TVA reports higher revenue, power sales

By: SUBMITTED
By: SUBMITTED

KNOXVILLE, Tenn. (SUBMITTED) -- TVA reported higher operating revenues and power sales for the three and six months which ended March 31, 2008. In its second quarter report, filed yesterday with the Securities and Exchange Commission, TVA reported total revenues of nearly $2.5 billion for the quarter, up 7.6 percent from the same period in the prior year, due to recovery of increased fuel and purchased power costs and increased power sales. Power sales in the second quarter were 45.4 billion
kilowatt-hours or 3.7 percent higher than the same period in the prior year, mainly due to higher sales to industrial and federal customers.

Total operating expenses for the second quarter totaled $2.1 billion, an increase of 8.4 percent from the same period in the prior year, mainly due to higher fuel and purchased power expenses. Hydroelectric power -- TVA’s least expensive form of generation -- was 44 percent of normal in the second quarter, causing TVA to purchase replacement power or use more expensive forms of generation.

TVA reported net income of $73 million for the three months that ended March 31, 2008, compared to $126 million for the same period in the prior year.

Net income for the first two quarters of the fiscal year was $56 million compared to a net income of $177 million for the same period a year ago. The lower net income in both periods is primarily due to accounting changes implemented in fiscal year 2008.

“TVA still faces challenges related to fuel, purchased power and reduced hydroelectric generation for the remainder of the year,” said TVA President and CEO, Tom Kilgore. “Drought conditions continue to impact our financial results. Although rainfall totals for the first six months of the fiscal year were about 80 percent of normal, the amount of water reaching the rivers and reservoirs was less than 50 percent of the normal amount. Reduced hydro generation continues to drive up the total cost of power.”

Browns Ferry Unit 1, which entered commercial operation in 2007, added an additional source of less expensive generation to TVA’s power supply mix for the six months ended March 31, 2008. TVA also announced the purchase of a combined-cycle, combustion turbine facility in Southaven, Mississippi, which closed on May 9, 2008 and is expected to help meet growing demand.

Another highlight for the second quarter was the return of Bristol Virginia Utilities as a TVA customer in January. On April 3, 2008, shortly after the quarter ended, the TVA Board approved an investment of approximately $597 million to install emissions control equipment at the John Sevier Fossil Plant near Rogersville, Tennessee.

TVA’s quarterly report on Form 10-Q includes additional financial, operational and descriptive information, such as unaudited financial statements for the quarter ended March 31, 2008, and is available to investors and the public. The public may read reports or other information that TVA files with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, DC 20549. TVA SEC reports are also available on the SEC website at www.sec.gov and copies are available on TVA’s website at www.tva.com/finance or by calling TVA toll free at 888-882-4975.

TVA is the nation’s largest public power provider and is completely self-financing. TVA provides power to large industries and 159 power distributors that serve approximately 8.8 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

(This release and TVA’s quarterly reports on Form 10-Q may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying the forward-looking statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Some of these factors are discussed on pages 3 and 4 of TVA’s quarterly report files with the SEC.)

TVA is the nation’s largest public power provider and is completely self-financing. TVA provides power to large industries and 159 power distributors that serve approximately 8.8 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

(Information submitted by the Tennessee Valley Authority)


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