The Tennessee Valley Authority (TVA) on Nov. 15 reported its highest-ever net income of $1.2bn for the fiscal year ended Sept. 30, 2016, up $122m from 2015.
TVA also noted that it completed construction of the 1,150-MW Watts Bar 2 nuclear plant during FY 2016 and brought it into commercial operation in October.
While not mentioned in the Nov. 15 news release, TVA also said recently that it has agreed to sell Alabama property to a firm with plans to complete the unfinished Bellefonte nuclear plant.
TVA said the healthy net income was produced despite lower net power sales from extreme weather. The federal utility cited reduced operating expenses as the reason for the success.
“It is TVA’s mission of service that motivated us to improve our financial and operating performance as we focus on providing low cost, clean and reliable energy, environmental stewardship and economic development,” said TVA President and CEO Bill Johnson. “Through the dedication and strong performance of TVA’s employees, we were able to deliver on our mission of serving the people of the Tennessee Valley.”
“In 2016, our fuel and purchased power costs were nearly a billion dollars less than in 2012,” Johnson said. “This was due primarily to the flexibility of our more diverse generating portfolio, lower gas prices and improved operating performance,” he said. “With the reduction of almost $800m in O&M costs, TVA employees have reduced annual expenses by almost $1.8 billion dollars in the past three years.”
In TVA’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), TVA reported that sales of electricity decreased by 1.5% for the fiscal year, as compared to the prior year. The Tennessee Valley region experienced the second mildest winter of the last 55 years, only partially offset by the warmest summer of that same period.
Revenues from the sale of electricity decreased by $386m in fiscal year 2016, as compared to the prior year, primarily due to lower fuel cost recovery revenues, as well as lower sales volume driven by weather.
TVA executive management will host a conference call to discuss fiscal year 2016 results at 10 a.m. EST, on Tuesday, Nov. 15, 2016. The conference call can be accessed from TVA’s website via webcast, at http://www.tva.com, on the Investor Relations home page.