During the 2016 fiscal year that ended on Sept. 30, the Tennessee Valley Authority (TVA) invested almost $3bn in its power system, with much of it going toward its coal, natural gas and nuclear power fleet.
TVA President and CEO Bill Johnson reported to the TVA board of directors Nov. 10 in Blairsville, Georgia.
Operational challenges will continue into 2017, TVA said in a news release. Power demands continue to be flat and TVA is currently projecting load growth of three-tenths of 1% over the long term with the possibility of going even lower.
For example, TVA’s investments included spending on clean air equipment at the Gallatin coal plant in Tennessee; Shawnee in Kentucky; new gas plants at Paradise in Kentucky and Allen in Memphis.
TVA also spent on completion of construction on the Watts Bar 2 nuclear plant and power uprates at the Browns Ferry nuclear plant, the federal utility said in a news release. Investments were also made in the transmission system, TVA said.
Fuel and purchased power expense was down more than $300m in 2016 versus 2015, and below budget, TVA said. Debt and other financing obligations at the end of 2016 were $776m below budget.
TVA completed construction of the Watts Bar 2 nuclear unit and declared the facility in commercial operation on Oct. 19.
The utility said that it reduced carbon dioxide (CO2) emissions 30% from 2005 levels and on a path to decrease by more than 60% by 2020.
TVA achieved its highest net income ever of $1.2bn in 2016, $641m more than budget and $122m more than last year. Operating and maintenance expenses have been reduced more than $800m over 2013 budget levels. “As a result of the continuous improvement efforts of TVA’s employees, we ended the 2016 fiscal year with lower effective rates for our customers, lower expenses, lower debt balance and higher net come,” he said.
TVA will hold a call Nov. 15, with investors and news media to review its FY 2016 financial performance. The 10-K annual report will be available the same day.
The year wasn’t without its challenges. The region experienced the wettest December on record, and the hottest and driest summer since 2010 – with dry conditions continuing.
During October, run-off across the Tennessee River watershed was less than one-tenth of an inch, the lowest in 142 years of recordkeeping. The lack of this valuable, low-cost, renewable resource means TVA has less hydro power available.
TVA managed the river to meet commitments to stakeholders and release only the minimum amount of water necessary for downstream requirements such as water quality, commercial navigation and municipal and industrial water supply.