See Note 15 — Fair Value Measurements — Investment Funds and Note 20 — Contingencies and Legal Proceedings — Contingencies — Decommissioning Costs for a discussion of the trusts' objectives and the current balances of the trusts. Asset Retirement Obligation Activity Nuclear Non-Nuclear Total Balance at September 30, 2021 $ 3,428 $ 3,574 $ 7,002 (1) Settlements (2) (195) (197) Revisions in estimate 3 237 240 Accretion (recorded as regulatory asset) 116 50 166 Balance at June 30, 2022 $ 3,545 $ 3,666 $ 7,211 (1) Note (1) Includes $313 million and $266 million at June 30, 2022, and September 30, 2021, respectively, recorded in Current liabilities. The revisions in non-nuclear estimates increased the liability balance by $237 million for the nine months ended June 30, 2022. TVA implemented revised depreciation rates during the first quarter of 2022 applicable to its completed plant as a result of the completion of a new depreciation study. The study included a decline in the service life estimates of TVA’s coal-fired plants based on current planning assumptions to potentially retire the remainder of the coal-fired fleet by 2035. As a result of the change in the service life estimates reflected in the depreciation study, TVA performed an assessment of the assumptions used in the timing of cash flows related to its non-nuclear AROs. Based on the assessment, TVA identified changes to its projections of timing of certain asset retirement activities, resulting in an increase of $47 million to the ARO. In addition, TVA completed an engineering review of its cost estimates for closure of certain areas containing coal fines at Paradise Fossil Plant, resulting in an increase of $119 million due to expected cost increases for necessary changes in activities associated with proper completion of the closure. During the second quarter of 2022, based on refined project cost assumptions and scope changes, TVA revised its AROs for the closure of certain coal yards at its fossil plants, resulting in an increase to AROs of $57 million. During the third quarter, coal combustion residual ("CCR") closure liabilities at Paradise and Cumberland Fossil Plants increased $82 million due to new vendor bids, modified closure designs, and revised estimates for construction costs. Partially offsetting these increases, was a reduction in expected CCR post-closure care costs for maintenance and monitoring at Paradise, Shawnee, and Colbert Fossil Plants resulting in a decrease in these liabilities of $53 million. |
Debt and Other Obligations
Debt and Other Obligations | 9 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Debt and Other Obligations Debt Outstanding Total debt outstanding at June 30, 2022, and September 30, 2021, consisted of the following: Debt Outstanding At June 30, 2022 At September 30, 2021 Short-term debt Short-term debt, net $ 1,034 $ 780 Current maturities of power bonds issued at par 1,029 1,028 Current maturities of long-term debt of VIEs issued at par 44 43 Total current debt outstanding, net 2,107 1,851 Long-term debt Long-term power bonds (1) 17,491 17,572 Long-term debt of VIEs, net 985 1,006 Unamortized discounts, premiums, issue costs, and other (108) (115) Total long-term debt, net 18,368 18,463 Total debt outstanding $ 20,475 $ 20,314 Note (1) Includes net exchange gain from currency transactions of $110 million and $58 million at June 30, 2022, and September 30, 2021, respectively. Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2021, to June 30, 2022: Debt Securities Activity Date Amount (in millions) Redemptions/Maturities (1) 2009 Series B December 2021 $ 1 2009 Series B June 2022 27 Total redemptions/maturities of power bonds 28 Debt of variable interest entities 21 Total redemptions/maturities of debt $ 49 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 $150 million credit facility that matures on February 9, 2024, a $500 million credit facility that matures on February 1, 2025, a $1.0 billion credit facility that matures on September 21, 2026, and a $1.0 billion credit facility that matures on March 25, 2027. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.7 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. At June 30, 2022, and September 30, 2021, there were approximately $743 million and $1.2 billion, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. See Note 14 — Risk Management Activities and Derivative Transactions — Other Derivative Instruments — Collateral . The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities: Summary of Long-Term Credit Facilities At June 30, 2022 (in millions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability February 2024 $ 150 $ 38 $ — $ 112 February 2025 500 500 — — September 2026 1,000 99 — 901 March 2027 1,000 106 — 894 Total $ 2,650 $ 743 $ — $ 1,907 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 2022 with a maturity date of September 30, 2022. 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 12 months or less. There were no outstanding borrowings under the facility at June 30, 2022. 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 September 30, 2021, the outstanding leaseback obligations related to the remaining CTs and QTE were $25 million. There were no outstanding leaseback obligations related to the remaining CTs and QTE at June 30, 2022. P rior to 2021, TVA made final rent payments involving 16 CTs and acquired the equity interest related to these transactions. Rent payments under the remaining CT lease/leaseback transactions were made through January 2022. TVA gave notice in December 2021 of its election to acquire the equity interests related to the remaining eight CTs for a total of $155 million. The associated acquisitions are expected to close in December 2022 and May 2023. In October 2019, TVA provided notice of its intent to purchase the ownership interest in certain QTE through a series of installments. TVA made its last repurchase payment in December 2021, after which the associated leases were terminated. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2022 | |
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). TVA then reclassifies an amount out of AOCI into net income, offsetting the exchange gain/loss recorded on the debt. During the three months ended June 30, 2022 and 2021, TVA reclassified $34 million of losses and $64 million of gains, respectively, related to its cash flow hedges from AOCI to Interest expense. During the nine months ended June 30, 2022 and 2021, TVA reclassified $50 million of losses and $114 million of gains, respectively, related to its cash flow hedges from AOCI to Interest expense. See Note 14 — Risk Management Activities and Derivative Transactions. TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in AOCI or that would impact the statements of operations are recorded as regulatory assets or regulatory liabilities. See Note 8 — Regulatory Assets and Liabilities for a schedule of regulatory assets and liabilities. See Note 14 — Risk Management Activities and Derivative Transactions for a discussion of the recognition in AOCI of gains and losses associated with certain derivative instruments. See Note 15 — Fair Value Measurements for a discussion of the recognition of certain investment fund gains and losses as regulatory assets and liabilities. See Note 19 — Benefit Plans for a discussion of the regulatory accounting related to components of TVA's benefit plans. |
Risk Management Activities and
Risk Management Activities and Derivative Transactions | 9 Months Ended |
Jun. 30, 2022 | |
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. In November 2021, the TVA Board approved the elimination of the Value at Risk aggregate transaction limit for the FHP and authorized the use of tolerances and measures that will be reviewed annually by the TVA Board. The tolerances will address counterparty exposure, liquidity risk, and reduction in fuel cost volatility. In addition, the TVA Board approved certain administrative changes to the FHP. In December 2021, TVA reinstated the FHP, and hedging activity began under the program in the second quarter of 2022. 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 June 30 Nine Months Ended June 30 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2022 2021 2022 2021 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 $ (40) $ 35 $ (50) $ 158 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 June 30 Nine Months Ended June 30 Derivatives in Cash Flow Hedging Relationship 2022 2021 2022 2021 Currency swaps $ (34) $ 64 $ (50) $ 114 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 $25 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 loss on the debt. Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended June 30 Nine Months Ended June 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2022 2021 2022 2021 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 liabilities and assets, respectively Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow $ (26) $ (29) $ (83) $ (86) Commodity derivatives To protect against fluctuations in market prices of purchased commodities (price risk) Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively Realized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity (2) 14 — 14 — 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 nine months ended June 30, 2022 and for the three and nine months ended June 30, 2021. (2) Amount recognized in 2022 is solely reported in Fuel expense. Fair Values of TVA Derivatives (in millions) At June 30, 2022 At September 30, 2021 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £250 million Sterling $ (69) Accounts payable and accrued liabilities $(6); Other long-term liabilities $(63) $ (36) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(32) £150 million Sterling (64) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(60) (47) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(44) Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (791) Accounts payable and accrued liabilities $(40); Accrued interest $(15); Other long-term liabilities $(736) $ (1,182) Accounts payable and accrued liabilities $(44); Accrued interest $(37); Other long-term liabilities $(1,101) $476 million notional (283) Accounts payable and accrued liabilities $(16); Accrued interest $(1); Other long-term liabilities $(266) (455) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(423) $42 million notional (1) — N/A (2) Accounts payable and accrued liabilities $(1); Accrued interest $(1) Commodity contract derivatives 183 Other current assets $154; Other long-term assets $36; Accounts payable and accrued liabilities $(4); Other long-term liabilities $(3) 247 Other current assets $210; Other long-term assets $40; Accounts payable and accrued liabilities $(3) Commodity derivatives under the FHP 52 Accounts receivable, net $3; Other current assets $9; Other long-term assets $52; Accounts payable and accrued liabilities $(10); Other long-term liabilities $(2) — N/A Note (1) At September 30, 2021, represented two interest rate swaps with notional amounts of $28 million and $14 million. In 2022, final payments were made on both of the interest rate swaps. Cash Flow Hedging Strategy for Currency Swaps To protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges at the time the Bond transactions occurre d. TVA h ad two currency swaps outstanding at June 30, 2022, with total currency exposure of £400 million and expiration dates in 2032 and 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 Accrued interest, 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 MtM gains and losses on its interest rate swaps. The net deferred unrealized gains and losses are classified as regulatory liabilities or assets 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, Accrued interest, and Other long-term liabilities on the Consolidated Balance Sheets, and realized gains and losses, if any, are included on TVA's Consolidated Statements of Operations. For the three months ended June 30, 2022 and 2021, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $262 million and increase in unrealized losses of $183 million, respectively. For the nine months ended June 30, 2022 and 2021, the changes in fair market value of the interest rate swaps resulted in the reduction in unrealized losses of $533 million and $346 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 these natural gas contracts and defers the fair market values as regulatory assets or liabilities on a gross basis. At June 30, 2022, TVA's natural gas contract derivatives had terms of up to three years. Commodity Contract Derivatives At June 30, 2022 At September 30, 2021 Number of Contracts Notional Amount Fair Value (MtM) (in millions) Number of Contracts Notional Amount Fair Value (MtM) (in millions) Natural gas contract derivatives 60 364 million mmBtu $ 183 40 263 million mmBtu $ 247 Commodity Derivatives under the FHP. In December 2021, TVA reinstated the FHP, and hedging activity began under the program in the second quarter of 2022. Currently, TVA is hedging exposure to the price of natural gas under the FHP. There is no Value at Risk aggregate transaction limit under the current FHP structure, but the TVA Board reviews and authorizes the use of tolerances and measures annually. TVA's policy prohibits trading financial instruments under the FHP for speculative purposes. At June 30, 2022, TVA's natural gas swap contracts under the FHP had remaining terms of up to three years. Commodity Derivatives under Financial Hedging Program (1) At June 30, 2022 At September 30, 2021 Number of Contracts Notional Amount Fair Value (MtM) (in millions) Number of Contracts Notional Amount Fair Value (MtM) (in millions) Natural gas Swap contracts 131 163 million mmBtu $ 52 — — million mmBtu $ — Note (1) Fair value amounts presented are based on the net commodity position with the counterparty. Notional amounts disclosed represent the net value of contractual amounts. TVA defers all FHP unrealized gains (losses) as regulatory liabilities (assets) and records the realized gains or losses in fuel and purchased power expense to match the delivery period of the underlying commodity. 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 June 30, 2022 At September 30, 2021 Assets Commodity contract derivatives $ 190 $ 250 Commodity derivatives under the FHP (2) 64 — Total derivatives subject to master netting or similar arrangement $ 254 $ 250 Liabilities Currency swaps $ 133 $ 83 Interest rate swaps (3) 1,074 1,639 Commodity contract derivatives 7 3 Commodity derivatives under the FHP (2) 12 — Total derivatives subject to master netting or similar arrangement $ 1,226 $ 1,725 Notes (1) Offsetting amounts include counterparty netting of derivative contracts. Except as discussed below, there were no other material offsetting amounts on TVA's Consolidated Balance Sheets at either June 30, 2022, or September 30, 2021. (2) At June 30, 2022, the gross derivative asset and gross derivative liability was $86 million and $34 million, respectively, with offsetting amounts for each totaling $22 million. TVA received $10 million of collateral from counterparties as of June 30, 2022, which is recorded separately from the fair values of the derivative assets and liabilities and reported in Accounts payable and accrued liabilities. (3) Letters of credit of approximately $743 million and $1.2 billion were posted as collateral at June 30, 2022, and September 30, 2021, respectively, to partially secure the liability positions of one of the interest rate swaps in accordance with the collateral requirements for this derivative. Other Derivative Instruments Investment Fund Derivatives . Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT"), the Asset Retirement Trust ("ART"), the Supplemental Executive Retirement Plan ("SERP"), and the TVA Deferred Compensation Plan ("DCP"). See Note 15 — Fair Value Measurements — Investment Funds for a discussion of the trusts, plans, and types of investments. The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments. At June 30, 2022, and September 30, 2021, the NDT held investments in forward contracts to purchase debt securities. The fair values of these derivatives were in net asset positions totaling $2 million at both June 30, 2022, and September 30, 2021. Collateral . TVA's interest rate swaps, currency swaps, and commodity derivatives under the FHP contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold. At June 30, 2022, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $1.2 billion. TVA's collateral obligations at June 30, 2022, under these arrangements were $721 million, for which TVA had posted $743 million in letters of credit. These letters of credit reduce the available balance under the related credit facilities. TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the contract as a result of this posted collateral. In addition, as of June 30, 2022, TVA received $10 million of collateral from counterparties related to the commodity derivatives under the FHP. 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 $1.7 billion and $1.5 billion of receivables from power sales outstanding at June 30, 2022, and September 30, 2021, 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 7 — Other Long-Term Assets . TVA had revenue from two LPCs that collectively accounted for 16 percent of total operating revenues for both the nine months ended June 30, 2022 and the nine months ended June 30, 2021. 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 or supplies 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. TVA continues evaluating potential supplier performance risks and supplier impact but cannot determine or predict the duration of such risks/impacts or the extent to which such risks/impacts could affect TVA's business, operations, and financial results or cause potential business disruptions. TVA has experienced an increase in supplier impacts as a result of COVID-19 and the state of global supply chains and the economy, such as project delays, limited availability of supplies, and price increases. Russia's invasion of Ukraine has further intensified the state of global supply chains in addition to inflationary pressures and COVID-19, and TVA will continue to monitor these pressures. Natural Gas . TVA purchases a significant amount of its natural gas requirements through contracts with a variety of suppliers and purchases substantially all of its fuel oil requirements on the spot market. TVA delivers to its gas fleet under firm and non-firm transportation contracts on multiple interstate natural gas pipelines. TVA contracts for storage capacity that allows for operational flexibility and increased supply during peak gas demand scenarios or supply disruptions. TVA plans to continue using contracts of various lengths and terms to meet the projected natural gas needs of its natural gas fleet. TVA also maintains on-site, fuel oil backup to operate at the majority of the combustion turbine sites in the event of major supply disruptions. In the event of nonperformance by suppliers, TVA believes that it can obtain replacement natural gas. Coal . To ensure a reliable supply of coal, TVA had coal contracts with multiple suppliers at June 30, 2022. The contracted supply of coal is sourced from several geographic regions of the U.S. and is delivered via barge and rail. As a result of emerging technologies, environmental regulations, industry trends, and natural gas market volatility over the past few years, coal suppliers are facing increased financial pressure, which has led to relatively poor credit ratings and bankruptcies, restructuring, mine closures, or other scenarios. A long-term continued decline in demand for coal could result in more consolidations, additional bankruptcies, restructuring, mine closures, or other scenarios. Current market conditions indicate limited availability of spot market coal due to increased exports, utility demand, and mine capacity and capability. TVA experienced challenges in 2021 related to coal supply, as a result of supply limitation and transportation challenges. Coal supply and transportation continue to be constrained in 2022, and these constraints are anticipated to continue into 2023. Rail service continues to limit TVA’s ability to receive contracted supply, and TVA is also seeing significant supply constraints and price increases for reagents, diesel fuel, and fuel surcharges associated with coal transport, which are also expected to continue. In addition, higher than projected demand in May and June of 2022 have impacted coal inventories. TVA will continue to monitor the coal supply challenges and utilize its contracting strategy and diverse generation portfolio to balance needs and ensure adequate fuel supplies. 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. As a result of Russia’s invasion of Ukraine, new contracts for Russian origin nuclear fuel have been limited by Executive Order ("EO") 14066, and further restrictions on the purchase or use of Russian origin fuel may be forthcoming. TVA should have no direct impact from existing or future restrictions since TVA has no Russian origin nuclear fuel in inventory for use in its reactors and it is not contracted to purchase any Russian origin nuclear fuel. TVA could be impacted by higher market prices as a result of general market impacts associated with supply restrictions; however, at this time TVA's nuclear fuel is obtained predominantly through long-term contracts. 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. Because of the long-term nature and reliability of purchased power, TVA requires that the PPAs contain certain counterparty performance assurance requirements to help insure counterparty performance during the term of the agreements. Other Suppliers . Mounting solar supply chain constraints, commodity price increases, and the recent trade policy investigation into solar panel imports have created challenges for the U.S. solar industry, threatening project delays, cancellations, and price increases. These constraints are affecting contracted PPAs from previous requests for proposals ("RFPs") that are not yet online and TVA's Self-Directed Solar project. Derivative Counterparties . T VA has entered into physical and financial contracts that are classified as derivatives for hedging purposes, and TVA's NDT, ART, and qualified defined benefit plan ("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 pension plan have entered for investment purposes defaults, the value of the investment could decline significantly or perhaps become worthless. TVA has concentrations of credit risk from the banking, coal, and gas industries because multiple companies in these industries serve as counterparties to TVA in various derivative transactions. At June 30, 2022, all of TVA's commodity derivatives under the FHP, currency swaps, and interest rate swaps were with counterparties whose Moody's credit ratings were A2 or higher. TVA classifies forward natural gas contracts as derivatives. See Derivatives Not Receiving Hedge Accounting Treatment |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the asset or liability's principal market, or in the absence of a principal market, the most advantageous market for the asset or liability in an orderly transaction between market participants. TVA uses market or observable inputs as the preferred source of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. Valuation Techniques The measurement of fair value results in classification into a hierarchy by the inputs used to determine the fair value as follows: Level 1 — Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing. Level 2 — Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and that are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities and default rates observable at commonly quoted intervals, and inputs derived from observable market data by correlation or other means. Level 3 — Pricing inputs that are unobservable, or less observable, from objective sources. Unobservable inputs are only to be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available. A financial instrument's level within the fair value hierarchy (where Level 1 is the highest and Level 3 is the lowest) is based on the lowest level of input significant to the fair value measurement. The following sections describe the valuation methodologies TVA uses to measure different financial instruments at fair value. Except for gains and losses on SERP and DCP assets, all changes in fair value of these assets and liabilities have been recorded as changes in regulatory assets, regulatory liabilities, or AOCI on TVA's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss). Except for gains and losses on SERP and DCP assets, there has been no impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows related to these fair value measurements. Investment Funds At June 30, 2022, Investment funds were comprised of $3.8 billion of equity securities and debt securities classified as trading measured at fair value. Equity and trading debt securities are held in the NDT, ART, SERP, and DCP. The NDT holds funds for the ultimate decommissioning of TVA's nuclear power plants. The ART holds funds primarily for the costs related to the future closure and retirement of TVA's other long-lived assets. The balances in the NDT and ART were $2.6 billion and $1.1 billion, respectively, at June 30, 2022. 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 $191 million, private real assets of $128 million, and private credit of $50 million at June 30, 2022. The ART had unfunded commitments related to limited partnerships in private equity of $110 million, private real assets of $78 million, and private credit of $27 million at June 30, 2022. 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 NAV in the fair value hierarchy. Realized and unrealized gains and losses on equity and trading debt securities are recognized in current earnings and are based on average cost. The gains and losses of the NDT and ART are subsequently reclassified to a regulatory asset or liability account in accordance with TVA's regulatory accounting policy. See Note 1 — Summary of Significant Accounting Policies — Cost-Based Regulation and Note 8 — Regulatory Assets and Liabilities . TVA recorded unrealized gains and losses related to its equity and trading debt securities held during each period as follows: Unrealized Investment Gains (Losses) (in millions) Three Months Ended June 30 Nine Months Ended June 30 Fund Financial Statement Presentation 2022 2021 2022 2021 NDT Regulatory assets $ (331) $ 107 $ (305) $ 361 ART Regulatory assets (139) 48 (147) 168 SERP Other income (expense) (9) 3 (14) 8 DCP Other income (expense) (2) 1 (4) 1 Currency and Interest Rate Swap Derivatives See Note 14 — Risk Management Activities and Derivative Transactions — Cash Flow Hedging Strategy for Currency Swaps and Derivatives Not Receiving Hedge Accounting Treatment for a discussion of the nature, purpose, and contingent features of TVA's currency swaps and interest rate swaps. These swaps are classified as Level 2 valuations and are valued based on income approaches using observable market inputs for similar instruments. Commodity Contract Derivatives and Commodity Derivatives under the FHP Commodity Contract Derivatives. Most of these derivative contracts are valued based on market approaches, which utilize short-term and mid-term market-quoted prices from an external industry brokerage service. Commodity Derivatives under the FHP. Swap contracts are valued using a pricing model based on New York Mercantile Exchange inputs and are subject to nonperformance risk outside of the exit price. These contracts are classified as Level 2 valuations. See Note 14 — Risk Management Activities and Derivative Transactions — Derivatives Not Receiving Hedge Accounting Treatment — Commodity Derivatives and — Commodity Derivatives under the FHP . Nonperformance Risk The assessment of nonperformance risk, which includes credit risk, considers changes in current market conditions, readily available information on nonperformance risk, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. TVA is a counterparty to currency swaps, interest rate swaps, commodity contracts, and other derivatives which subject TVA to nonperformance risk. Nonperformance risk on the majority of investments and certain exchange-traded instruments held by TVA is incorporated into the exit price that is derived from quoted market data that is used to mark the investment to market. Nonperformance risk for most of TVA's derivative instruments is an adjustment to the initial asset/liability fair value. TVA adjusts for nonperformance risk, both of TVA (for liabilities) and the counterparty (for assets), by applying credit valuation adjustments ("CVAs"). TVA determines an appropriate CVA for each applicable financial instrument based on the term of the instrument and TVA's or the counterparty's credit rating as obtained from Moody's. For companies that do not have an observable credit rating, TVA uses internal analysis to assign a comparable rating to the counterparty. TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2021) 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 no change in the fair value of assets and a $1 million decrease in the fair value of liabilities at June 30, 2022. Fair Value Measurements The following tables set forth by level, within the fair value hierarchy, TVA's financial assets and liabilities that were measured at fair value on a recurring basis at June 30, 2022, and September 30, 2021. 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 $ 572 $ — $ — $ 572 Government debt securities (1) 438 20 — 458 Corporate debt securities (2) — 310 — 310 Mortgage and asset-backed securities — 75 — 75 Institutional mutual funds 187 — — 187 Forward debt securities contracts — 2 — 2 Private equity funds measured at net asset value (3) — — — 449 Private real asset funds measured at net asset value (3) — — — 345 Private credit measured at net asset value (3) — — — 99 Commingled funds measured at net asset value (3) — — — 1,254 Total investments 1,197 407 — 3,751 Commodity contract derivatives — 190 — 190 Commodity derivatives under the FHP — 64 — 64 Total $ 1,197 $ 661 $ — $ 4,005 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 133 $ — $ 133 Interest rate swaps — 1,074 — 1,074 Commodity contract derivatives — 7 — 7 Commodity derivatives under FHP — 12 — 12 Total $ — $ 1,226 $ — $ 1,226 Notes (1) Includes government-sponsored entities, including $438 million of U.S. Treasury securities within Level 1 of the fair value hierarchy. (2) Includes both U.S. and foreign debt. (3) Certain investments that are measured at fair value using the NAV 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 14 — 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 $ 634 $ — $ — $ 634 Government debt securities (1) 573 24 — 597 Corporate debt securities (2) — 411 — 411 Mortgage and asset-backed securities — 63 — 63 Institutional mutual funds 225 — — 225 Forward debt securities contracts — 2 — 2 Private equity funds measured at net asset value (3) — — — 357 Private real asset funds measured at net asset value (3) — — — 272 Private credit measured at net asset value (3) — — — 71 Commingled funds measured at net asset value (3) — — — 1,421 Total investments 1,432 500 — 4,053 Commodity contract derivatives — 250 — 250 Total $ 1,432 $ 750 $ — $ 4,303 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 83 $ — $ 83 Interest rate swaps — 1,639 — 1,639 Commodity contract derivatives — 3 — 3 Total $ — $ 1,725 $ — $ 1,725 Notes (1) Includes government-sponsored entities, including $573 million of U.S. Treasury securities within Level 1 of the fair value hierarchy. (2) Includes both U.S. and foreign debt. (3) Certain investments that are measured at fair value using the NAV 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 14 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . Other Financial Instruments Not Recorded at Fair Value TVA uses the methods and assumptions described below to estimate the fair value of each significant class of financial instruments. The fair value of the financial instruments held at June 30, 2022, and September 30, 2021, may not be representative of the actual gains or losses that will be recorded when these instruments mature or are called or presented for early redemption. The estimated values of TVA's financial instruments not recorded at fair value at June 30, 2022, and September 30, 2021, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At June 30, 2022 At September 30, 2021 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables, net (including current portion) Level 2 $ 63 $ 63 $ 72 $ 71 Loans and other long-term receivables, net (including current portion) Level 2 128 120 99 94 EnergyRight ® financing obligations (including current portion) Level 2 73 82 82 92 Unfunded loan commitments Level 2 — — — 3 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 21 25 23 30 Long-term outstanding power bonds, net (including current maturities) Level 2 18,412 19,916 18,485 24,309 Long-term debt of VIEs, net (including current maturities) Level 2 1,029 1,074 1,049 1,307 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 | 9 Months Ended |
Jun. 30, 2022 | |
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 (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Interest income $ 2 $ 3 $ 9 $ 9 External services 3 3 11 10 Gains (losses) on investments (11) 5 (13) 16 Miscellaneous — — 4 2 Total Other income (expense), net $ (6) $ 11 $ 11 $ 37 |
Benefit Plans
Benefit Plans | 9 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans TVA sponsors a 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 Tennessee Valley Authority Retirement System ("TVARS"), which is governed by its own board of directors. The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and nine months ended June 30, 2022 and 2021, were as follows: Components of TVA's Benefit Plans (1) (in millions) For the Three Months Ended June 30 For the Nine Months Ended June 30 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2022 2021 2022 2021 2022 2021 2022 2021 Service cost $ 13 $ 14 $ 5 $ 5 $ 39 $ 42 $ 13 $ 14 Interest cost 94 92 4 4 283 276 11 12 Expected return on plan assets (108) (123) — — (326) (369) — — Amortization of prior service credit (23) (24) (5) (5) (70) (73) (13) (14) Recognized net actuarial loss 97 113 2 3 294 340 5 8 Total net periodic benefit cost as actuarially determined 73 72 6 7 220 216 16 20 Amount expensed due to actions of regulator 3 5 — — 10 14 — — Total net periodic benefit cost $ 76 $ 77 $ 6 $ 7 $ 230 $ 230 $ 16 $ 20 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 2022 is $300 million. TVA contributes $25 million per month to TVARS and as of June 30, 2022, had contributed $225 million. The remaining $75 million will be contributed by September 30, 2022. For the nine months ended June 30, 2022, TVA also contributed $75 million to the 401(k) plan, $21 million (net of $3 million in rebates) to the other post-retirement plans, and $8 million to the SERP. |
Contingencies and Legal Proceed
Contingencies and Legal Proceedings | 9 Months Ended |
Jun. 30, 2022 | |
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 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 nuclear incident per reactor. Currently, 95 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 American Nuclear Insurers combined with the Secondary Financial Protection should provide up to approximately $13.5 billion in coverage. Federal law requires that each Nuclear Regulatory Commission ("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") and European Mutual Association for Nuclear Insurance. The limits available for a loss are up to $2.1 billion for two of TVA's nuclear sites and up to $2.8 billion for the remaining site. Some of this insurance may require the payment of retrospective premiums up to a maximum of approximately $115 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 $44 million, but only to the extent the retrospective premium is deemed necessary by the NEIL Board of Directors to pay losses unable to be covered by NEIL's surplus. Decommissioning Costs. TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets related primarily to nuclear generating plants, coal-fired generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets. See Note 11 — Asset Retirement Obligations . Nuclear Decommissioning . Provision for decommissioning costs of nuclear generating units is based on options prescribed by the NRC procedures to dismantle and decontaminate the facilities to meet the NRC criteria for license termination. At June 30, 2022, $3.5 billion, representing the discounted value of future estimated nuclear decommissioning costs, was included in nuclear 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, and TVA is currently performing a study with implementation expected in 2022. TVA maintains an NDT to provide funding for the ultimate decommissioning of its nuclear power plants. See Note 15 — Fair Value Measurements — Investment Funds . TVA monitors the value of its NDT and believes that, over the long term and before cessation of nuclear plant operations and commencement of decommissioning activities, adequate funds from investments and additional contributions, if necessary, will be available to support decommissioning. TVA's operating nuclear power units are licensed through various dates between 2033 - 2055, depending on the unit. It may be possible to extend the operating life of some of the units with approval from the NRC. See Note 8 — Regulatory Assets and Liabilities and Note 11 — Asset Retirement Obligations . Non-Nuclear Decommissioning . At June 30, 2022, $3.7 billion, representing the discounted value of future estimated non-nuclear decommissioning costs, was included in non-nuclear 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 15 — Fair Value Measurements — Investment Funds . Estimates involved in determining if additional funding will be made to the ART include inflation rate, rate of return projections on the fund investments, and the planned use of other sources to fund decommissioning costs. See Note 8 — Regulatory Assets and Liabilities and Note 11 — Asset Retirement Obligations . Environmental Matters. TVA's 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. Regulations in these major areas continue to become more stringent and have, and will continue 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 and emissions of pollutants from those units. Environmental requirements placed on the operation of coal-fired and other generating units using fossil fuels such as oil and natural gas will likely continue to become more restrictive over time. Failure to comply with environmental and safety requirements can result in enforcement actions and litigation, which can lead to the imposition of significant civil liability, including fines and penalties, criminal sanctions, and/or temporary or permanent closure of non-compliant facilities . Historical non-compliance can also lead to difficulty in renewing existing permits, as well as difficulty in obtaining permits to bring new generation facilities online. Other obstacles to renewal or permitting of new facilities include a proliferation of non-government organizations seeking to use litigation tools to delay or stop all together permitting of new fossil fuel facilities in favor of renewable energy projects. TVA estimates that compliance with existing and future Clean Air Act ("CAA") requirements (excluding GHG requirements) could lead to costs of $124 million from 2022 to 2026, which include existing controls capital projects and air operations and maintenance projects. TVA also estimates additional expenditures of approximately $1.0 billion from 2022 to 2026 relating to TVA's CCR Program, as well as expenditures of approximately $128 million from 2022 to 2026 relating to compliance with Clean Water Act ("CWA") 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, and these estimates do not include expenditures expected to be incurred after 2026. Compliance with the Environmental Protection Agency's ("EPA's") CCR rule ("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 where required. Liability for releases, natural resource damages, and required 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 governmental entities, 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 both June 30, 2022 and September 30, 2021, TVA's estimated liability for required cleanup and similar environmental work for those sites for which sufficient information is available to develop a cost estimate was approximately $18 million on a non-discounted basis, and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Additionally, the potential inclusion of new hazardous substances under CERCLA and RCRA jurisdiction could 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. If the litigation proceeds to the second phase, the principal question for resolution will be whether Jacobs's breaches were the specific medical cause of the plaintiffs' alleged injuries and damages. No trial date has been set for the second phase. On August 24, 2021, the U.S. Court of Appeals for the Sixth Circuit (the "Sixth Circuit") accepted Jacobs’s petition for interim appeal on issues relating to the availability of derivative governmental immunity as a defense to the plaintiffs’ claims. The Sixth Circuit held oral argument on Jacobs’s petition for interim appeal on March 11, 2022, and issued an opinion holding that Jacobs is not entitled to derivative governmental immunity on May 18, 2022. On September 29, 2021, the Eastern District certified four questions to the Tennessee Supreme Court regarding the applicability of the Tennessee Silicosis Claims Priority Act to the plaintiffs’ claims. The Eastern District’s order also stayed all proceedings pending the Tennessee Supreme Court’s decision. On March 24, 2022, the Tennessee Supreme Court accepted the four certified questions from the Eastern District, and oral argument on these questions was held on June 1, 2022. 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 June 30, 2022, TVA had accrued $11 million of probable losses in Other long-term liabilities with respect to 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 $282 million as of June 30, 2022. Additionally, TVA holds restricted cash in an interest earning trust to fund the remaining project commitments. 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, was approximately $9 million as of June 30, 2022. In exchange for these commitments, most past claims against TVA based on alleged New Source Review and associated violations were waived and cannot be brought against TVA. Future claims, including those for sulfuric acid mist and GHG emissions, can still be brought against TVA. The liabilities related to the Environmental Agreements are included in Accounts payable and accrued liabilities and Other long-term liabilities on the June 30, 2022 Consolidated Balance Sheets. In conjunction with the approval of the Environmental Agreements, the TVA Board determined that it was appropriate to record TVA's obligations under the Environmental Agreements as regulatory assets, and they are included as such on the June 30, 2022 Consolidated Balance Sheets and will be recovered in rates in future periods. Case Involving Kingston Fossil Plant . On August 12, 2021, an individual landowner and resident of Roane County, Tennessee, filed a lawsuit against TVA and Jacobs in the Eastern District. The complaint asserts claims for damage to property and personal injuries as a result of the 2008 ash spill at Kingston Fossil Plant and the resulting cleanup activities and from continuing operations at Kingston Fossil Plant. The complaint seeks compensatory damages of $8 million and punitive damages of $10 million. It also requests the court to order TVA to release certain information, to remediate alleged damages to the plaintiff's property, and to stop alleged migration of coal ash onto the plaintiff's property. On May 16, 2022, the court dismissed with prejudice the plaintiff’s claims against TVA for failure of the plaintiff to properly and timely serve TVA. In addition, on June 10, 2022, the court dismissed the plaintiff’s remaining claims against Jacobs on statute-of-limitations and other grounds. Case Involving Bull Run Fossil Plant. On August 3, 2021, four residents of Anderson County, Tennessee filed a lawsuit against TVA in the Eastern District. The complaint alleged that the plaintiffs live near Bull Run Fossil Plant ("Bull Run") and asserted claims for personal injuries resulting from exposures to CCR that migrated from Bull Run to their home and from second-hand exposures to CCR from a family member who worked with CCR. The complaint also asserted claims for damage to property resulting from the migration of CCR from Bull Run to their home. The plaintiffs sought monetary damages in an unspecified amount as compensation for their injuries and an award of punitive damages in an unspecified amount. The plaintiffs did not timely serve TVA with process, and the court dismissed the case without prejudice on May 5, 2022. On June 1, 2022, the plaintiffs filed a motion to reopen the case, and the court denied this motion on June 2, 2022. Case Involving Bellefonte Nuclear Plant. In November 2018, Nuclear Development, LLC ("Nuclear Development"), filed suit against TVA in the U.S. District Court for the Northern District of Alabama. Nuclear Development alleged that TVA breached its agreement to sell Bellefonte Nuclear Plant ("Bellefonte"). As a remedy, Nuclear Development sought, among other things, (1) an injunction requiring TVA to maintain Bellefonte and the associated NRC permits until the case concluded; (2) an order compelling TVA to complete the sale of Bellefonte; and (3) if the court does not order TVA to complete the sale, monetary damages in excess of $30 million. On September 23, 2020, the parties filed competing motions for summary judgment. On March 31, 2021, the court denied both parties' summary judgment motions; however, 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 the sale, relying on past NRC precedent to reach that conclusion. Notwithstanding the legal rulings, the court held that there were disputed issues of material fact as to whether TVA satisfied its contractual obligations to use commercially reasonable best efforts and to cooperate with Nuclear Development in effectuating the close of the sale. Trial took place in May 2021, and the parties filed post-trial briefs on June 9, 2021. Nuclear Development also filed a motion for judgment on partial findings and to reconsider the court's March 31 ruling. The court held closing arguments on July 1, 2021, and on August 26, 2021, the court issued its decision and final judgment. The court held that TVA did not breach its obligations to use commercially reasonable best efforts and to cooperate with Nuclear Development in effectuating the close of the sale. As a result, Nuclear Development is not entitled to specific performance or damages on that claim, and TVA retains full possession and control of the Bellefonte site; however, the court found that, under the contract's termination provision, Nuclear Development was entitled to have TVA return Nuclear Development's $22 million down payment and pay approximately $1 million of compensated costs, along with 7.5% prejudgment interest. Including post-judgment interest, TVA paid approximately $28 million to the court in September 2021 to satisfy the judgment. On July 18, 2022, the court denied Nuclear Development's post-trial motions, granted TVA's post-trial motions, and entered an Amended Final Judgement reflecting the correct prejudgment interest rate to be paid by TVA from the court-ordered 7.5% rate to the contractually-agreed 6% rate, entitling TVA to a return of the difference. Nuclear Development now has 60 days to appeal from the court's final judgement. 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 the United States District Court for the Western District of 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 ("Fourth Circuit") on April 15, 2021. The parties filed their briefs with the Fourth Circuit, and oral argument was held on January 27, 2022. Case 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, and the court denied TVA's motion to dismiss on August 12, 2021. On August 13, 2021, the court held argument on the plaintiffs' motion to complete the administrative record and took the matter under advisement. On August 26, 2021, TVA filed its answer to the amended complaint. On January 24, 2022, the court ordered TVA to supplement the administrative record with background materials pertaining to TVA's decision to offer the LTA and its decision that an environmental review under NEPA was not warranted. On February 14, 2022, TVA filed a motion to reconsider part of the court's January 24th order. On February 18, 2022, the court granted the parties' joint motion to establish a scheduling order, setting the deadline for supplementing the administrative record as of May 24, 2022. On May 24, 2022, TVA filed the supplemental administrative record. On July 14, 2022, the court denied TVA's motion to reconsider and ordered additional supplementation of the administrative record. Challenge to Anti-Cherrypicking Amendment. On January 11, 2021, Athens Utilities Board, Gibson Electric Membership Corporation, Joe Wheeler EMC, and Volunteer Energy Cooperative filed a complaint and petition with FERC asking FERC to order TVA to provide transmission and interconnection service to the LPCs or other suppliers that want to serve them. The petitioners seek to avoid the limitations of the Anti-Cherrypicking Amendment ("ACPA") to the Federal Power Act ("FPA"), which prohibits FERC from ordering TVA to wheel power from another supplier if the power will be consumed within the TVA service territory. The petitioners argue that section 211A of the FPA, which gives FERC limited jurisdiction over the rates, terms, and conditions of transmission service provided by unregulated transmitting utilities such as TVA, provides an alternate grant of authority to enable FERC to order TVA to wheel power inside its service area unrestricted by the application of the ACPA. The petitioners also argue that the public power model is antiquated and TVA’s refusal to wheel power is not in the public interest because it stifles competition. On August 31, 2021, Joe Wheeler EMC notified FERC of its withdrawal from the complaint and petition. On October 21, 2021, FERC denied the petition. On November 22, 2021, Athens Utilities Board and Gibson Electric Membership Corporation filed a request for rehearing, and on December 7, 2021, TVA filed a response asking FERC to deny the request for rehearing. On December 23, 2021, FERC entered an order denying the request for rehearing by operation of law and providing for possible further consideration by FERC. On February 18, 2022, Athens Utilities Board and Gibson Electric Membership Corporation petitioned the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") to review the FERC orders. TVA and several other parties have intervened in this case. On March 21, 2022, FERC filed an unopposed motion asking the court to stay the case so that FERC could issue a further order in the underlying proceeding, and the court granted this motion on April 7, 2022. On April 22, 2022, however, FERC issued a notice stating that the rehearing request will not be addressed in a future order. As a result, the appellate case will now move forward. On May 25, 2022, the D.C. Circuit issued an order holding the case in abeyance pending further order of the court and ordered the parties to file motions to govern future proceedings by June 30, 2022. On June 15, 2022, the petitioners filed an amended petition for review. On June 30, 2022, the petitioners filed an unopposed motion to govern future proceedings requesting that the court hold the case in abeyance for an additional 30 days. On August 1, 2022, the petitioners filed an unopposed motion to govern further proceedings with the court. Administrative Proceeding Regarding National Pollutant Discharge Elimination System Permit for Kingston . On December 28, 2021, the Sierra Club and the Center for Biological Diversity appealed the revised National Pollutant Discharge Elimination System ("NPDES") permit issued by the Tennessee Department of Environment and Conservation ("TDEC") for Kingston in December 2021 before the Tennessee Board of Water Quality, Oil, and Gas. The petitioners allege that TDEC unlawfully incorporated into the revised permit effluent limits for landfill leachate based on effluent limitation guidelines ("ELGs") for landfill leachate issued by the EPA in 1982 rather than establish new limits based on TDEC’s best professional judgment. TDEC is the respondent in the matter. TVA filed a motion to intervene, which was granted, and on April 8, 2022, the parties and TVA filed cross-motions for summary decisions. Oral argument on the cross-motions was held before an Administrative Judge on July 12, 2022, following which the judge stated that he was going to grant TVA's and TDEC's joint motion to dismiss the appeal and requested counsel for TDEC to prepare a proposed order dismissing the appeal. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Clean Energy RFP In July 2022, TVA issued a carbon-free RFP for up to 5,000 megawatts of carbon-free and renewable energy projects. This RFP includes a broad range of potential generation sources, including nuclear, green gas, solar, storage, and wind, among others, and supports TVA's decarbonization initiative as TVA continues to explore carbon-free technologies, bring on additional renewable energy, and work to meet customer demand of renewable energy. 2023 Budget On July 28, 2022, the TVA Board notationally approved TVA’s budget for 2023. The budget provides for the allocation and utilization of projected revenues of $12.4 billion in 2023 and, among other things, authorizes expenditures of $4.6 billion for fuel and purchased power, $3.3 billion for operating and maintenance expense, $1.1 billion for interest expense, and $1.0 billion for base capital spend. In addition, the budget provides for a 2.5 percent monthly base rate credit, which is an extension of the Pandemic Recovery Credit and is expected to approximate $230 million in 2023. In connection with approval of the budget, the TVA Board also authorized TVA to issue power bonds and enter into other financing arrangements in an aggregate amount not to exceed $2.0 billion during 2023. Valuation Changes in Derivative Transactions As of August 1, 2022, TVA’s interest rate swap derivative liability and related regulatory asset for unrealized losses are estimated to increase approximately $115 million compared to June 30, 2022, due to decreases in market interest rates. As of August 1, 2022, TVA’s commodity contract derivative asset and related regulatory liability for unrealized gains are estimated to increase approximately $100 million compared to June 30, 2022. There is estimated to be less than $1 million of change in the commodity contract derivative liability and related regulatory asset for unrealized losses compared to June 30, 2022. TVA's commodity derivative asset under the FHP and related regulatory liability for unrealized gains are estimated to increase approximately $150 million compared to June 30, 2022. TVA’s commodity derivative liability under the FHP and related regulatory asset for unrealized losses is estimated to decrease approximately $10 million compared to June 30, 2022. These changes are primarily due to recent increases in natural gas prices. |
Revenue (Notes)
Revenue (Notes) | 9 Months Ended |
Jun. 30, 2022 | |
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 91 percent of TVA's revenue from sales of electricity for the three and nine months ended June 30, 2022, respectively, 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 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 credits created to support directly served customers in 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 nine months ended June 30, 2022, revenues generated from TVA's electricity sales were $2.9 billion and $8.3 billion, respectively, and accounted for virtually all of TVA's revenues. TVA's operating revenues by state for the three and nine months ended June 30, 2022 and 2021, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Alabama $ 419 $ 359 $ 1,203 $ 1,072 Georgia 69 60 207 184 Kentucky 195 163 556 457 Mississippi 283 237 788 686 North Carolina 20 15 63 49 Tennessee 1,929 1,646 5,455 4,810 Virginia 10 10 34 31 Subtotal 2,925 2,490 8,306 7,289 Off-system sales 7 1 12 5 Revenue from sales of electricity 2,932 2,491 8,318 7,294 Other revenue 38 36 119 109 Total operating revenues $ 2,970 $ 2,527 $ 8,437 $ 7,403 TVA's operating revenues by customer type for the three and nine months ended June 30, 2022 and 2021, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Revenue from sales of electricity Local power companies $ 2,662 $ 2,283 $ 7,576 $ 6,711 Industries directly served 229 179 640 501 Federal agencies and other 41 29 102 82 Revenue from sales of electricity 2,932 2,491 8,318 7,294 Other revenue 38 36 119 109 Total operating revenues $ 2,970 $ 2,527 $ 8,437 $ 7,403 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 automatically renew each year and have a 20-year termination notice. The partnership arrangements can be terminated under certain circumstances, including TVA's failure to limit rate increases as provided for in the agreements 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 Partnership Agreement were $48 million and $43 million, respectively, for the three months ended June 30, 2022 and 2021. The total wholesale bill credits to LPCs participating in the Partnership Agreement were $141 million and $133 million, respectively, for the nine months ended June 30, 2022 and 2021. In 2020, TVA provided participating LPCs a flexibility option, renamed Generation Flexibility, that allows them to locally generate or purchase up to approximately five percent of average total hourly energy sales over 2015 - 2019 in order to meet their individual customers' needs. As of August 1, 2022, 146 LPCs had signed the Partnership Agreement with TVA, and 79 LPCs had signed a Power Supply Flexibility Agreement. In 2020, the TVA Board approved a Pandemic Relief Credit which was effective for 2021 as a 2.5 percent monthly base rate credit. In 2021, the TVA Board approved a 2.5 percent monthly base rate credit, the Pandemic Recovery Credit, which is effective for 2022. These pandemic credits apply to service provided to TVA's LPCs, their large commercial and industrial customers, and TVA directly served customers. The credit effective for 2022 is expected to approximate $220 million. For the three months ended June 30, 2022 and 2021, pandemic credits totaled $56 million and $52 million, respectively. For the nine months ended June 30, 2022 and 2021, pandemic credits totaled $161 million and $156 million, respectively. In addition, in November 2021 the TVA Board approved a 1.5 percent monthly base rate credit, which is an extension of the Pandemic Recovery Credit, to be effective for 2023, and on July 28, 2022, the TVA Board notationally approved increasing the credit from 1.5 percent to 2.5 percent. The 2023 credit is expected to approximate $230 million, and it will be administered in a manner similar to the current Pandemic Recovery Credit. The number of LPCs by contract arrangement, the revenues derived from such arrangements for the three and nine months ended June 30, 2022, 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 June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 2,250 75.8 % 5-year termination notice 7 412 13.9 % Total 153 $ 2,662 89.7 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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 Nine Months Ended June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 6,473 76.7 % 5-year termination notice 7 1,103 13.1 % Total 153 $ 7,576 89.8 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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 nine months ended June 30, 2022 and the nine months ended June 30, 2021. Certain LPCs, including MLGW, are evaluating options for future energy choices. In addition, two LPCs — Athens Utility Board and Gibson Electric Membership Corporation — are pursuing an appeal of a Federal Energy Regulatory Commission ("FERC") order denying their request that FERC require TVA to provide transmission and interconnection service to the LPCs or other suppliers that want to serve them. These LPCs accounted for one percent of TVA's total operating revenues for the nine months ended June 30, 2022. See Note 20 — Contingencies and Legal Proceedings — Legal Proceedings — Challenge to Anti-Cherrypicking Amendment for updates to this legal proceeding. 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 did not have any material contract assets at June 30, 2022. 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. See Economic Development Incentives below. 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 $81 million and $82 million for the three months ended June 30, 2022 and the three months ended June 30, 2021, respectively. Incentives recorded as a reduction to revenue were $249 million and $239 million for the nine months ended June 30, 2022 and the nine months ended June 30, 2021, 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 June 30, 2022, and |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accounting Policies [Abstract] | |||
General | General The Tennessee Valley Authority ("TVA") is a corporate agency and instrumentality of the United States ("U.S.") that was created in 1933 by federal legislation in response to a proposal by President Franklin D. Roosevelt. TVA was created to, among other things, improve navigation on the Tennessee River, reduce the damage from destructive flood waters within the Tennessee River system and downstream on the lower Ohio and Mississippi Rivers, further the economic development of TVA's service area in the southeastern U.S., and sell the electricity generated at the facilities TVA operates. Today, TVA operates the nation's largest public power system and supplies power in most of Tennessee, northern Alabama, northeastern Mississippi, and southwestern Kentucky and in portions of northern Georgia, western North Carolina, and southwestern Virginia to a population of 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. TVA performs these management duties in cooperation with other federal and state agencies that have jurisdiction and authority over certain aspects of the river system. In addition, the TVA Board of Directors ("TVA Board") has established two councils — the Regional Resource Stewardship Council and the Regional Energy Resource Council — to advise TVA on its stewardship activities in the Tennessee Valley and its energy resource activities. 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 | ||
Fiscal Year | Fiscal Year TVA's fiscal year ends September 30. Years (2022, 2021, 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 TVA is no longer considered to be a regulated entity, then costs would be required to be written off. All regulatory asset write-offs would be required to be recognized in earnings in the period in which future recovery ceases to be probable. | ||
Basis of Presentation | Basis of Presentation TVA prepares its consolidated interim financial statements in conformity with GAAP for consolidated interim financial information. Accordingly, TVA's consolidated interim financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, they should be read in conjunction with the audited financial statements for the year ended September 30, 2021, and the notes thereto, which are contained in TVA's Annual Report on Form 10-K for the year ended September 30, 2021 (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 9 — 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, 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 and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | 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 include cash held in trusts that are currently restricted for TVA economic development loans and for certain TVA environmental programs in accordance with agreements related to compliance with certain environmental regulations. See Note 20 — Contingencies and Legal Proceedings — Legal Proceedings — Environmental Agreements . The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Consolidated Balance Sheets and Consolidated Statements of Cash Flows: Cash, Cash Equivalents, and Restricted Cash (in millions) At June 30, 2022 At September 30, 2021 Cash and cash equivalents $ 501 $ 499 Restricted cash and cash equivalents included in Other long-term assets 20 19 Total cash, cash equivalents, and restricted cash $ 521 $ 518 | ||
Allowance for Uncollectible Accounts | Allowance for Uncollectible Accounts TVA recognizes 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 collectability of the reported amounts. The appropriateness of the allowance is evaluated at the end of each reporting period. TVA continues to monitor the impact of the coronavirus disease 2019 ("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 Current Expected Credit Losses. 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 June 30, 2022, and September 30, 2021, respectively, for trade accounts receivable. Additionally, loans receivable of $128 million and $99 million at June 30, 2022, and September 30, 2021, 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 $4 million at both June 30, 2022 and September 30, 2021. | ||
Revenue | 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 | Depreciation TVA accounts for depreciation of its properties using the composite depreciation convention of accounting. Under the composite method, assets with similar economic characteristics are grouped and depreciated as one asset. Depreciation is generally computed on a straight-line basis over the estimated service lives of the various classes of assets. The estimation of asset useful lives requires management judgment, supported by external depreciation studies of historical asset retirement experience. Depreciation rates are determined based on external depreciation studies that are updated approximately every five years. During the first quarter of 2022, TVA implemented a new depreciation study related to its completed plant. The new study included a decline in the service life estimates of TVA's coal-fired plants based on current planning assumptions to potentially retire the remainder of the coal-fired fleet by 2035. Property, Plant, and Equipment Depreciation Rates Implemented Rates (1) At September 30, 2021 Asset Class Nuclear 2.72 2.38 Coal-fired 3.98 1.95 Hydroelectric 1.95 1.60 Gas and oil-fired 3.45 2.98 Transmission 1.45 1.34 Other 3.21 7.12 Note (1) Implemented rates represent average rates for each asset class as determined by the depreciation study and were applicable beginning October 1, 2021. Depreciation expense was $459 million and $347 million for the three months ended June 30, 2022 and 2021, respectively. Depreciation expense was $1.4 billion and $1.0 billion for the nine months ended June 30, 2022 and 2021, respectively. Implementation of the new depreciation rates resulted in an estimated increase of approximately $309 million in depreciation and amortization expense for the nine months ended June 30, 2022, as compared to the same period of the prior year. This estimate represents the effect of using the new depreciation rates on the property, plant, and equipment balances at June 30, 2021, and does not include any potential impact from additions to or retirements of net completed plant that occurred since June 30, 2021. See Note 6 — Plant Closures |
Accounting Changes and Error Co
Accounting Changes and Error Corrections (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
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 that TVA adopted during 2022: Lessor-Certain Leases with Variable Lease Payments Description This guidance amends the lessor lease classification for leases that have variable lease payments that are not based on an index or rate. If the lease meets the criteria for classification as either (1) a sale-type or (2) a direct finance lease, and application of the lease guidance would result in recognition of a day-one selling loss, then the lease should be classified as an operating lease. There are two transition methods provided by the guidance for entities that have adopted the standard: • Retrospective application to leases that commenced or were modified after the beginning of the period in which the standard was adopted, or • Prospective application to leases that commence or are modified subsequent to the date that amendments in the guidance are first applied. Effective Date for TVA October 1, 2021 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a prospective basis. Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. 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 ("SOFR"). Effective Date for TVA December 31, 2021 Effect on the Financial Statements or Other Significant Matters TVA had interest rate swap contracts that totaled a notional value of $1.5 billion at December 31, 2021, that were indexed to LIBOR. TVA adopted the International Swaps and Derivative Association’s ("ISDA’s") LIBOR fallback protocol for interest rate swaps prior to December 31, 2021. Under this protocol, U.S. dollar LIBOR transactions would fall back to the SOFR upon cessation of the related LIBOR publication. The interest rate swap contracts did not receive hedge accounting treatment, and therefore TVA did not elect any optional expedients for this modification. TVA does not have any other significant contracts, including lease agreements, that include payments indexed to LIBOR. Therefore, the change of reference rate did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standards have been issued but, at June 30, 2022, were not effective and had not been adopted by TVA: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Description This guidance requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue with customers. It is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured contract assets and contract liabilities in the acquiree’s financial statement. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. Troubled Debt Restructurings and Vintage Disclosures Description This guidance eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted Financial Instruments-Credit Losses and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. Additionally, the guidance requires public business entities to present current-period gross write-offs by year of origination in their vintage disclosures. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Text Block [Abstract] | |
Consolidation, Variable Interest Entity, Policy | A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of owning a controlling financial interest. When TVA determines that it has a variable interest in a VIE, a qualitative evaluation is performed to assess which interest holders have the power to direct the activities that most significantly impact the economic performance of the entity and have the obligation to absorb losses or receive benefits that could be significant to the entity. The evaluation considers the purpose and design of the business, the risks that the business was designed to create and pass along to other entities, the activities of the business that can be directed and which party can direct them, and the expected relative impact of those activities on the economic performance of the business through its life. TVA has the power to direct the activities of an entity when it has the ability to make key operating and financing decisions, including, but not limited to, capital investment and the issuance of debt. Based on the evaluation of these criteria, TVA has determined it is the primary beneficiary of certain entities and as such is required to account for the VIEs on a consolidated basis. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Cash, Cash Equivalents, and Restricted Cash (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, Cash Equivalents, and Restricted Cash (in millions) At June 30, 2022 At September 30, 2021 Cash and cash equivalents $ 501 $ 499 Restricted cash and cash equivalents included in Other long-term assets 20 19 Total cash, cash equivalents, and restricted cash $ 521 $ 518 |
Impact of New Accounting Stan_2
Impact of New Accounting Standards and Interpretations Impact of New Accounting Standards and Interpretations (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Lessor-Certain Leases with Variable Lease Payments Description This guidance amends the lessor lease classification for leases that have variable lease payments that are not based on an index or rate. If the lease meets the criteria for classification as either (1) a sale-type or (2) a direct finance lease, and application of the lease guidance would result in recognition of a day-one selling loss, then the lease should be classified as an operating lease. There are two transition methods provided by the guidance for entities that have adopted the standard: • Retrospective application to leases that commenced or were modified after the beginning of the period in which the standard was adopted, or • Prospective application to leases that commence or are modified subsequent to the date that amendments in the guidance are first applied. Effective Date for TVA October 1, 2021 Effect on the Financial Statements or Other Significant Matters TVA adopted this standard on a prospective basis. Adoption of this standard did not have a material impact on TVA's financial condition, results of operations, or cash flows. 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 ("SOFR"). Effective Date for TVA December 31, 2021 Effect on the Financial Statements or Other Significant Matters TVA had interest rate swap contracts that totaled a notional value of $1.5 billion at December 31, 2021, that were indexed to LIBOR. TVA adopted the International Swaps and Derivative Association’s ("ISDA’s") LIBOR fallback protocol for interest rate swaps prior to December 31, 2021. Under this protocol, U.S. dollar LIBOR transactions would fall back to the SOFR upon cessation of the related LIBOR publication. The interest rate swap contracts did not receive hedge accounting treatment, and therefore TVA did not elect any optional expedients for this modification. TVA does not have any other significant contracts, including lease agreements, that include payments indexed to LIBOR. Therefore, the change of reference rate did not have a material impact on TVA’s financial condition, results of operations, or cash flows. The following accounting standards have been issued but, at June 30, 2022, were not effective and had not been adopted by TVA: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Description This guidance requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue with customers. It is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured contract assets and contract liabilities in the acquiree’s financial statement. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. Troubled Debt Restructurings and Vintage Disclosures Description This guidance eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted Financial Instruments-Credit Losses and requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. Additionally, the guidance requires public business entities to present current-period gross write-offs by year of origination in their vintage disclosures. Effective Date for TVA This new standard is effective for TVA’s interim and annual reporting periods beginning October 1, 2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early. Effect on the Financial Statements or Other Significant Matters TVA does not expect the adoption of this standard to have a material impact on its financial condition, results of operations, or cash flows. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 (in millions) At June 30, 2022 At September 30, 2021 Power receivables $ 1,677 $ 1,480 Other receivables 73 86 Accounts receivable, net (1) $ 1,750 $ 1,566 Note |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Inventory, Net [Abstract] | |
Inventories, Net | The table below summarizes the types and amounts of TVA's inventories: Inventories, Net (in millions) At June 30, 2022 At September 30, 2021 Materials and supplies inventory $ 804 $ 775 Fuel inventory 246 198 Renewable energy certificates/emissions allowance inventory, net 18 12 Allowance for inventory obsolescence (55) (35) Inventories, net $ 1,013 $ 950 |
Deferred Costs, Capitalized, _2
Deferred Costs, Capitalized, Prepaid, and Other Assets (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: Other Current Assets (in millions) At June 30, 2022 At September 30, 2021 Commodity contract derivative assets $ 163 $ 210 Other 106 77 Other current assets $ 269 $ 287 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 At September 30, 2021 Loans and other long-term receivables, net $ 125 $ 96 EnergyRight ® receivables, net 50 57 Prepaid long-term service agreements 60 44 Commodity contract derivative assets 88 40 Other 78 83 Total other long-term assets $ 401 $ 320 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 At September 30, 2021 Current regulatory assets Unrealized losses on interest rate derivatives $ 71 $ 114 Unrealized losses on commodity derivatives 14 3 Fuel cost adjustment receivable 304 79 Total current regulatory assets 389 196 Non-current regulatory assets Deferred pension costs and other post-retirement benefits costs 3,442 3,668 Non-nuclear decommissioning costs 2,872 2,653 Unrealized losses on interest rate derivatives 645 1,122 Nuclear decommissioning costs 686 363 Unrealized losses on commodity derivatives 5 — Other non-current regulatory assets 139 150 Total non-current regulatory assets 7,789 7,956 Total regulatory assets $ 8,178 $ 8,152 Current regulatory liabilities Fuel cost adjustment tax equivalents $ 165 $ 130 Unrealized gains on commodity derivatives 166 210 Total current regulatory liabilities 331 340 Non-current regulatory liabilities Unrealized gains on commodity derivatives 88 40 Total non-current regulatory liabilities 88 40 Total regulatory liabilities $ 419 $ 380 TVA reinstated the FHP in December 2021, and hedging activity began under the program in the second quarter of 2022. Currently, TVA is hedging exposure to the price of natural gas under the FHP. Deferred gains and losses relating to TVA’s FHP are included as part of unrealized gains and losses on commodity derivatives. TVA defers all mark-to-market ("MtM") unrealized gains or losses as regulatory liabilities or assets, respectively, and records the realized gains or losses in fuel and purchased power expense as the contracts settle to match the delivery period of the underlying commodity. This accounting treatment reflects TVA's ability and intent to include the realized gains or losses of these commodity contracts in future periods through the fuel cost adjustment. Net unrealized gains and losses for any settlements that occur within 12 months or less are classified as a current regulatory liability or asset. See Note 14 — Risk Management Activities and Derivative Transactions . |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Text Block [Abstract] | |
Schedule of Variable Interest Entities | The financial statement items attributable to carrying amounts and classifications of JSCCG, Holdco, and SCCG at June 30, 2022, and September 30, 2021, as reflected on the Consolidated Balance Sheets, are as follows: Summary of Impact of VIEs on Consolidated Balance Sheets (in millions) At June 30, 2022 At September 30, 2021 Current liabilities Accrued interest $ 22 $ 10 Accounts payable and accrued liabilities 3 3 Current maturities of long-term debt of variable interest entities 44 43 Total current liabilities 69 56 Other liabilities Other long-term liabilities 18 20 Long-term debt, net Long-term debt of variable interest entities, net 985 1,006 Total liabilities $ 1,072 $ 1,082 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-Term Liabilities | The table below summarizes the types and amounts of Other long-term liabilities: Other Long-Term Liabilities (in millions) At June 30, 2022 At September 30, 2021 (1) Interest rate swap liabilities $ 1,002 $ 1,524 Operating lease liabilities 111 122 Currency swap liabilities 123 76 EnergyRight ® financing obligation 58 66 Long-term deferred compensation 35 42 Advances for construction 50 24 Long-term deferred revenue 39 37 Accrued long-term service agreements 9 29 Other 133 121 Total other long-term liabilities $ 1,560 $ 2,041 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Activity | Asset Retirement Obligation Activity Nuclear Non-Nuclear Total Balance at September 30, 2021 $ 3,428 $ 3,574 $ 7,002 (1) Settlements (2) (195) (197) Revisions in estimate 3 237 240 Accretion (recorded as regulatory asset) 116 50 166 Balance at June 30, 2022 $ 3,545 $ 3,666 $ 7,211 (1) Note (1) Includes $313 million and $266 million at June 30, 2022, and September 30, 2021, respectively, recorded in Current liabilities. The revisions in non-nuclear estimates increased the liability balance by $237 million for the nine months ended June 30, 2022. TVA implemented revised depreciation rates during the first quarter of 2022 applicable to its completed plant as a result of the completion of a new depreciation study. The study included a decline in the service life estimates of TVA’s coal-fired plants based on current planning assumptions to potentially retire the remainder of the coal-fired fleet by 2035. As a result of the change in the service life estimates reflected in the depreciation study, TVA performed an assessment of the assumptions used in the timing of cash flows related to its non-nuclear AROs. Based on the assessment, TVA identified changes to its projections of timing of certain asset retirement activities, resulting in an increase of $47 million to the ARO. In addition, TVA completed an engineering review of its cost estimates for closure of certain areas containing coal fines at Paradise Fossil Plant, resulting in an increase of $119 million due to expected cost increases for necessary changes in activities associated with proper completion of the closure. During the second quarter of 2022, based on refined project cost assumptions and scope changes, TVA revised its AROs for the closure of certain coal yards at its fossil plants, resulting in an increase to AROs of $57 million. During the third quarter, coal combustion residual ("CCR") closure liabilities at Paradise and Cumberland Fossil Plants increased $82 million due to new vendor bids, modified closure designs, and revised estimates for construction costs. Partially offsetting these increases, was a reduction in expected CCR post-closure care costs for maintenance and monitoring at Paradise, Shawnee, and Colbert Fossil Plants resulting in a decrease in these liabilities of $53 million. |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Total debt outstanding at June 30, 2022, and September 30, 2021, consisted of the following: Debt Outstanding At June 30, 2022 At September 30, 2021 Short-term debt Short-term debt, net $ 1,034 $ 780 Current maturities of power bonds issued at par 1,029 1,028 Current maturities of long-term debt of VIEs issued at par 44 43 Total current debt outstanding, net 2,107 1,851 Long-term debt Long-term power bonds (1) 17,491 17,572 Long-term debt of VIEs, net 985 1,006 Unamortized discounts, premiums, issue costs, and other (108) (115) Total long-term debt, net 18,368 18,463 Total debt outstanding $ 20,475 $ 20,314 Note (1) Includes net exchange gain from currency transactions of $110 million and $58 million at June 30, 2022, and September 30, 2021, respectively. |
Debt Securities Activity | Debt Securities Activity The table below summarizes the long-term debt securities activity for the period from October 1, 2021, to June 30, 2022: Debt Securities Activity Date Amount (in millions) Redemptions/Maturities (1) 2009 Series B December 2021 $ 1 2009 Series B June 2022 27 Total redemptions/maturities of power bonds 28 Debt of variable interest entities 21 Total redemptions/maturities of debt $ 49 Note (1) All redemptions were at 100 percent of par. |
Risk Management Activities an_2
Risk Management Activities and Derivative Transactions (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 June 30 Nine Months Ended June 30 Derivatives in Cash Flow Hedging Relationship Objective of Hedge Transaction Accounting for Derivative 2022 2021 2022 2021 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 $ (40) $ 35 $ (50) $ 158 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 June 30 Nine Months Ended June 30 Derivatives in Cash Flow Hedging Relationship 2022 2021 2022 2021 Currency swaps $ (34) $ 64 $ (50) $ 114 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 $25 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 loss on the debt. |
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment | Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment Amount of Gain (Loss) Recognized in Income on Derivatives (1) Three Months Ended June 30 Nine Months Ended June 30 Derivative Type Objective of Derivative Accounting for Derivative Instrument 2022 2021 2022 2021 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 liabilities and assets, respectively Realized gains and losses are recognized in Interest expense when incurred during the settlement period and are presented in operating cash flow $ (26) $ (29) $ (83) $ (86) Commodity derivatives To protect against fluctuations in market prices of purchased commodities (price risk) Mark-to-market gains and losses are recorded as regulatory liabilities and assets, respectively Realized gains and losses are recognized in Fuel expense or Purchased power expense as the contracts settle to match the delivery period of the underlying commodity (2) 14 — 14 — 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 nine months ended June 30, 2022 and for the three and nine months ended June 30, 2021. (2) Amount recognized in 2022 is solely reported in Fuel expense. |
Fair Value of TVA Derivatives | Fair Values of TVA Derivatives (in millions) At June 30, 2022 At September 30, 2021 Derivatives That Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Currency swaps £250 million Sterling $ (69) Accounts payable and accrued liabilities $(6); Other long-term liabilities $(63) $ (36) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(32) £150 million Sterling (64) Accounts payable and accrued liabilities $(4); Other long-term liabilities $(60) (47) Accounts payable and accrued liabilities $(3); Other long-term liabilities $(44) Derivatives That Do Not Receive Hedge Accounting Treatment: Balance Balance Sheet Presentation Balance Balance Sheet Presentation Interest rate swaps $1.0 billion notional $ (791) Accounts payable and accrued liabilities $(40); Accrued interest $(15); Other long-term liabilities $(736) $ (1,182) Accounts payable and accrued liabilities $(44); Accrued interest $(37); Other long-term liabilities $(1,101) $476 million notional (283) Accounts payable and accrued liabilities $(16); Accrued interest $(1); Other long-term liabilities $(266) (455) Accounts payable and accrued liabilities $(22); Accrued interest $(10); Other long-term liabilities $(423) $42 million notional (1) — N/A (2) Accounts payable and accrued liabilities $(1); Accrued interest $(1) Commodity contract derivatives 183 Other current assets $154; Other long-term assets $36; Accounts payable and accrued liabilities $(4); Other long-term liabilities $(3) 247 Other current assets $210; Other long-term assets $40; Accounts payable and accrued liabilities $(3) Commodity derivatives under the FHP 52 Accounts receivable, net $3; Other current assets $9; Other long-term assets $52; Accounts payable and accrued liabilities $(10); Other long-term liabilities $(2) — N/A Note (1) At September 30, 2021, represented two interest rate swaps with notional amounts of $28 million and $14 million. In 2022, final payments were made on both of the interest rate swaps. |
Commodity Contract Derivatives | Commodity Contract Derivatives At June 30, 2022 At September 30, 2021 Number of Contracts Notional Amount Fair Value (MtM) (in millions) Number of Contracts Notional Amount Fair Value (MtM) (in millions) Natural gas contract derivatives 60 364 million mmBtu $ 183 40 263 million mmBtu $ 247 |
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 June 30, 2022 At September 30, 2021 Assets Commodity contract derivatives $ 190 $ 250 Commodity derivatives under the FHP (2) 64 — Total derivatives subject to master netting or similar arrangement $ 254 $ 250 Liabilities Currency swaps $ 133 $ 83 Interest rate swaps (3) 1,074 1,639 Commodity contract derivatives 7 3 Commodity derivatives under the FHP (2) 12 — Total derivatives subject to master netting or similar arrangement $ 1,226 $ 1,725 Notes (1) Offsetting amounts include counterparty netting of derivative contracts. Except as discussed below, there were no other material offsetting amounts on TVA's Consolidated Balance Sheets at either June 30, 2022, or September 30, 2021. (2) At June 30, 2022, the gross derivative asset and gross derivative liability was $86 million and $34 million, respectively, with offsetting amounts for each totaling $22 million. TVA received $10 million of collateral from counterparties as of June 30, 2022, which is recorded separately from the fair values of the derivative assets and liabilities and reported in Accounts payable and accrued liabilities. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 June 30 Nine Months Ended June 30 Fund Financial Statement Presentation 2022 2021 2022 2021 NDT Regulatory assets $ (331) $ 107 $ (305) $ 361 ART Regulatory assets (139) 48 (147) 168 SERP Other income (expense) (9) 3 (14) 8 DCP Other income (expense) (2) 1 (4) 1 |
Fair Value Measurements | Fair Value Measurements (in millions) Quoted Prices in Active Significant Other Significant Total Assets Investments Equity securities $ 572 $ — $ — $ 572 Government debt securities (1) 438 20 — 458 Corporate debt securities (2) — 310 — 310 Mortgage and asset-backed securities — 75 — 75 Institutional mutual funds 187 — — 187 Forward debt securities contracts — 2 — 2 Private equity funds measured at net asset value (3) — — — 449 Private real asset funds measured at net asset value (3) — — — 345 Private credit measured at net asset value (3) — — — 99 Commingled funds measured at net asset value (3) — — — 1,254 Total investments 1,197 407 — 3,751 Commodity contract derivatives — 190 — 190 Commodity derivatives under the FHP — 64 — 64 Total $ 1,197 $ 661 $ — $ 4,005 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 133 $ — $ 133 Interest rate swaps — 1,074 — 1,074 Commodity contract derivatives — 7 — 7 Commodity derivatives under FHP — 12 — 12 Total $ — $ 1,226 $ — $ 1,226 Notes (1) Includes government-sponsored entities, including $438 million of U.S. Treasury securities within Level 1 of the fair value hierarchy. (2) Includes both U.S. and foreign debt. (3) Certain investments that are measured at fair value using the NAV 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 14 — 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 $ 634 $ — $ — $ 634 Government debt securities (1) 573 24 — 597 Corporate debt securities (2) — 411 — 411 Mortgage and asset-backed securities — 63 — 63 Institutional mutual funds 225 — — 225 Forward debt securities contracts — 2 — 2 Private equity funds measured at net asset value (3) — — — 357 Private real asset funds measured at net asset value (3) — — — 272 Private credit measured at net asset value (3) — — — 71 Commingled funds measured at net asset value (3) — — — 1,421 Total investments 1,432 500 — 4,053 Commodity contract derivatives — 250 — 250 Total $ 1,432 $ 750 $ — $ 4,303 Quoted Prices in Active Significant Other Significant Total Liabilities Currency swaps (4) $ — $ 83 $ — $ 83 Interest rate swaps — 1,639 — 1,639 Commodity contract derivatives — 3 — 3 Total $ — $ 1,725 $ — $ 1,725 Notes (1) Includes government-sponsored entities, including $573 million of U.S. Treasury securities within Level 1 of the fair value hierarchy. (2) Includes both U.S. and foreign debt. (3) Certain investments that are measured at fair value using the NAV 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 14 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . |
Estimated Values of Financial Instruments Not Recorded at Fair Value | The estimated values of TVA's financial instruments not recorded at fair value at June 30, 2022, and September 30, 2021, were as follows: Estimated Values of Financial Instruments Not Recorded at Fair Value (in millions) At June 30, 2022 At September 30, 2021 Valuation Classification Carrying Fair Carrying Fair EnergyRight ® receivables, net (including current portion) Level 2 $ 63 $ 63 $ 72 $ 71 Loans and other long-term receivables, net (including current portion) Level 2 128 120 99 94 EnergyRight ® financing obligations (including current portion) Level 2 73 82 82 92 Unfunded loan commitments Level 2 — — — 3 Membership interests of VIEs subject to mandatory redemption (including current portion) Level 2 21 25 23 30 Long-term outstanding power bonds, net (including current maturities) Level 2 18,412 19,916 18,485 24,309 Long-term debt of VIEs, net (including current maturities) Level 2 1,029 1,074 1,049 1,307 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | 17. Other Income (Expense), Net Income and expenses not related to TVA's operating activities are summarized in the following table: Other Income (Expense), Net (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Interest income $ 2 $ 3 $ 9 $ 9 External services 3 3 11 10 Gains (losses) on investments (11) 5 (13) 16 Miscellaneous — — 4 2 Total Other income (expense), net $ (6) $ 11 $ 11 $ 37 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of TVA's Benefit Plans | The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three and nine months ended June 30, 2022 and 2021, were as follows: Components of TVA's Benefit Plans (1) (in millions) For the Three Months Ended June 30 For the Nine Months Ended June 30 Pension Benefits Other Post-Retirement Benefits Pension Benefits Other Post-Retirement Benefits 2022 2021 2022 2021 2022 2021 2022 2021 Service cost $ 13 $ 14 $ 5 $ 5 $ 39 $ 42 $ 13 $ 14 Interest cost 94 92 4 4 283 276 11 12 Expected return on plan assets (108) (123) — — (326) (369) — — Amortization of prior service credit (23) (24) (5) (5) (70) (73) (13) (14) Recognized net actuarial loss 97 113 2 3 294 340 5 8 Total net periodic benefit cost as actuarially determined 73 72 6 7 220 216 16 20 Amount expensed due to actions of regulator 3 5 — — 10 14 — — Total net periodic benefit cost $ 76 $ 77 $ 6 $ 7 $ 230 $ 230 $ 16 $ 20 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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
State [Table Text Block] | TVA's operating revenues by state for the three and nine months ended June 30, 2022 and 2021, are detailed in the table below: Operating Revenues By State (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Alabama $ 419 $ 359 $ 1,203 $ 1,072 Georgia 69 60 207 184 Kentucky 195 163 556 457 Mississippi 283 237 788 686 North Carolina 20 15 63 49 Tennessee 1,929 1,646 5,455 4,810 Virginia 10 10 34 31 Subtotal 2,925 2,490 8,306 7,289 Off-system sales 7 1 12 5 Revenue from sales of electricity 2,932 2,491 8,318 7,294 Other revenue 38 36 119 109 Total operating revenues $ 2,970 $ 2,527 $ 8,437 $ 7,403 | |
Revenue from External Customers by Products and Services [Table Text Block] | TVA's operating revenues by customer type for the three and nine months ended June 30, 2022 and 2021, are detailed in the table below: Operating Revenues by Customer Type (in millions) Three Months Ended June 30 Nine Months Ended June 30 2022 2021 2022 2021 Revenue from sales of electricity Local power companies $ 2,662 $ 2,283 $ 7,576 $ 6,711 Industries directly served 229 179 640 501 Federal agencies and other 41 29 102 82 Revenue from sales of electricity 2,932 2,491 8,318 7,294 Other revenue 38 36 119 109 Total operating revenues $ 2,970 $ 2,527 $ 8,437 $ 7,403 | |
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 nine months ended June 30, 2022, 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 June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 2,250 75.8 % 5-year termination notice 7 412 13.9 % Total 153 $ 2,662 89.7 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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 Nine Months Ended June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 6,473 76.7 % 5-year termination notice 7 1,103 13.1 % Total 153 $ 7,576 89.8 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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) | 9 Months Ended |
Jun. 30, 2022 | |
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 nine months ended June 30, 2022, 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 June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 2,250 75.8 % 5-year termination notice 7 412 13.9 % Total 153 $ 2,662 89.7 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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 Nine Months Ended June 30, 2022 Contract Arrangements (1) Number of LPCs Revenue from Sales of Electricity to LPCs (in millions) Percentage of Total Operating Revenues 20-year termination notice 146 $ 6,473 76.7 % 5-year termination notice 7 1,103 13.1 % Total 153 $ 7,576 89.8 % Note (1) Ordinarily, the LPCs and TVA have the same termination notice period; however, in a contract with one of the LPCs with five-year termination notice, 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_4
Summary of Significant Accounting Policies General and Basis of Presentation (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 USD ($) People | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) People | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | |
Accounting Policies [Abstract] | |||||
Population of TVA's service area | People | 10 | 10 | |||
Appropriation-investment power program | $ 1,000 | ||||
Depreciation expense | $ 459 | $ 347 | $ 1,400 | $ 1,000 |
Accounting Policies Cash and Ca
Accounting Policies Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and Cash Equivalents, at Carrying Value | $ 501 | $ 499 | ||
Restricted Cash and Cash Equivalents, Noncurrent | 20 | 19 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 521 | $ 518 | $ 519 | $ 521 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Allowance for Uncollectible Accounts (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Portion at Other than Fair Value Measurement [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, after Allowance for Credit Loss | $ 128 | $ 99 |
Allowance for uncollectible accounts | 1 | 1 |
Financing Receivable, after Allowance for Credit Loss | 120 | 94 |
Loans and Leases Receivable, Allowance | $ 4 | $ 4 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Revenues (Details) | Jun. 30, 2022 Units |
Accounting Policies [Abstract] | |
Number of customers with billing dates before month end | 5 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Depreciation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 459 | $ 347 | $ 1,400 | $ 1,000 | |
Increase due to new depreciation rates | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 309 | ||||
Nuclear Plant | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 2.72% | 2.38% | |||
Fossil Fuel Plant | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 3.98% | 1.95% | |||
Hydro Plant | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 1.95% | 1.60% | |||
Natural Gas Processing Plant | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 3.45% | 2.98% | |||
Electric Transmission | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 1.45% | 1.34% | |||
Other Plant in Service | |||||
Property, Plant and Equipment [Line Items] | |||||
Public utilities, property, plant and equipment, disclosure of composite depreciation rate for plants of service | 3.21% | 7.12% |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Accounts Receivable, Net | ||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,677 | $ 1,480 |
Other receivables | 73 | 86 |
Allowance for uncollectible accounts | 1 | 1 |
Accounts receivable, net | $ 1,750 | $ 1,566 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Inventories, Net | ||
Materials and supplies inventory | $ 804 | $ 775 |
Fuel inventory | 246 | 198 |
Renewable energy certificates/emission allowance inventory, net | 18 | 12 |
Allowance for inventory obsolescence | (55) | (35) |
Inventories, net | $ 1,013 | $ 950 |
Deferred Costs, Capitalized, _3
Deferred Costs, Capitalized, Prepaid, and Other Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other Assets, Miscellaneous, Current | $ 106 | $ 77 |
Other current assets | $ 269 | $ 287 |
Plant Closures (Details)
Plant Closures (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 24 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Disposals | $ 6,000,000 | $ 17,000,000 | |||
Accelerated depreciation | $ 35,000,000 | 105,000,000 | $ 102,000,000 | $ 447,000,000 | |
Depreciation expense | $ 459,000,000 | $ 347,000,000 | 1,400,000,000 | $ 1,000,000,000 | |
Additional depreciation for coal-fired fleet | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 253,000,000 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Other Long-Term Assets | ||
EnergyRight® receivables, net | $ 63 | $ 71 |
Prepaid Expense, Noncurrent | 60 | 44 |
Total other long-term assets | 401 | 320 |
Prepaid Expense, Current | 12 | 12 |
Loans and Leases Receivable, Allowance | 4 | 4 |
Financing Receivable, after Allowance for Credit Loss, Current | 3 | |
EnergyRight loan reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 1 | 1 |
Economic development loan specific loan reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 2 | 2 |
Economic Development Loan Collective Reserve | ||
Other Long-Term Assets | ||
Loans and Leases Receivable, Allowance | 1 | 1 |
Accounts Receivable [Member] | ||
Other Long-Term Assets | ||
EnergyRight® receivables, net | 13 | 15 |
Other long-term assets | ||
Other Long-Term Assets | ||
Loans and other long-term receivables, net | 125 | 96 |
EnergyRight® receivables, net | 50 | 57 |
Other | 78 | 83 |
Other long-term assets | ||
Other Long-Term Assets | ||
Commodity Contract Asset, Noncurrent | $ 88 | $ 40 |
Energy Right | ||
Other Long-Term Assets | ||
Number of days in default | 180 days | |
Energy Right | Minimum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 5 years | |
Energy Right | Maximum | ||
Other Long-Term Assets | ||
Debt Instrument, Term | 10 years |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Regulatory Assets and Liabilities | ||
Current regulatory assets | $ 389 | $ 196 |
Non-current regulatory assets | 7,789 | 7,956 |
Regulatory assets | 8,178 | 8,152 |
Current regulatory liabilities | 331 | 340 |
Regulatory Liability, Noncurrent | 88 | 40 |
Regulatory Liabilities | 419 | 380 |
Fuel cost adjustment tax equivalents | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 165 | 130 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory liabilities | 166 | 210 |
Regulatory Liability, Noncurrent | 88 | 40 |
Unrealized losses on interest rate derivatives [Member] | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 71 | 114 |
Non-current regulatory assets | 645 | 1,122 |
Unrealized gains/losses on commodity derivatives | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 14 | 3 |
Non-current regulatory assets | 5 | 0 |
Fuel cost adjustment receivable/liability | ||
Regulatory Assets and Liabilities | ||
Current regulatory assets | 304 | 79 |
Pension Costs [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 3,442 | 3,668 |
Nuclear desommissioning costs [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 686 | 363 |
Non-nuclear decommissioning [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | 2,872 | 2,653 |
Other non-current regulatory assets [Member] | ||
Regulatory Assets and Liabilities | ||
Non-current regulatory assets | $ 139 | $ 150 |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2013 | Sep. 30, 2012 | |
Variable Interest Entities | ||||||
Other long-term liabilities | $ 1,560 | $ 2,041 | ||||
Accrued interest | 22 | 10 | ||||
VIE Financing | ||||||
Face amount | $ 40 | $ 360 | ||||
Financial instruments subject to mandatory redemption, interest rate, stated percentage | 7% | |||||
Liabilities | ||||||
Current maturities of long-term debt of variable interest entities | $ 44 | 43 | ||||
Long-term debt of variable interest entities, net | 985 | 1,006 | ||||
Liabilities, Current | 5,384 | 4,979 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||
Variable Interest Entities | ||||||
Other long-term liabilities | 18 | 20 | ||||
Liabilities | 1,072 | 1,082 | $ 1,000 | |||
Liabilities | ||||||
Liabilities, Current | 69 | 56 | ||||
Interest Expense | $ 13 | 38 | $ 39 | |||
Accounts Payable and Accrued Liabilities | $ 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 | Jun. 30, 2022 | Sep. 30, 2021 | |
Other Long-Term Liabilities | |||
Pipeline financing obligation | $ 35 | $ 42 | |
Deferred Revenue, Noncurrent | 39 | 37 | |
Interest Rate Derivative Liabilities, at Fair Value | 1,074 | 1,639 | |
Operating Lease, Liability, Noncurrent | 111 | 122 | |
Currency swap liabilities | [1] | 133 | 83 |
EnergyRight® financing obligation | (82) | (92) | |
Other long-term liabilities | 1,560 | 2,041 | |
Regulatory Liability, Noncurrent | 88 | 40 | |
Deferred Compensation Liability, Current | 46 | 51 | |
Deferred Revenue, Current | 14 | 17 | |
Other Sundry Liabilities | 19 | ||
Deferred Revenue | 5 | ||
Operating lease liability [Member] | |||
Other Long-Term Liabilities | |||
Accounts Payable and Accrued Liabilities | 60 | 40 | |
Accounts payable and accrued liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | (38) | (28) | |
Interest Rate Derivative Liabilities, at Fair Value | 72 | 115 | |
EnergyRight® financing obligation | (15) | (16) | |
Customer Advances for Construction | 35 | 38 | |
Other long-term liabilities | |||
Other Long-Term Liabilities | |||
Obligations under long-term service agreements | (9) | (29) | |
Interest Rate Derivative Liabilities, at Fair Value | 1,002 | 1,524 | |
Currency swap liabilities | 123 | 76 | |
EnergyRight® financing obligation | (58) | (66) | |
Other | 133 | 121 | |
Customer Advances for Construction | 50 | 24 | |
Other Current Liabilities | |||
Other Long-Term Liabilities | |||
Currency swap liabilities | $ 10 | $ 7 | |
[1]TVA records currency swaps net of cash collateral received from or paid to the counterparty, to the extent such amount is not recorded in Accounts payable and accrued liabilities. See Note 14 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Asset Retirement Obligations | ||
Asset Retirement Obligation, Period Increase (Decrease) | $ 209 | |
Amortization and Depreciation of Decontaminating and Decommissioning Assets | 103 | |
Asset Retirement Obligation, Beginning Balance | 7,002 | |
Settlements | (197) | |
Asset Retirement Obligation, Revision of Estimate | 240 | |
Accretion (recorded as regulatory asset) | 166 | |
Asset Retirement Obligation, Ending Balance | 7,211 | |
Current portion of ARO | (313) | $ (266) |
Revision in estimate due to new depreciation rates | 47 | |
Revisions in estimate due to coal fines | 119 | |
Revision in ARO due to coal yards | 57 | |
Coal Combustion Residual Closure Liability Increase | 82 | |
Coal Combustion Residual Post-Closure Care Costs Increase/Decrease | 53 | |
Nuclear | ||
Asset Retirement Obligations | ||
Asset Retirement Obligation, Beginning Balance | 3,428 | |
Settlements | (2) | |
Asset Retirement Obligation, Revision of Estimate | 3 | |
Accretion (recorded as regulatory asset) | 116 | |
Asset Retirement Obligation, Ending Balance | 3,545 | |
Non-nuclear | ||
Asset Retirement Obligations | ||
Asset Retirement Obligation, Beginning Balance | 3,574 | |
Settlements | (195) | |
Asset Retirement Obligation, Revision of Estimate | 237 | |
Accretion (recorded as regulatory asset) | 50 | |
Asset Retirement Obligation, Ending Balance | $ 3,666 |
Debt and Other Obligations Debt
Debt and Other Obligations Debt Outstanding (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Short-term debt | ||
Short-term debt, net | $ 1,034 | $ 780 |
Current maturities of power bonds | 1,029 | 1,028 |
Current maturities of long-term debt of variable interest entities | 44 | 43 |
Total current debt outstanding, net | 2,107 | 1,851 |
Long-term debt | ||
Long-term power bonds | 17,491 | 17,572 |
Unamortized discounts, premiums, issues costs, and other | 108 | 115 |
Total long-term debt, net | 18,368 | 18,463 |
Total outstanding debt | 20,475 | 20,314 |
Long-term debt of variable interest entities, net | 985 | 1,006 |
Net exchange gain from currency transaction, noncurrent | $ 110 | $ 58 |
Debt and Other Obligations De_2
Debt and Other Obligations Debt Securities Activity (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |||
Debt Instrument | |||||
Total long-term debt, net | $ 18,368 | $ 18,463 | |||
Redemptions and repurchases of power bonds | $ 28 | [1] | $ 1,860 | ||
Variable Interest Entity, Financial or Other Support, Type | 21 | ||||
Total redemptions/maturities of debt | [1] | $ (49) | |||
2009 Series B June Payment | |||||
Debt Instrument | |||||
Redemptions and repurchases of power bonds | 27 | ||||
2009 Series B [Member] | |||||
Debt Instrument | |||||
Redemptions and repurchases of power bonds | $ 1 | ||||
[1](1) All redemptions were at 100 percent of par. |
Debt and Other Obligations Cred
Debt and Other Obligations Credit Facility Agreements (Details) | 9 Months Ended | |
Jun. 30, 2022 USD ($) Credit_facilities | Sep. 30, 2021 USD ($) | |
Line of Credit Facility [Line Items] | ||
Summary of Long-Term Credit Facilities | The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities: Summary of Long-Term Credit Facilities At June 30, 2022 (in millions) Maturity Date Facility Limit Letters of Credit Outstanding Cash Borrowings Availability February 2024 $ 150 $ 38 $ — $ 112 February 2025 500 500 — — September 2026 1,000 99 — 901 March 2027 1,000 106 — 894 Total $ 2,650 $ 743 $ — $ 1,907 | |
Borrowings under U.S. Treasury credit facility | $ 0 | |
February 2022 Credit Facility | 1,000,000,000 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | 150,000,000 | |
Revolving Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity for credit facilities | $ 2,650,000,000 | |
Number of revolving credit facilities | Credit_facilities | 4 | |
December 2019 Credit Facility | $ 150,000,000 | |
June 2020 Credit Facility | 500,000,000 | |
September 2020 Credit Facility | 1,000,000,000 | |
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 | 112,000,000 | |
Remaining Availability, February 2022 Credit Facility | 894,000,000 | |
Long-term Line of Credit, Borrowings 3 | 0 | |
Remaining Availability, June 2020 Credit Facility | 0 | |
Remaining Availability, September 2020 Credit Facility | 901,000,000 | |
Total Remaining Availability for Credit Facilities | 1,907,000,000 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of Credit Outstanding, Amount 1 | 500,000,000 | |
Letter of Credit Outstanding, December 2019 Credit Facility | 38,000,000 | |
Letter of Credit Outstanding, February 2022 Credit Facility | 106,000,000 | |
Letter of Credit Outstanding, September 2020 Credit Facility | 99,000,000 | |
Amount of letters of credit outstanding for credit facilities | $ 743,000,000 | $ 1,200,000,000 |
Debt and Other Obligations Leas
Debt and Other Obligations Lease/Leaseback Obligations (Details) $ in Millions | 3 Months Ended | |
Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Sale Leaseback Transaction [Line Items] | ||
CT and QTE outstanding leaseback obligation | $ 0 | $ 25 |
Leasing transaction, number of units | 16 | |
Leasing transaction, number of units | 16 | |
CT and QTE outstanding leaseback obligation | 0 | $ 25 |
Kemper/Lagoon Creek leasehold interests | ||
Sale Leaseback Transaction [Line Items] | ||
leasehold interest | 155 | |
leasehold interest | $ 155 | |
Kemper/Lagoon Creek leasehold interests | ||
Sale Leaseback Transaction [Line Items] | ||
Leasing transaction, number of units | 8 | |
Leasing transaction, number of units | 8 |
Risk Management Activities an_3
Risk Management Activities and Derivative Transactions Derivative Instruments That Receive Hedge Accounting Treatment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |||
Summary of Derivative Instruments That Receive Hedge Accounting Treatment | ||||||
Reclassification to earnings from cash flow hedges in the next 12 months | $ (25) | |||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | $ (34) | $ 64 | [1] | (50) | [1] | $ 114 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | $ (40) | $ 35 | $ (50) | $ 158 | ||
[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 $25 million of gains from AOCI to Interest expense within the next 12 months to offset amounts anticipated to be recorded in Interest expense related to exchange loss on the debt. |
Risk Management Activities an_4
Risk Management Activities and Derivative Transactions Derivative Instruments That Do Not Receive Hedge Accounting Treatment (Details) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2022 USD ($) Years | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Years | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | ||||
Derivative | ||||||||
Change in Unrealized gains (losses) on Interest Rate Derivatives | $ (262,000,000) | $ 183,000,000 | $ (533,000,000) | $ (346,000,000) | ||||
Derivative, Notional Amount | 1,500,000,000 | 1,500,000,000 | ||||||
Interest Rate Swap | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | (26,000,000) | (29,000,000) | [1] | (83,000,000) | [1] | (86,000,000) | [1] | |
Amount recognized for unrealized gains (losses) | 0 | |||||||
Fair value | (283,000,000) | (283,000,000) | $ (455,000,000) | |||||
Commodity Contract Derivatives | ||||||||
Derivative | ||||||||
Fair value | $ 183,000,000 | $ 183,000,000 | $ 247,000,000 | |||||
Natural Gas [Member] | ||||||||
Derivative | ||||||||
Number of contracts | 60 | 60 | 40 | |||||
Derivative, Nonmonetary Notional Amount | 364,000,000 | 364,000,000 | 263,000,000 | |||||
Fair value | $ 183,000,000 | $ 183,000,000 | $ 247,000,000 | |||||
Number Commodity Contract Term Years | Years | 3 | 3 | ||||||
Commodity Contract under FHP | ||||||||
Derivative | ||||||||
Gain (loss) recognized in income on derivatives | $ 14,000,000 | $ 0 | $ 14,000,000 | $ 0 | ||||
Number of contracts | 131 | 131 | 0 | |||||
Derivative, Nonmonetary Notional Amount | 163 | 163 | ||||||
Fair value | $ 52,000,000 | $ 52,000,000 | $ 0 | |||||
[1]All of TVA's derivative instruments that do not receive hedge accounting treatment have unrealized gains (losses) that would otherwise be recognized in income but instead are deferred as regulatory assets and liabilities. As such, there were no related gains (losses) recognized in income for these unrealized gains (losses) for the three and nine months ended June 30, 2022 and for the three and nine months ended June 30, 2021.(2) Amount recognized in 2022 is solely reported in Fuel expense. |
Risk Management Activities an_5
Risk Management Activities and Derivative Transactions Fair Values of TVA Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Derivatives, Fair Value | ||
Derivative, Notional Amount | $ 1,500 | |
Forward Contract Derivative Asset, at Fair Value | 2 | $ 2 |
Gross amounts of recognized liabilities | 1,226 | 1,725 |
$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 | ||
Gross amounts of recognized liabilities | 133 | 83 |
250 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (69) | (36) |
250 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (63) | (32) |
250 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (6) | (4) |
150 million Sterling currency swap | ||
Derivatives, Fair Value | ||
Fair value | (64) | (47) |
150 million Sterling currency swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (60) | (44) |
150 million Sterling currency swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (4) | (3) |
$1.0 billion notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (791) | (1,182) |
$1.0 billion notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (736) | (1,101) |
$1.0 billion notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (40) | (44) |
$1.0 billion notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (15) | (37) |
$476 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | (283) | (455) |
$476 million notional interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (266) | (423) |
$476 million notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (16) | (22) |
$476 million notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (1) | (10) |
$42 million notional interest rate swap | ||
Derivatives, Fair Value | ||
Fair value | 0 | (2) |
$42 million notional interest rate swap | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (1) | |
$42 million notional interest rate swap | Interest payable, current | ||
Derivatives, Fair Value | ||
Fair value | (1) | |
Commodity contract derivatives | ||
Derivatives, Fair Value | ||
Fair value | 183 | 247 |
Commodity contract derivatives | Other long-term assets | ||
Derivatives, Fair Value | ||
Fair value | 36 | 40 |
Commodity contract derivatives | Other current assets | ||
Derivatives, Fair Value | ||
Fair value | 163 | 210 |
Commodity contract derivatives | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (4) | |
Commodity contract derivatives | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (3) | (3) |
Commodity Contract under FHP | ||
Derivatives, Fair Value | ||
Fair value | 52 | 0 |
Commodity Contract under FHP | Other long-term assets | ||
Derivatives, Fair Value | ||
Fair value | 52 | |
Commodity Contract under FHP | Other current assets | ||
Derivatives, Fair Value | ||
Fair value | 9 | |
Commodity Contract under FHP | Other long-term liabilities | ||
Derivatives, Fair Value | ||
Fair value | (2) | |
Commodity Contract under FHP | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value | ||
Fair value | (10) | |
Commodity Contract under FHP | Accounts Receivable [Member] | ||
Derivatives, Fair Value | ||
Fair value | 3 | |
Commodity Contract not under FHP | Other current assets | ||
Derivatives, Fair Value | ||
Fair value | 154 | |
Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Risk Management Activities an_6
Risk Management Activities and Derivative Transactions Currency Swaps Outstanding (Details) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 USD ($) | Sep. 30, 2021 Bond_issues | |
Derivative | ||
Number of currency swaps outstanding | Bond_issues | 2 | |
Associated TVA bond issues currency exposure | $ | $ 400 | |
Minimum | ||
Derivative | ||
Expiration date range of swaps | 2032 | |
Maximum | ||
Derivative | ||
Expiration date range of swaps | 2043 |
Risk Management Activities an_7
Risk Management Activities and Derivative Transactions Derivatives Under FTP (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Natural Gas Contract Derivatives | ||
Derivative | ||
Fair value | 183 | 247 |
Commodity Contract under FHP | ||
Derivative | ||
Fair value | 52 | 0 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Risk Management Activities an_8
Risk Management Activities and Derivative Transactions Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | $ 1,226 | $ 1,725 |
Total derivatives not subject to master netting or similar arrangement | 190 | 250 |
Forward Contract Derivative Asset, at Fair Value | 2 | 2 |
Derivative Liability, Not Subject to Master Netting Arrangement | 7 | 3 |
Derivative Asset, Fair Value, Gross Liability | 254 | 250 |
Offsetting Derivative Assets [Abstract] | ||
Derivative, Fair Value, Amount Offset Against Collateral, Net | 22 | |
Letter of Credit | ||
Offsetting Assets [Line Items] | ||
Amount of letters of credit outstanding for credit facilities | 743 | 1,200 |
Currency Swap | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 133 | 83 |
Interest Rate Contract | ||
Offsetting Assets [Line Items] | ||
Gross amounts of recognized liabilities | 1,074 | 1,639 |
Commodity Contract under FHP | ||
Offsetting Assets [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 34 | |
Total derivatives not subject to master netting or similar arrangement | 64 | 0 |
Derivative Liability, Not Subject to Master Netting Arrangement | 12 | 0 |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | 86 | |
Offsetting Derivative Assets [Abstract] | ||
Derivative Liability, Fair Value of Collateral | 10 | |
Fair Value, Inputs, Level 2 | ||
Offsetting Assets [Line Items] | ||
Forward Contract Derivative Asset, at Fair Value | 2 | $ 2 |
Fair Value, Inputs, Level 2 | Commodity Contract under FHP | ||
Offsetting Assets [Line Items] | ||
Total derivatives not subject to master netting or similar arrangement | 64 | |
Derivative Liability, Not Subject to Master Netting Arrangement | $ 12 |
Risk Management Activities an_9
Risk Management Activities and Derivative Transactions Offsetting for Derivative Liabilities (Details) $ in Millions | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) Bond_issues |
Offsetting Liabilities [Line Items] | ||
Number of currency swaps outstanding | Bond_issues | 2 | |
Accounts Receivable, before Allowance for Credit Loss, Current | $ 1,677 | $ 1,480 |
Total derivatives not subject to master netting or similar arrangement | 190 | 250 |
Gross amounts of recognized liabilities | 1,226 | 1,725 |
Derivative Liability, Not Subject to Master Netting Arrangement | 7 | 3 |
Forward Contract Derivative Asset, at Fair Value | 2 | 2 |
Currency Swap | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts of recognized liabilities | 133 | 83 |
Interest Rate Contract | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts of recognized liabilities | 1,074 | 1,639 |
Letter of Credit | ||
Offsetting Liabilities [Line Items] | ||
Amount of letters of credit outstanding | 743 | 1,200 |
Fair Value, Inputs, Level 2 | ||
Offsetting Liabilities [Line Items] | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Risk Management Activities a_10
Risk Management Activities and Derivative Transactions Collateral (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Likely cash collateral obligation increase | 22 | |
Collateralized Securities [Member] | ||
Derivative | ||
Derivative, Net Liability Position, Aggregate Fair Value | 1,200 | |
Derivative, Collateral, Right to Reclaim Cash | 721 | |
Letter of Credit | ||
Derivative | ||
Amount of letters of credit outstanding | 743 | 1,200 |
Fair Value, Inputs, Level 2 | ||
Derivative | ||
Forward Contract Derivative Asset, at Fair Value | $ 2 | $ 2 |
Risk Management Activities a_11
Risk Management Activities and Derivative Transactions Counterparty Credit Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) Customers | Sep. 30, 2021 USD ($) | |
Derivative | |||
Accounts Receivable, before Allowance for Credit Loss, Current | $ | $ 1,677 | $ 1,677 | $ 1,480 |
Total derivatives not subject to master netting or similar arrangement | $ | $ 190 | $ 190 | $ 250 |
Two Largest Customer Percentage of Total Operating Revenue | 1,600% | ||
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 | ||
Credit of Customers | |||
Derivative | |||
Number of customers that represent the percent of sales | Customers | 2 | ||
Number of customers that represent the percent of sales | Customers | 2 |
Risk Management Activities a_12
Risk Management Activities and Derivative Transactions Cash Flow from Hedging (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Cash Flow from Hedging [Abstract] | |
Associated bond issues currency exposure | $ 400 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements - Investments (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | |
Investment Gains (Losses) | |||||
Financing Receivable, after Allowance for Credit Loss | $ 120 | $ 120 | $ 94 | ||
Balance in NDT | $ 2,600 | $ 2,600 | |||
Period of time where the investor contributes capital to an investment in a private partnership - minimum | Units | 3 | 3 | |||
Period of time where the investor contributes capital to an investment in a private partnership - maximum | Units | 4 | 4 | |||
Minimum investment period | Units | 10 | 10 | |||
Number of readily available quoted exchange prices for the investments | 0 | 0 | |||
Investment funds | $ 3,751 | $ 3,751 | 4,053 | ||
Affiliated Entity | |||||
Investment Gains (Losses) | |||||
Investment funds | 438 | 438 | $ 573 | ||
LTDCP [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 2 | $ (1) | 4 | $ (1) | |
SERP | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 9 | (3) | 14 | (8) | |
ART [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 139 | (48) | 147 | (168) | |
NDT [Member] | |||||
Investment Gains (Losses) | |||||
Unrealized gains (losses) on investments | 331 | $ (107) | (305) | $ (361) | |
Equity Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 191 | 191 | |||
Real Estate Funds | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 128 | 128 | |||
Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 50 | 50 | |||
Private Equity Funds [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | 110 | 110 | |||
Private real estate funds [Member] | |||||
Investment Gains (Losses) | |||||
Fair value plan assets gross | 78 | 78 | |||
Private Credit [Member] | |||||
Investment Gains (Losses) | |||||
NDT unfunded commitments related to private equity and real estate | $ 27 | $ 27 |
Fair Value Measurements Fair _2
Fair Value Measurements Fair Value Measurements - Nonperformance Risk (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Nonperformance Risk | |
Derivative Credit Risk Valuation Adjustment, Derivative Assets | $ 0 |
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities | $ 1 |
Fair Value Measurements Fair _3
Fair Value Measurements Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Financing Receivable, after Allowance for Credit Loss | $ 120 | $ 94 | ||
Investments | ||||
Government debt securities | 458 | 597 | ||
Corporate debt securities | 310 | 411 | ||
Mortgage and asset-backed securities | 75 | 63 | ||
Institutional mutual funds | 187 | 225 | ||
Forward debt securities contracts | 2 | 2 | ||
Private credit measured at net asset value | 99 | 71 | ||
Private equity funds measured at net asset value(1) | 449 | 357 | [1] | |
Private real estate funds measured at net asset value(1) | 345 | 272 | [1] | |
Commingled funds measured at net asset value(1) | 1,254 | 1,421 | [1] | |
Total investments | 3,751 | 4,053 | ||
Commodity contract derivatives | 190 | 250 | ||
Total derivatives not subject to master netting or similar arrangement | 190 | 250 | ||
Total | 4,005 | 4,303 | ||
Liabilities | ||||
Currency swaps | [2] | 133 | 83 | |
Interest rate swaps | 1,074 | 1,639 | ||
Commodity contract derivatives | 7 | 3 | ||
Derivative Liability, Not Subject to Master Netting Arrangement | 7 | 3 | ||
Total | 1,226 | 1,725 | ||
Decommissioning Fund Investments | 1,100 | |||
Balance in NDT | 2,600 | |||
Equity Securities, FV-NI | 572 | 634 | ||
Commodity Contract under FHP | ||||
Investments | ||||
Total derivatives not subject to master netting or similar arrangement | 64 | 0 | ||
Liabilities | ||||
Derivative Liability, Not Subject to Master Netting Arrangement | 12 | 0 | ||
Fair Value, Inputs, Level 1 | ||||
Investments | ||||
Government debt securities | 438 | 573 | ||
Corporate debt securities | 0 | 0 | ||
Mortgage and asset-backed securities | 0 | 0 | ||
Institutional mutual funds | 187 | 225 | ||
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 | 1,197 | 1,432 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 1,197 | 1,432 | ||
Liabilities | ||||
Currency swaps | 0 | 0 | [2] | |
Interest rate swaps | 0 | 0 | ||
Commodity contract derivatives | 0 | 0 | ||
Total | 0 | 0 | ||
Equity Securities, FV-NI | 572 | 634 | ||
Fair Value, Inputs, Level 1 | Commodity Contract under FHP | ||||
Investments | ||||
Total derivatives not subject to master netting or similar arrangement | 0 | |||
Liabilities | ||||
Derivative Liability, Not Subject to Master Netting Arrangement | 0 | |||
Fair Value, Inputs, Level 2 | ||||
Investments | ||||
Government debt securities | 20 | 24 | ||
Corporate debt securities | 310 | 411 | ||
Mortgage and asset-backed securities | 75 | 63 | ||
Institutional mutual funds | 0 | 0 | ||
Forward debt securities contracts | 2 | 2 | ||
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 | 407 | 500 | ||
Commodity contract derivatives | 190 | 250 | ||
Total | 661 | 750 | ||
Liabilities | ||||
Currency swaps | 133 | 83 | [2] | |
Interest rate swaps | 1,074 | 1,639 | ||
Commodity contract derivatives | 7 | 3 | ||
Total | 1,226 | 1,725 | ||
Equity Securities, FV-NI | 0 | 0 | ||
Fair Value, Inputs, Level 2 | Commodity Contract under FHP | ||||
Investments | ||||
Total derivatives not subject to master netting or similar arrangement | 64 | |||
Liabilities | ||||
Derivative Liability, Not Subject to Master Netting Arrangement | 12 | |||
Fair Value, Inputs, Level 3 | ||||
Investments | ||||
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 | ||
Equity Securities, FV-NI | 0 | $ 0 | ||
Fair Value, Inputs, Level 3 | Commodity Contract under FHP | ||||
Investments | ||||
Total derivatives not subject to master netting or similar arrangement | 0 | |||
Liabilities | ||||
Derivative Liability, Not Subject to Master Netting Arrangement | $ 0 | |||
[1]Certain investments that are measured at fair value using the NAV 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 14 — Risk Management Activities and Derivative Transactions — Offsetting of Derivative Assets and Liabilities . 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 | Jun. 30, 2022 | Sep. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodity contract derivatives | $ 190 | $ 250 |
Commodity contract derivatives | 7 | 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 |
Fair Value Measurements Estimat
Fair Value Measurements Estimated Values of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables, net (including current portion) | $ 63 | $ 71 |
Loans and other long-term receivables, net (including current portion) | 120 | 94 |
EnergyRight® financing obligations (including current portion) | 82 | 92 |
Unfunded loan commitments | 0 | 3 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 25 | 30 |
Long-term outstanding power bonds, net (including current maturities) | 19,916 | 24,309 |
Long-term debt of VIEs, net (including current maturities) | 1,074 | 1,307 |
Portion at Other than Fair Value Measurement [Member] | ||
Estimated Values of Financial Intruments Not Recorded at Fair Value | ||
EnergyRight® receivables, net (including current portion) | 63 | 72 |
Loans and other long-term receivables, net (including current portion) | 128 | 99 |
EnergyRight® financing obligations (including current portion) | 73 | 82 |
Unfunded loan commitments | 0 | 0 |
Membership interests of VIEs subject to mandatory redemption (including current portion) | 21 | 23 |
Long-term outstanding power bonds, net (including current maturities) | 18,485 | |
Long-term debt of VIEs, net (including current maturities) | 18,412 | $ 1,049 |
Long-term notes payable (including current maturities) | $ 1,029 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other Income (Expense), Net | ||||
External services | $ 3 | $ 3 | $ 11 | $ 10 |
Interest income | 2 | 3 | 9 | 9 |
Gains (losses) on investments | (11) | 5 | (13) | 16 |
Miscellaneous | 0 | 0 | 4 | 2 |
Other income (expense), net | $ (6) | $ 11 | $ 11 | $ 37 |
Benefit Plans Components of Ben
Benefit Plans Components of Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pension Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 13 | $ 14 | $ 39 | $ 42 |
Interest cost | 94 | 92 | 283 | 276 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (108) | 123 | (326) | 369 |
Amortization of prior service cost | (23) | (24) | (70) | (73) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 97 | (113) | 294 | (340) |
Net periodic benefit cost as acutarially determined | 73 | 72 | 220 | 216 |
Amount capitalized due to actions of regulator | (3) | (5) | (10) | 14 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 76 | 77 | 230 | 230 |
Other Postretirement Benefit Plan | ||||
Retirement Plan Disclosure | ||||
Service cost | 5 | 5 | 13 | 14 |
Interest cost | 4 | 4 | 11 | 12 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | (5) | (5) | (13) | (14) |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | 2 | (3) | 5 | (8) |
Net periodic benefit cost as acutarially determined | 6 | 7 | 16 | 20 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 6 | $ 7 | 16 | $ 20 |
Defined benefit plan contributions | 21 | |||
Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 225 | |||
401K [Member] | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 75 |
Benefit Plans Components of Net
Benefit Plans Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other Pension Plan | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | $ 225 | |||
Pension Benefits | ||||
Retirement Plan Disclosure | ||||
Service cost | $ 13 | $ 14 | 39 | $ 42 |
Interest cost | 94 | 92 | 283 | 276 |
Expected return on plan assets | 108 | (123) | 326 | (369) |
Amortization of prior service cost | (23) | (24) | (70) | (73) |
Recognized net actuarial loss | (97) | 113 | (294) | 340 |
Total net periodic benefit cost as actuarially determined | 73 | 72 | 220 | 216 |
Amount capitalized due to actions of regulator | 3 | 5 | 10 | (14) |
Total net periodic benefit cost | 76 | 77 | 230 | 230 |
Other Post-retirement Benefits | ||||
Retirement Plan Disclosure | ||||
Defined benefit plan contributions | 21 | |||
Service cost | 5 | 5 | 13 | 14 |
Interest cost | 4 | 4 | 11 | 12 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | (5) | (5) | (13) | (14) |
Recognized net actuarial loss | (2) | 3 | (5) | 8 |
Total net periodic benefit cost as actuarially determined | 6 | 7 | 16 | 20 |
Amount capitalized due to actions of regulator | 0 | 0 | 0 | |
Total net periodic benefit cost | $ 6 | $ 7 | $ 16 | $ 20 |
Benefit Plans Contributions (De
Benefit Plans Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Retirement Plan Disclosure | ||
Remaining Employer Contributions | $ 75 | |
Other Pension Plan | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 225 | |
defined benefit plan, plan assets, monthly contributions by employer | 25 | |
Other Post-retirement Benefits | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 21 | |
SERP | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 8 | |
Rebates [Member] | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | 3 | |
401K [Member] | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | $ 75 | |
Minimum | Other Pension Plan | ||
Retirement Plan Disclosure | ||
Defined benefit plan contributions | $ 300 |
Contingencies and Legal Proce_2
Contingencies and Legal Proceedings Contingencies (Details) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 USD ($) Insurance_layers Procedures reactors | Sep. 30, 2021 USD ($) | |
Loss Contingencies | ||
Nuclear liability insurance | $ 450 | |
Assessment from licensees for each licensed reactor | $ 138 | |
Number of licensed reactors in US | reactors | 95 | |
Nuclear accident assessment limitation per year per unit | $ 20 | |
Maximum assessment per nuclear incident | 963 | |
Total amount of protection available | 13,500 | |
Amount of insurance available for loss at any one site | 2,100 | |
Maximum amount of retrospective premiums | 115 | |
Maximum idemnity if a covered accident takes or keeps a nuclear unit offline | 490 | |
Maximum retrospective premiums | 44 | |
Estimated future decommissioning cost | $ 7,211 | $ 7,002 |
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 | $ 124 | |
Possible additional future costs for compliance with CCR requirements | 1,000 | |
Possible additional future costs for compliance with Clean Water requirements. | 128 | |
Estimated liability for cleanup and environmental work | 18 | 18 |
Amount of insurance available for loss at any one site (top range) | 2,800 | |
Long-term debt of VIEs, net (including current maturities) | $ 1,074 | 1,307 |
The U.S. Congress is required to take action if these layes are exhausted | Insurance_layers | 2 | |
Nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | $ 3,545 | 3,428 |
Non-nuclear | ||
Loss Contingencies | ||
Estimated future decommissioning cost | 3,666 | $ 3,574 |
Environmental Agreements | ||
Loss Contingencies | ||
Amount invested in certain environmental projects | 282 | |
General | ||
Loss Contingencies | ||
Legal loss contingency accrual | $ 11 |
Contingencies and Legal Proce_3
Contingencies and Legal Proceedings Legal Proceedings (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) Agreements Units Groups | |
Legal Proceedings | |
Number of licensed nuclear units | Units | 7 |
Amount remaining to be spent under environmental agreements [Abstract] | $ 9,000,000 |
Compensatory damages - Kingston Case | 8,000,000 |
Punitive Damages - Kingston Case | 10,000,000 |
Down payment from Nuclear Development | 22,000,000 |
Compensated costs to Nuclear Development | 1,000,000 |
Other Income | $ 28,000,000 |
Prejudgement Interest Rate | 7.50% |
Amended Final Judgement Interest Rate | 6% |
General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 11,000,000 |
Environmental Agreements | |
Legal Proceedings | |
Number of similar environmental agreements entered into | Agreements | 2 |
Number of environmental agreements entered into with the EPA | Agreements | 1 |
Number of environmental agreements entered into with environmental advocacy groups | Groups | 3 |
Amount to be invested in certain TVA environmental projects | $ 290,000,000 |
Accounts payable and accrued liabilities | General | |
Legal Proceedings | |
Legal loss contingency accrual | $ 30,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2023 | Aug. 01, 2022 | Sep. 30, 2021 | ||
Subsequent Event [Line Items] | ||||||||
Redemptions and repurchases of power bonds | $ 28 | [1] | $ 1,860 | |||||
Increase/Decrease in Interest Rate Swap Liability | $ 115 | 115 | ||||||
Current regulatory assets | 389 | 389 | $ 196 | |||||
Operating and maintenance | 722 | $ 747 | 2,269 | 2,106 | ||||
Interest expense | 264 | $ 267 | 791 | $ 824 | ||||
Non-current regulatory assets | 7,789 | 7,789 | 7,956 | |||||
Regulatory Liability, Noncurrent | 88 | 88 | 40 | |||||
Commodity Contract under FHP | ||||||||
Subsequent Event [Line Items] | ||||||||
Derivative Liability, Fair Value of Collateral | 10 | 10 | ||||||
Unrealized gains/losses on commodity derivatives | ||||||||
Subsequent Event [Line Items] | ||||||||
Regulatory Liability, Noncurrent | 88 | 88 | 40 | |||||
Unrealized gains/losses on commodity derivatives | ||||||||
Subsequent Event [Line Items] | ||||||||
Current regulatory assets | 14 | 14 | 3 | |||||
Non-current regulatory assets | $ 5 | $ 5 | $ 0 | |||||
Forecast | ||||||||
Subsequent Event [Line Items] | ||||||||
Fuel and purchased power | $ 4,600 | |||||||
Base Capital spend | 1,000 | |||||||
Operating and maintenance | 3,300 | |||||||
Interest expense | 1,100 | |||||||
Debt limit | $ 2,000 | |||||||
Forecast | Unrealized gains/losses on commodity derivatives | ||||||||
Subsequent Event [Line Items] | ||||||||
Regulatory Liability, Noncurrent | $ 100 | |||||||
Forecast | DeferredDerivativeGainLossUnderFHP | ||||||||
Subsequent Event [Line Items] | ||||||||
Regulatory Liability, Noncurrent | 150 | |||||||
Forecast | Unrealized gains/losses on commodity derivatives | ||||||||
Subsequent Event [Line Items] | ||||||||
Non-current regulatory assets | 1 | |||||||
Forecast | DeferredDerivativeGainLossUnderFHP | ||||||||
Subsequent Event [Line Items] | ||||||||
Non-current regulatory assets | $ 10 | |||||||
[1](1) All redemptions were at 100 percent of par. |
Gallatin Coal Combustion Residu
Gallatin Coal Combustion Residual Facilities (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Other Long-Term Liabilities | ||
Current regulatory assets | $ 389 | $ 196 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2023 | |
State [Line Items] | |||||||
Electric revenue | $ (2,925) | $ (2,490) | $ (8,306) | $ (7,289) | |||
Sales of Electricity | 2,932 | 2,491 | 8,318 | 7,294 | |||
Off System Sales of Electricity | 7 | 12 | 5 | ||||
Other revenue | $ 38 | 36 | $ 119 | 109 | |||
Total long duration contract revenue recognition | 2,662 | 7,576 | |||||
Revenues | $ 2,970 | 2,527 | $ 8,437 | 7,403 | |||
Off system sales | 1 | ||||||
Percent of wholesale Credit offered | 310% | ||||||
Percent of Pandemic Credit Offered | 2.50% | 2.50% | |||||
Pandemic Relief Credit | (56) | (52) | $ (161) | (156) | |||
Percent of Generation Flexibility Credit | 5% | ||||||
NES's % of operating revenues | 800% | ||||||
Percent of Generation Flexibility Credit | 5% | ||||||
Forecast | |||||||
State [Line Items] | |||||||
Revenues | $ 12,400 | ||||||
Percent of Pandemic Credit Offered | 1.50% | ||||||
Pandemic Relief Credit | $ 220 | $ 230 | |||||
ALABAMA | |||||||
State [Line Items] | |||||||
Electric revenue | (419) | (359) | $ (1,203) | (1,072) | |||
GEORGIA | |||||||
State [Line Items] | |||||||
Electric revenue | (69) | (60) | (207) | (184) | |||
KENTUCKY | |||||||
State [Line Items] | |||||||
Electric revenue | (195) | (163) | (556) | (457) | |||
MISSISSIPPI | |||||||
State [Line Items] | |||||||
Electric revenue | (283) | (237) | (788) | (686) | |||
NORTH CAROLINA | |||||||
State [Line Items] | |||||||
Electric revenue | (20) | (15) | (63) | (49) | |||
TENNESSEE | |||||||
State [Line Items] | |||||||
Electric revenue | (1,929) | (1,646) | (5,455) | (4,810) | |||
VIRGINIA | |||||||
State [Line Items] | |||||||
Electric revenue | (10) | $ (10) | (34) | $ (31) | |||
20-year Termination Notice [Member] | |||||||
State [Line Items] | |||||||
Revenues | 2,250 | 6,473 | |||||
5-year termination notice [Member] | |||||||
State [Line Items] | |||||||
Revenues | $ 412 | $ 1,103 |
Revenue Customer Type (Details)
Revenue Customer Type (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | Sep. 30, 2023 USD ($) | |
Revenue, Major Customer [Line Items] | ||||||
MLGW's % of operating revenues | 800% | |||||
NES's % of operating revenues | 800% | |||||
Sales of Electricity | $ 2,932 | $ 2,491 | $ 8,318 | $ 7,294 | ||
Electric revenue | 2,925 | 2,490 | 8,306 | 7,289 | ||
Off System Sales of Electricity | 7 | 12 | 5 | |||
Other revenue | 38 | 36 | 119 | 109 | ||
Revenues | 2,970 | 2,527 | 8,437 | 7,403 | ||
Bill credits for LTA | $ (48) | (43) | $ (141) | (133) | ||
Number of LPCs signed LTA | Units | 146 | 146 | ||||
Number of LPCs signed Flexibility Agreement | Units | 79 | 79 | ||||
Percent of sales of electricity to LPCs | 91% | |||||
Pandemic Relief Credit | $ (56) | (52) | $ (161) | (156) | ||
Forecast | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 12,400 | |||||
Pandemic Relief Credit | $ 220 | $ 230 | ||||
lpcs [Domain] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 2,662 | 2,283 | 7,576 | 6,711 | ||
industries directly served [Domain] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 229 | 179 | 640 | 501 | ||
federal agencies and other [Domain] | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 41 | 29 | 102 | 82 | ||
ALABAMA | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 419 | 359 | 1,203 | 1,072 | ||
GEORGIA | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 69 | 60 | 207 | 184 | ||
KENTUCKY | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 195 | 163 | 556 | 457 | ||
MISSISSIPPI | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 283 | 237 | 788 | 686 | ||
NORTH CAROLINA | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 20 | 15 | 63 | 49 | ||
TENNESSEE | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | 1,929 | 1,646 | 5,455 | 4,810 | ||
VIRGINIA | ||||||
Revenue, Major Customer [Line Items] | ||||||
Electric revenue | $ 10 | $ 10 | $ 34 | $ 31 |
Revenue Unpaid Incentives (Deta
Revenue Unpaid Incentives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Paid Economic Incentives | $ 81 | $ 82 | $ 249 | $ 239 | |
Unpaid Economic Incentives | $ 185 | $ 185 | $ (176) |
Revenue Local Power Company C_2
Revenue Local Power Company Contracts (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Units | Jun. 30, 2021 USD ($) | |
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 2,970 | $ 2,527 | $ 8,437 | $ 7,403 |
Total long-duration contracts revenue recognition | 2,662 | 7,576 | ||
Total percentage of operating revenues | 89.70% | 89.80% | ||
Number of LPCs signed LTA | Units | 146 | 146 | ||
Total Number of LPCs | Units | 153 | 153 | ||
5-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 412 | $ 1,103 | ||
Percentage of total operating revenues | 13.90% | 13.10% | ||
Number of LPCs signed LTA | Units | 7 | 7 | ||
20-year Termination Notice [Member] | ||||
Long-term Contract for Purchase of Electric Power [Line Items] | ||||
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | $ 2,250 | $ 6,473 | ||
Percentage of total operating revenues | 75.80% | 76.70% |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Sep. 30, 2021 |
Amounts Recognized on TVA's Consolidated Balance Sheet [Line Items] | ||
Finance lease, asset | $ 645 | $ 692 |
Finance Lease, Liability, Current | 0 | 25 |
Operating Lease, Liability, Noncurrent | 111 | 122 |
Finance Lease, Liability, Noncurrent | $ 648 | $ 687 |