Roughly 800 Tennessee Valley Authority (TVA) employees have taken early retirement packages, TVA President and CEO Bill Johnson said Nov. 17.
Johnson made the comment during a question-and-answer session toward the end of a TVA conference call on its FY 2014 financial performance. As a federal entity, TVA’s fiscal year ends Sept. 30.
There were “good strides in our multi-year effort to live within our means,” Johnson said during the call. When asked, Johnson said TVA has trimmed about 2,000 people or positions during the past couple of years.
About half of the 2,000 came from natural attrition or job openings that existed on paper but were not filled. About 800 of the remaining 1,000 staff reductions came from employees taking voluntary severance packages, Johnson said.
There was some “pent-up retirement demand” at TVA, Johnson said. The TVA chief had discussed the staff reduction in force this spring as well.
In a news release and related documents, TVA reported $11bn in operating revenues in FY 2014, resulting in $469m in net income. TVA overcame a 2.4% decline in total sales to record its highest net income year since 2010.
“We had a strong financial year in 2014 highlighted by further improvements in TVA’s operating and maintenance costs, an area we have been acutely focused on over the last two years,” Johnson said.
“We have taken considerable strides in our efforts to reduce our controllable costs, our O&M costs, to align with our revenue and growth expectations for the future,” Johnson added.
Johnson also revisited some of the same topics taken up in a recent TVA board meeting. The TVA leader said that the Watts Bar 2 nuclear facility is meeting construction landmarks safely and should be “like new” when it opens by the end of 2015.
During FY 2014, the TVA Raccoon Mountain pumped storage hydro plant was returned to service. “This is an important asset especially in peak periods” of demand, Johnson said.
The four units at Raccoon Mountain have a total net summer capability of 1,616 MW. They are utilized to balance the transmission system as well as generate power. As of Sept. 30, 2014, three of the four Raccoon Mountain units were in service. The return to service date for the fourth unit is estimated to be in the third quarter of 2015, according to TVA’s latest 10-Q report.
TVA is investing $1bn in clean air projects at Gallatin. The utility is building also building a couple of new combined-cycle natural gas plants, Johnson noted.
CFO cites progress on financial issues
“The work we have done the last two years allowed us to continue to make substantial investments that support a reliable, well-balanced asset portfolio while reducing our total debt and obligations,” said TVA CFO John Thomas.
Sales to local power companies were moderately higher in 2014 as compared with 2013, as weather helped increase retail demand, particularly in the polar vortex last winter.
This increase was also due to some underlying economic activity and a modest general rate increase, TVA officials said. Growth in sales to local power companies partially offset lower sales to directly served industrial customers, as TVA saw the final year-over-year impact from the loss of U.S. Enrichment Corp.’s operations in Paducah, Ky., formerly TVA’s largest directly served customer.