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A corporate agency of the United States created by an act of Congress
(State or other jurisdiction of incorporation or organization)
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62-0474417
(IRS Employer Identification No.)
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400 W. Summit Hill Drive
Knoxville, Tennessee
(Address of principal executive offices)
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37902
(Zip Code)
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Table of Contents
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GLOSSARY OF COMMON ACRONYMS
.......................................................................................................................................................................................................
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FORWARD-LOOKING INFORMATION
.........................................................................................................................................................................................................
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GENERAL INFORMATION
............................................................................................................................................................................................................................
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ITEM 1. BUSINESS......................................................................................................................................................................................................................................
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The Corporation
.................................................................................................................................................................................................................................
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Service Area
.......................................................................................................................................................................................................................................
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Customers
..........................................................................................................................................................................................................................................
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Rates
..................................................................................................................................................................................................................................................
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Power Supply and Cleaner Energy Initiatives....................................................................................................................................................................................
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Fuel Supply
.........................................................................................................................................................................................................................................
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Transmission
......................................................................................................................................................................................................................................
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Weather and Seasonality
....................................................................................................................................................................................................................
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Competition
........................................................................................................................................................................................................................................
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Research and Development
...............................................................................................................................................................................................................
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Flood Control
Activities
.......................................................................................................................................................................................................................
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Environmental Stewardship Activities
.................................................................................................................................................................................................
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Economic Development Activities
......................................................................................................................................................................................................
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Regulation
..........................................................................................................................................................................................................................................
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Taxation and Tax Equivalents
.............................................................................................................................................................................................................
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Environmental Matters
.......................................................................................................................................................................................................................
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Employees
..........................................................................................................................................................................................................................................
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ITEM 1A. RISK FACTORS
............................................................................................................................................................................................................................
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ITEM 1B. UNRESOLVED STAFF COMMENTS
............................................................................................................................................................................................
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ITEM 2. PROPERTIES
..................................................................................................................................................................................................................................
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Generating Properties
........................................................................................................................................................................................................................
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Transmission Properties
.....................................................................................................................................................................................................................
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Natural Resource Stewardship Properties
.........................................................................................................................................................................................
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Buildings
.............................................................................................................................................................................................................................................
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Disposal of Property
...........................................................................................................................................................................................................................
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ITEM 3. LEGAL PROCEEDINGS
..................................................................................................................................................................................................................
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ITEM 4.
MINE SAFETY DISCLOSURES......................................................................................................................................................................................................
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ITEM 6. SELECTED FINANCIAL DATA
........................................................................................................................................................................................................
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
...................................................................
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Overview
.............................................................................................................................................................................................................................................
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Business and Mission.........................................................................................................................................................................................................................
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Executive
Overview............................................................................................................................................................................................................................
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Results of Operations.........................................................................................................................................................................................................................
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Liquidity and Capital Resources.........................................................................................................................................................................................................
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Off-Balance Sheet Arrangements.......................................................................................................................................................................................................
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Key Initiatives and Challenges...........................................................................................................................................................................................................
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Critical Accounting Policies and Estimates
.........................................................................................................................................................................................
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Fair Value Measurements...................................................................................................................................................................................................................
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New Accounting Standards and Interpretations
.................................................................................................................................................................................
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Legislative and Regulatory Matters
....................................................................................................................................................................................................
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Environmental Matters.......................................................................................................................................................................................................................
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Legal Proceedings..............................................................................................................................................................................................................................
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Risk Management Activities
...............................................................................................................................................................................................................
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
...........................................................................................................................
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
..........................................................................................................................................................
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Consolidated
Statements of Operations
.............................................................................................................................................................................................
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Consolidated
Statements of
Comprehensive Income (Loss).............................................................................................................................................................
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Consolidated
Balance Sheets
............................................................................................................................................................................................................
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Consolidated
Statements of Cash Flows
...........................................................................................................................................................................................
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Consolidated
Statements of Changes in Proprietary Capital
.............................................................................................................................................................
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Notes to Consolidated Financial Statements.....................................................................................................................................................................................
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Report of Independent Registered Public Accounting Firm
................................................................................................................................................................
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
................................................................
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ITEM 9A. CONTROLS AND PROCEDURES
...............................................................................................................................................................................................
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Disclosure Controls and Procedures
..................................................................................................................................................................................................
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Internal Control over Financial Reporting
...........................................................................................................................................................................................
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Report of Independent Registered Public Accounting Firm
................................................................................................................................................................
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ITEM 9B. OTHER INFORMATION
................................................................................................................................................................................................................
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
.............................................................................................................................
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Directors..............................................................................................................................................................................................................................................
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Executive Officers...............................................................................................................................................................................................................................
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Disclosure and Financial Code of Ethics............................................................................................................................................................................................
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Committees of the TVA Board............................................................................................................................................................................................................
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ITEM 11. EXECUTIVE COMPENSATION
.....................................................................................................................................................................................................
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Compensation Discussion and Analysis.............................................................................................................................................................................................
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Executive Compensation Tables and Narrative Disclosures..............................................................................................................................................................
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Retirement and Pension Plans...........................................................................................................................................................................................................
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Nonqualified Deferred Compensation................................................................................................................................................................................................
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Potential Payments on Account of Retirement/Resignation, Termination without Cause, Termination with Cause, or Death/Disability............................................
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Other Agreements..............................................................................................................................................................................................................................
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Director Compensation.......................................................................................................................................................................................................................
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Compensation Committee Interlocks and Insider Participation..........................................................................................................................................................
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Compensation Committee Report......................................................................................................................................................................................................
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
......................................
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
.........................................................................................
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Director Independence.......................................................................................................................................................................................................................
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Related Party Transactions................................................................................................................................................................................................................
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
......................................................................................................................................................................
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
.....................................................................................................................................................................
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SIGNATURES
................................................................................................................................................................................................................................................
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EXHIBIT INDEX
.............................................................................................................................................................................................................................................
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GLOSSARY OF COMMON ACRONYMS
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Following are definitions of some of the acronyms frequently used in this Annual Report on Form 10-K for the fiscal year ended September 30, 2015 (the “Annual Report”):
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Term or Acronym
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Definition
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AFUDC
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Allowance for funds used during construction
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AOCI
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Accumulated other comprehensive income (loss)
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ARO
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Asset retirement obligation
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ART
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Asset Retirement Trust
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ASLB
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Atomic Safety and Licensing Board
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BEST
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Bellefonte Efficiency and Sustainability Team
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BLEU
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Blended low-enriched uranium
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BREDL
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Blue Ridge Environmental Defense League
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BSER
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Best system of emission reduction
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CAA
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Clean Air Act
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CAIR
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Clean Air Interstate Rule
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CCP
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Coal combustion products
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CCR
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Coal combustion residuals
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CCW
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Coal combustion waste
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CERCLA
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Comprehensive Environmental Response, Compensation, and Liability Act
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CME
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Chicago Mercantile Exchange
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CO
2
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Carbon dioxide
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CO
2
e
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Carbon dioxide equivalent
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COL
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Combined construction and operating license application
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COLA
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Cost-of-living adjustment
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CSAPR
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Cross State Air Pollution Rule
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CTs
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Combustion turbine unit(s)
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CVA
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Credit valuation adjustment
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CY
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Calendar year
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DCP
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Deferred Compensation Plan
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DER
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Distributed energy resources
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DEU
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Discounted energy units
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DOE
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Department of Energy
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EPA
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Environmental Protection Agency
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ERS
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EnergyRight
®
Solutions programs
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ESPA
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Early Site Permit Application
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FASB
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Financial Accounting Standards Board
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FCM
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Futures Commission Merchant
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FERC
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Federal Energy Regulatory Commission
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FPA
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Federal Power Act
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FTP
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Financial Trading Program
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GAAP
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Accounting principles generally accepted in the United States of America
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GAO
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U.S. Government Accountability Office
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GHG
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Greenhouse gas
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GPP
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Green Power Providers
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GWh
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Gigawatt hour(s)
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IRP
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Integrated Resource Plan
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IRUs
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Indefeasible rights of use
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JSCCG
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John Sevier Combined Cycle Generation LLC
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kWh
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Kilowatt hour(s)
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LIBOR
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London Interbank Offered Rate
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LPC
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Local power company customer of TVA
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LTDCP
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Long-Term Deferred Compensation Plan
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MATS
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Mercury and Air Toxics Standards
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MD&A
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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MLGW
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Memphis Light, Gas and Water Division
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MLPs
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Master Limited Partnerships
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mmBtu
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Million British thermal unit(s)
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MSO
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Mixed oxide
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MtM
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Mark-to-market
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MW
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Megawatt
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NAAQS
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National Ambient Air Quality Standards
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NAV
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Net asset value
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NDT
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Nuclear Decommissioning Trust
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NEIL
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Nuclear Electric Insurance Limited
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NEPA
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National Environmental Policy Act
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NERC
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North American Electric Reliability Corporation
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NO
x
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Nitrogen oxides
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NPDES
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National Pollutant Discharge Elimination System
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NRC
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Nuclear Regulatory Commission
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NRP
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Natural Resource Plan
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NSPS
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New Source Performance Standards
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NSR
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New Source Review
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NYSE
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New York Stock Exchange
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OCI
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Other comprehensive income (loss)
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OMB
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Office of Management and Budget
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PARRS
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Putable Automatic Rate Reset Securities
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PM
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Particulate matter
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PSD
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Prevention of Significant Deterioration
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QER
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Quadrennial Energy Review
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QTE
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Qualified technological equipment and software
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REIT
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Real Estate Investment Trust
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RSO
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Renewable Standard Offer
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SACE
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Southern Alliance for Clean Energy
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SCCG
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Southaven Combined Cycle Generation LLC
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SCRs
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Selective catalytic reduction systems
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SEC
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Securities and Exchange Commission
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SERP
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Supplemental Executive Retirement Plan
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Seven States
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Seven States Power Corporation
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SHLLC
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Southaven Holdco LLC
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SMR
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Small modular reactor(s)
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SO
2
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Sulfur dioxide
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SOA
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Society of Actuaries
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SSSL
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Seven States Southaven, LLC
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TCWN
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Tennessee Clean Water Network
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TDEC
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Tennessee Department of Environment & Conservation
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TIPS
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Treasury Inflation-Protected Securities
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TOU
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Time-of-use
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TVARS
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Tennessee Valley Authority Retirement System
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TN Board
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Tennessee Board of Water Quality, Oil and Gas
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TWQCB
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Tennessee Water Quality Control Board
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USEC
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United States Enrichment Corporation
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U.S. Treasury
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United States Department of the Treasury
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VIE
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Variable interest entity
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XBRL
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eXtensible Business Reporting Language
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WCD
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Waste Confidence Decision
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•
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New, amended, or existing, laws, regulations, or administrative orders, including those related to environmental matters, and the costs of complying with these laws, regulations, and administrative orders;
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The cost of complying with known, anticipated, and new emissions reduction requirements, some of which could render continued operation of many of TVA's aging coal-fired generation units not cost-effective and result in their removal from service, perhaps permanently;
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•
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Actions taken, or inaction, by the U.S. government relating to the national debt ceiling or automatic spending cuts in government programs;
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•
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Costs and liabilities that are not anticipated in TVA’s financial statements for third-party claims, natural resource damages, or fines or penalties associated with unexpected failures of a facility or infrastructure as well as for environmental clean-up activities;
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•
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Addition or loss of customers by TVA or the
local power company customers of TVA ("LPCs")
;
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•
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Significant changes in demand for electricity which may result from, among other things, economic downturns, increased energy efficiency and conservation, and improvements in distributed generation and other alternative generation technologies;
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Significant delays, cost increases, or cost overruns associated with the construction of generation or transmission assets;
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Changes in the timing or amount of pension and health care costs;
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•
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Increases in TVA's financial liabilities for decommissioning its nuclear facilities or retiring other assets;
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•
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Physical or cyber attacks on TVA's assets;
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•
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The outcome of legal or administrative proceedings;
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•
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The failure of TVA's generation, transmission, flood control, and related assets, including
coal combustion residual ("CCR")
facilities, to operate as anticipated, resulting in lost revenues, damages, and other costs that are not reflected in TVA’s financial statements or projections;
|
•
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Differences between estimates of revenues and expenses and actual revenues earned and expenses incurred;
|
•
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Weather conditions;
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•
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Catastrophic events such as fires, earthquakes, explosions, solar events, electromagnetic pulses, droughts, floods, hurricanes, tornadoes, pandemics, wars, national emergencies, terrorist activities, and other similar events, especially if these events occur in or near TVA's service area;
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•
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Events at a TVA facility, which, among other things, could result in loss of life, damage to the environment, damage to or loss of the facility, and damage to the property of others;
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•
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Events or changes involving transmission lines, dams, and other facilities not operated by TVA, including those that affect the reliability of the interstate transmission grid of which TVA's transmission system is a part and those that increase flows across TVA's transmission grid;
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•
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Disruption of fuel supplies, which may result from, among other things, weather conditions, production or transportation difficulties, labor challenges, or environmental laws or regulations affecting TVA's fuel suppliers or transporters;
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•
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Purchased power price volatility and disruption of purchased power supplies;
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•
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Events which affect the supply of water for TVA's generation facilities;
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•
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Changes in TVA's determinations of the appropriate mix of generation assets;
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•
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TVA's organizational transformation efforts or cost reduction efforts not being fully successful;
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•
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Inability to obtain, or loss of, regulatory approval for the construction or operation of assets;
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•
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The requirement or decision to make additional contributions to TVA's pension or other post-retirement benefit plans or to TVA's
Nuclear Decommissioning Trust ("NDT")
or
Asset Retirement Trust ("ART")
;
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•
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Limitations on TVA's ability to borrow money which may result from, among other things, TVA's approaching or substantially reaching the limit on bonds, notes, and other evidences of indebtedness specified in the Tennessee Valley Authority Act of 1933, as amended;
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•
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An increase in TVA's cost of capital which may result from, among other things, changes in the market for TVA's debt securities, changes in the credit rating of TVA or the U.S. government, or, potentially, an increased reliance by TVA on alternative financing should TVA approach its debt limit;
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•
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Changes in the economy and volatility in financial markets;
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•
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Changes in technology;
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•
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Reliability and creditworthiness of counterparties;
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•
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Changes in the market price of commodities such as coal, uranium, natural gas, fuel oil, crude oil, construction materials, reagents, electricity, and emission allowances;
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•
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Changes in the market price of equity securities, debt securities, and other investments;
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•
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Changes in interest rates, currency exchange rates, and inflation rates;
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•
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Ineffectiveness of TVA's disclosure controls and procedures or its internal control over financial reporting;
|
•
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Inability to eliminate identified deficiencies in TVA's systems, standards, controls, or corporate culture;
|
•
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Inability to attract or retain a skilled workforce;
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•
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Events at a nuclear facility, whether or not operated by or licensed to TVA, which, among other things, could lead to increased regulation or restriction on the construction, ownership, operation, and decommissioning of nuclear facilities or on the storage of spent fuel, obligate TVA to pay retrospective insurance premiums, reduce the availability and affordability of insurance, increase the costs of operating TVA's existing nuclear units, negatively affect the feasibility of preserving
Bellefonte Nuclear Plant ("Bellefonte")
Unit 1 for possible completion, and cause TVA to forego future construction at these or other facilities;
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•
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Loss of quorum of the TVA Board of Directors; and
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•
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Other unforeseeable events.
|
TVA Local Power Company Customer Contracts
At September 30, 2015
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Contract Arrangements
(1)
|
Number of LPCs
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Sales to
LPCs
in 2015
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Percentage of Total Operating Revenues in 2015
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(in millions)
|
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15-year termination notice
|
7
|
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$
|
196
|
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1.8
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%
|
12-year termination notice
|
1
|
|
|
25
|
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|
0.2
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%
|
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10-year termination notice
|
49
|
|
|
3,399
|
|
|
30.9
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%
|
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5-year termination notice
|
98
|
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|
6,378
|
|
|
58.0
|
%
|
|
Total
|
155
|
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|
$
|
9,998
|
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|
90.9
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%
|
•
|
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 government's appropriation investment in TVA's power facilities (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, notes, or other evidences of indebtedness ("Bonds")
in advance of maturity, additional reduction of the Power Program Appropriation Investment, and other purposes connected with TVA’s power business.
|
•
|
Tax equivalents (other than the amount attributable to fuel cost-related revenues);
|
•
|
Other costs in accordance with the TVA Act; and
|
•
|
Debt service coverage.
|
Fossil Plant
|
Units Impacted
|
Existing Scrubbers and SCRs
(1)
|
Requirements Under Environmental Agreements
|
Actions Taken by TVA
|
Actions Planned to be Taken by TVA
|
Allen
|
3
|
SCRs on all three units
|
- Install scrubbers or retire no later than December 31, 2018
|
- The Board approved the construction of a gas-fired plant at the current location of the Allen coal-fired site
|
- Retire Units 1-3 after completion of the gas-fired plant, before December 31, 2018
|
Bull Run
|
1
|
Scrubber and SCRs on unit
|
- Continuously operate current emission control equipment
|
- Continuously operate existing emission control equipment
|
- Continuously operate existing emission control equipment
|
Colbert
|
5
|
SCR on Unit 5
|
- Remove from service, control
(2)
, convert
(3)
, or retire Units 1-4 no later than June 30, 2016
- Remove from service, control (2) , or retire Unit 5 no later than December 31, 2015 - Control or retire removed from service units within three years |
- Idled Unit 5 in October 1, 2013
|
- Retire Units 1-4 before April 16, 2016
- Retire Unit 5 no later than December 31, 2015 |
Cumberland
|
2
|
Scrubbers and SCRs on both units
|
- Continuously operate existing emission control equipment
|
- Continuously operate existing emission control equipment
|
- Continuously operate existing emission control equipment
|
Gallatin
|
4
|
None
|
- Control
(2)
, convert
(3)
, or retire all four units no later than December 31, 2017
|
- The Board approved adding scrubbers and SCRs on all four units
|
- Add scrubbers and SCRs on all four units by December 31, 2017
|
John Sevier
|
4
|
None
|
- Retire two units no later than December 31, 2012
- Remove from service two units no later than December 31, 2012 and control
(2)
, convert
(3)
, or retire those units no later than December 31, 2015
|
- Retired Units 1 and 2 on December 31, 2012
- Retired Units 3 and 4 on June 25, 2014 |
|
Johnsonville
|
10
|
None
|
- Retire six units no later than December 31, 2015
- Retire four units no later than December 31, 2017 |
- Idled Units 7 and 8 effective March 1, 2012
- Idled Units 5 and 6 and Units 9 and 10 on October 1, 2013 |
- Retire Units 5-10 by December 31, 2015
- Retire Units 1-4 by December 31, 2017
|
Kingston
|
9
|
Scrubbers and SCRs on all nine units
|
- Continuously operate existing emission control equipment
|
- Continuously operate existing emission control equipment
|
- Continuously operate existing emission control equipment
|
Paradise
|
3
|
Scrubbers and SCRs on all three units
|
- Upgrade scrubbers on Units 1 and 2 no later than December 31, 2012
- Continuously operate emission control equipment on Units 1-3 |
- The Board approved the construction of a gas-fired plant at the current location of the Paradise coal-fired plant
|
- Retire Units 1 and 2 after completion of the gas-fired plant
|
Shawnee
|
10
|
None
|
- Control
(2)
, convert
(3)
, or retire Units 1 and 4 no later than December 31, 2017
|
- Retired Unit 10 on June 30, 2014
|
- Add scrubbers and SCRs on Units 1 and 4 by December 31, 2017
|
Widows Creek
|
8
|
Scrubbers and SCRs on Units 7 and 8
|
- Retire two of Units 1-6 no later than July 31, 2013
- Retire two of Units 1-6 no later than July 31, 2014 - Retire two of Units 1-6 no later than July 31, 2015 - Continuously operate existing emissions control equipment on Units 7 and 8 |
- Retired Units 3 and 5 on July 31, 2013
- Retired Units 1, 2, 4, and 6 on July 31, 2014 - Retired Units 7 and 8 on September 30, 2015 |
|
TVA Nuclear Power
At September 30, 2015
|
|||||||
Nuclear Unit
|
Status
|
|
Nameplate Capacity (MW)
|
|
Net Capacity
Factor for
2015 (%)
|
|
Date of Expiration
of Operating
License
|
Sequoyah Unit 1
|
Operating
|
|
1,221
|
|
78.9
|
|
2040
|
Sequoyah Unit 2
|
Operating
|
|
1,221
|
|
95.7
|
|
2041
|
Browns Ferry Unit 1
|
Operating
|
|
1,264
|
|
88.9
|
|
2033
|
Browns Ferry Unit 2
|
Operating
|
|
1,190
|
|
88.5
|
|
2034
|
Browns Ferry Unit 3
|
Operating
|
|
1,190
|
|
97.2
|
|
2036
|
Watts Bar Unit 1
|
Operating
|
|
1,270
|
|
91.4
|
|
2035
|
Watts Bar Unit 2
|
Under construction
|
|
1,220
|
|
—
|
|
2055
|
•
|
50 percent from the Illinois Basin in Illinois, Indiana and Kentucky;
|
•
|
43 percent from the Powder River Basin in Wyoming;
|
•
|
two percent from the Uinta Basin of Utah and Colorado; and
|
•
|
five percent from the Appalachian Basin of Kentucky, Pennsylvania, Tennessee, Virginia, and West Virginia.
|
|
2015
|
|
Percent Change
|
|
2014
|
|
Percent Change
|
|
2013
|
Combined degree days
(normal 5,223)
|
5,587
|
|
(0.2)%
|
|
5,597
|
|
9.9%
|
|
5,095
|
Air, Water, and Waste Quality Estimated Potential Environmental Expenditures
(1)
At September 30, 2015
(in millions)
|
|||||||
|
Estimated Timetable
|
|
|
|
Total Estimated Expenditures
|
||
Site environmental remediation costs
(2)
|
2016+
|
|
|
|
$
|
23
|
|
Coal combustion residual conversion program
(3)
|
2016-2022
|
|
|
|
1,250
|
|
|
Proposed clean air control projects
(4)
|
2016-2025
|
|
|
|
750
|
|
|
Clean Water Act requirements
(5)
|
2016-2022
|
|
|
|
300
|
|
•
|
The TVA Board might be unable to set rates at a level sufficient to generate adequate revenues to service TVA's financial obligations, properly operate and maintain its power assets, and provide for reinvestment in its power program; and
|
•
|
TVA might become subject to additional regulatory oversight that could impede its ability to manage its business.
|
•
|
The value of the investments in the NDT declines significantly, as it did during the 2008-2009 recession, or the investments fail to achieve the assumed real rate of return;
|
•
|
The decommissioning funding requirements are changed by law or regulation;
|
•
|
The assumed real rate-of-return on plan assets, which is currently five percent, is lowered by the TVA Board or is overly optimistic;
|
•
|
The actual costs of decommissioning are more than planned;
|
•
|
Changes in technology and experience related to decommissioning cause decommissioning cost estimates to increase significantly;
|
•
|
TVA is required to decommission a nuclear plant sooner than it anticipates; or
|
•
|
The NRC guidelines for calculating the minimum amount of funds necessary for decommissioning activities are significantly changed.
|
•
|
Significantly disrupt operations, including the generation and transmission of electricity;
|
•
|
Negatively affect TVA's cash flows, results of operations, and financial condition;
|
•
|
Pose health and safety risks; and
|
•
|
Result in the compromise of sensitive data.
|
•
|
May have to invest a significant amount of resources to repair or replace the assets or the supporting infrastructure;
|
•
|
May have to remediate collateral damage caused by a failure of the assets or the supporting infrastructure;
|
•
|
May not be able to maintain the integrity or reliability of the transmission system at normal levels;
|
•
|
May have to operate less economical sources of power;
|
•
|
May have to purchase replacement power on the open market at prices greater than its generation costs;
|
•
|
May be required to invest substantially to meet more stringent reliability standards;
|
•
|
May be unable to maintain insurance on affected facilities, or be required to pay higher premiums for coverage, unless necessary repairs or upgrades are made;
|
•
|
May be unable to operate the assets for a significant period of time; and
|
•
|
May not be able to meet its contractual obligations to deliver power.
|
SUMMER NET CAPABILITY
(1)
At September 30, 2015
|
|||||||||||||
Source of Capability
|
Location
|
|
Number
of Units
|
|
Summer Net Capability (MW)
|
|
Date First Unit Placed in Service
|
|
Date Last Unit Placed in Service
|
||||
TVA-Operated Generating Facilities
|
|
|
|
|
|
|
|
|
|
|
|
||
Coal-Fired
|
|
|
|
|
|
|
|
|
|
|
|
||
Allen
(2)
|
Tennessee
|
|
3
|
|
|
741
|
|
|
1959
|
|
|
1959
|
|
Bull Run
|
Tennessee
|
|
1
|
|
|
863
|
|
|
1967
|
|
|
1967
|
|
Colbert
(2)
|
Alabama
|
|
4
|
|
|
712
|
|
|
1955
|
|
|
1965
|
|
Cumberland
|
Tennessee
|
|
2
|
|
|
2,470
|
|
|
1973
|
|
|
1973
|
|
Gallatin
|
Tennessee
|
|
4
|
|
|
976
|
|
|
1956
|
|
|
1959
|
|
Johnsonville
|
Tennessee
|
|
4
|
|
|
428
|
|
|
1951
|
|
|
1959
|
|
Kingston
|
Tennessee
|
|
9
|
|
|
1,398
|
|
|
1954
|
|
|
1955
|
|
Paradise
|
Kentucky
|
|
3
|
|
|
2,201
|
|
|
1963
|
|
|
1970
|
|
Shawnee
|
Kentucky
|
|
9
|
|
|
1,206
|
|
|
1953
|
|
|
1955
|
|
Total Coal-Fired
|
|
|
39
|
|
10,995
|
|
|
|
|
|
|
|
|
Nuclear
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Browns Ferry
|
Alabama
|
|
3
|
|
|
3,309
|
|
|
1974
|
|
|
1977
|
|
Sequoyah
|
Tennessee
|
|
2
|
|
|
2,292
|
|
|
1981
|
|
|
1982
|
|
Watts Bar
|
Tennessee
|
|
1
|
|
|
1,135
|
|
|
1996
|
|
|
1996
|
|
Total Nuclear
|
|
|
6
|
|
|
6,736
|
|
|
|
|
|
|
|
Hydroelectric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional Plants
|
Alabama
|
|
36
|
|
|
1,176
|
|
|
1925
|
|
|
1962
|
|
|
Georgia
|
|
2
|
|
|
33
|
|
|
1931
|
|
|
1956
|
|
|
Kentucky
|
|
5
|
|
|
223
|
|
|
1944
|
|
|
1948
|
|
|
North Carolina
|
|
6
|
|
|
492
|
|
|
1940
|
|
|
1956
|
|
|
Tennessee
|
|
60
|
|
|
1,872
|
|
|
1912
|
|
|
1972
|
|
Pumped-Storage
|
Tennessee
|
|
4
|
|
|
1,616
|
|
|
1978
|
|
|
1979
|
|
Total Hydroelectric
|
|
|
113
|
|
|
5,412
|
|
|
|
|
|
|
|
Natural Gas and/or Oil-Fired
(3),(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simple-Cycle Combustion Turbine
|
|
|
|
|
|
|
|
|
|
||||
Allen
|
Tennessee
|
|
20
|
|
|
456
|
|
|
1971
|
|
|
1972
|
|
Brownsville
|
Tennessee
|
|
4
|
|
|
468
|
|
|
1999
|
|
|
1999
|
|
Colbert
|
Alabama
|
|
8
|
|
|
392
|
|
|
1972
|
|
|
1972
|
|
Gallatin
|
Tennessee
|
|
8
|
|
|
600
|
|
|
1975
|
|
|
2000
|
|
Gleason
(5)
|
Tennessee
|
|
3
|
|
|
465
|
|
|
2000
|
|
|
2000
|
|
Johnsonville
|
Tennessee
|
|
20
|
|
|
1,133
|
|
|
1975
|
|
|
2000
|
|
Kemper
|
Mississippi
|
|
4
|
|
|
312
|
|
|
2002
|
|
|
2002
|
|
Lagoon Creek
|
Tennessee
|
|
12
|
|
|
941
|
|
|
2001
|
|
|
2002
|
|
Marshall County
|
Kentucky
|
|
8
|
|
|
621
|
|
|
2002
|
|
|
2002
|
|
Subtotal Simple-Cycle Combustion Turbine
|
|
|
87
|
|
|
5,388
|
|
|
|
|
|
|
|
Combined-Cycle Combustion Turbine
|
|
|
|
|
|
|
|
|
|
||||
Ackerman
(6)
|
Mississippi
|
|
1
|
|
|
705
|
|
|
2007
|
|
|
2007
|
|
Caledonia
(7)
|
Mississippi
|
|
3
|
|
|
765
|
|
|
2003
|
|
|
2003
|
|
John Sevier
(8)
|
Tennessee
|
|
1
|
|
|
870
|
|
|
2012
|
|
|
2012
|
|
Lagoon Creek
(9)
|
Tennessee
|
|
1
|
|
|
525
|
|
|
2010
|
|
|
2010
|
|
Magnolia
|
Mississippi
|
|
3
|
|
|
920
|
|
|
2003
|
|
|
2003
|
|
Southaven
|
Mississippi
|
|
3
|
|
|
774
|
|
|
2003
|
|
|
2003
|
|
Subtotal Combined-Cycle Combustion Turbine
|
|
|
12
|
|
|
4,559
|
|
|
|
|
|
||
Total Natural Gas and/or Oil-Fired
|
|
|
99
|
|
|
9,947
|
|
|
|
|
|
||
Diesel Generator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meridian
|
Mississippi
|
|
5
|
|
|
9
|
|
|
1998
|
|
|
1998
|
|
Total Diesel Generators
|
|
|
5
|
|
|
9
|
|
|
|
|
|
|
|
TVA Renewable Resources (non-hydro)
(10)
|
|
|
|
|
|
< 1
|
|
|
|
|
|
|
|
Total TVA-Operated Generating Facilities
|
|
|
|
|
|
33,099
|
|
|
|
|
|
|
|
Contract Renewable Resources
(11)(12)
|
|
|
|
|
|
176
|
|
|
|
|
|
|
|
Power Purchase and Other Agreements
(13)
|
|
|
|
|
|
3,189
|
|
|
|
|
|
|
|
Total Summer Net Capability
|
|
|
|
|
|
36,464
|
|
|
|
|
|
|
|
•
|
Approximately 2,500 circuit miles of 500 kilovolt, 11,500 circuit miles of 161 kilovolt, and 2,200 circuit miles of other voltage transmission lines;
|
•
|
512 transmission substations, power switchyards, and switching stations; and
|
•
|
1,293 customer connection points (customer, generation, and interconnection).
|
•
|
Approximately 11,000 miles of reservoir shoreline;
|
•
|
Approximately 293,000 acres of reservoir land;
|
•
|
Approximately 650,000 surface acres of reservoir water; and
|
•
|
Approximately 80 public recreation areas throughout the Tennessee Valley, including campgrounds, day-use areas, and boat launching ramps.
|
•
|
Under Section 31 of the TVA Act, TVA has authority to dispose of surplus real property at a public auction.
|
•
|
Under Section 4(k) of the TVA Act, TVA can dispose of real property for certain specified purposes, including providing replacement lands for certain entities whose lands were flooded or destroyed by dam or reservoir construction and to grant easements and rights-of-way upon which are located transmission or distribution lines.
|
•
|
Under Section 15d(g) of the TVA Act, TVA can dispose of real property in connection with the construction of generating plants or other facilities under certain circumstances.
|
Selected Financial Data
(1)(2)
For the years ended, or at, September 30
(dollars in millions)
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Sales (millions of kWh)
|
158,163
|
|
|
158,057
|
|
|
161,925
|
|
|
165,255
|
|
|
167,730
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Peak load (MW)
|
32,751
|
|
|
33,352
|
|
|
28,726
|
|
|
31,098
|
|
|
31,434
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
11,003
|
|
|
$
|
11,137
|
|
|
$
|
10,956
|
|
|
$
|
11,220
|
|
|
$
|
11,841
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fuel expense
|
$
|
2,444
|
|
|
$
|
2,730
|
|
|
$
|
2,820
|
|
|
$
|
2,680
|
|
|
$
|
2,926
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchased power expense
|
$
|
950
|
|
|
$
|
1,094
|
|
|
$
|
1,027
|
|
|
$
|
1,189
|
|
|
$
|
1,427
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance expense
|
$
|
2,838
|
|
|
$
|
3,341
|
|
|
$
|
3,428
|
|
|
$
|
3,510
|
|
|
$
|
3,617
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest expense
|
$
|
1,133
|
|
|
$
|
1,169
|
|
|
$
|
1,226
|
|
|
$
|
1,273
|
|
|
$
|
1,305
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
|
$
|
60
|
|
|
$
|
162
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction expenditures
|
$
|
2,850
|
|
|
$
|
2,384
|
|
|
$
|
2,051
|
|
|
$
|
2,119
|
|
|
$
|
2,417
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
48,825
|
|
|
$
|
45,596
|
|
|
$
|
46,106
|
|
|
$
|
47,334
|
|
|
$
|
46,393
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt, net
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term power bonds, net
|
$
|
22,684
|
|
|
$
|
21,948
|
|
|
$
|
22,315
|
|
|
$
|
20,269
|
|
|
$
|
22,412
|
|
Long-term debt of variable interest entities
|
$
|
1,246
|
|
|
$
|
1,279
|
|
|
$
|
1,311
|
|
|
$
|
981
|
|
|
$
|
—
|
|
Total long-term debt, net
|
$
|
23,930
|
|
|
$
|
23,227
|
|
|
$
|
23,626
|
|
|
$
|
21,250
|
|
|
$
|
22,412
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current debt, net
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term debt, net
|
$
|
1,034
|
|
|
$
|
596
|
|
|
$
|
2,432
|
|
|
$
|
1,507
|
|
|
$
|
482
|
|
Current maturities of power bonds
|
$
|
32
|
|
|
$
|
1,032
|
|
|
$
|
32
|
|
|
$
|
2,308
|
|
|
$
|
1,537
|
|
Current maturities of long-term debt of variable interest entities
|
$
|
33
|
|
|
$
|
32
|
|
|
$
|
30
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Total current debt, net
|
$
|
1,099
|
|
|
$
|
1,660
|
|
|
$
|
2,494
|
|
|
$
|
3,828
|
|
|
$
|
2,019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total debt
(3)
|
$
|
25,029
|
|
|
$
|
24,887
|
|
|
$
|
26,120
|
|
|
$
|
25,078
|
|
|
$
|
24,431
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital leases
(4)
|
$
|
105
|
|
|
$
|
109
|
|
|
$
|
43
|
|
|
$
|
35
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Membership interests of variable interest entity subject to mandatory redemption
(3)(4)
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Leaseback obligations
|
$
|
616
|
|
|
$
|
691
|
|
|
$
|
761
|
|
|
$
|
1,203
|
|
|
$
|
1,282
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy prepayment obligations
|
$
|
310
|
|
|
$
|
410
|
|
|
$
|
510
|
|
|
$
|
612
|
|
|
$
|
717
|
|
•
|
Business and Mission - a general description of TVA's business, objectives, strategic priorities, and core capabilities;
|
•
|
Executive Overview - a general overview of TVA's activities and results of operations for
2015
;
|
•
|
Results of Operations - an analysis of TVA's consolidated results of operations for the three years presented in its consolidated financial statements;
|
•
|
Liquidity and Capital Resources - an analysis of cash flows, a description of aggregate contractual obligations, and an overview of financial position;
|
•
|
Key Initiatives and Challenges - an overview of current and future initiatives and challenges facing TVA;
|
•
|
Critical Accounting Policies and Estimates - a summary of accounting policies that require critical judgments and estimates;
|
•
|
Fair Value Measurements - a description of TVA's investments and derivative instruments and valuation considerations;
|
•
|
Legislative and Regulatory Matters - a summary of laws and regulations that may impact TVA; and
|
•
|
Risk Management Activities - a description of TVA's risk governance and exposure to various market risks.
|
•
|
TVA is a government corporation.
|
•
|
The area in which TVA sells power is limited by the Tennessee Valley Authority Act of 1933, as amended (the “TVA Act”), under a provision known as the “fence”; however, another provision of federal law known as the “anti-cherrypicking” provision generally protects TVA from being forced to provide access to its transmission lines to others for the purpose of delivering power to customers within substantially all of TVA's defined service area.
|
•
|
The rates TVA charges for power are set solely by the
TVA Board of Directors (the "TVA Board")
and are not set or reviewed by another entity, such as a public utility commission. In setting rates, however, 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 be sold at rates as low as feasible.
|
•
|
TVA is not authorized to raise capital by issuing equity securities. TVA relies primarily on cash from operations and proceeds from power program borrowings to fund its operations and is authorized by the TVA Act to issue
bonds, notes, or other evidences of indebtedness ("Bonds")
in an amount not to exceed $30.0 billion outstanding at any given time. Although TVA's operations were originally funded primarily with appropriations from Congress, TVA has not received any appropriations from Congress for any activities since 1999 and, as directed by Congress, has funded essential stewardship activities primarily with power revenues.
|
•
|
Energy - Provide reliable, affordable electric power throughout the Tennessee Valley;
|
•
|
Environment - Act as steward of the region’s natural resources; and
|
•
|
Economic Development - Serve as a catalyst for sustainable economic development.
|
•
|
Rates - Maintain low rates;
|
•
|
Stewardship - Be responsible stewards;
|
•
|
Debt - Live within its means; and
|
•
|
Asset Portfolio - Meet reliability expectations and provide a balanced portfolio.
|
Corporate Measure
|
Weight
|
Actual
|
Threshold
|
Target
|
Stretch
|
Corporate total spending ($ millions)
|
40%
|
$792
|
$856
|
$837
|
$817
|
Nuclear unit capability factor (%)
|
20%
|
91.1%
|
89.8%
|
90.8%
|
92.0%
|
Coal seasonal equivalent forced outage rate (%)
|
15%
|
4.8%
|
6.4%
|
5.9%
|
5.0%
|
Load not served (system minutes)
|
10%
|
3.8
|
5.8
|
4.4
|
3.7
|
Reportable environmental events
|
10%
|
22
|
17
|
12
|
9
|
Combined cycle seasonal equivalent forced outage rate (%)
|
5%
|
0.6%
|
3.3%
|
2.1%
|
1.1%
|
Summary Consolidated Statements of Operations
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating revenues
|
$
|
11,003
|
|
|
$
|
11,137
|
|
|
$
|
10,956
|
|
Operating expenses
|
8,788
|
|
|
9,548
|
|
|
9,503
|
|
|||
Operating income
|
2,215
|
|
|
1,589
|
|
|
1,453
|
|
|||
Other income, net
|
29
|
|
|
49
|
|
|
44
|
|
|||
Net interest expense
|
1,133
|
|
|
1,169
|
|
|
1,226
|
|
|||
Net income
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
|
Variance 2015 vs. 2014
|
|
Variance 2014 vs. 2013
|
||||
Fuel cost recovery
|
$
|
(371
|
)
|
|
$
|
(19
|
)
|
Base revenue
|
230
|
|
|
208
|
|
||
Off-system sales
|
(11
|
)
|
|
(19
|
)
|
||
Other revenue
|
18
|
|
|
11
|
|
||
Total
|
$
|
(134
|
)
|
|
$
|
181
|
|
Interest Expense and Rates
For the years ended September 30
|
|||||||||||||||||
|
2015
|
|
Percent Change
|
|
2014
|
|
Percent Change
|
|
2013
|
||||||||
Interest expense
(1)
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
1,347
|
|
|
0.2
|
%
|
|
$
|
1,344
|
|
|
(3.6
|
)%
|
|
$
|
1,394
|
|
Allowance for funds used during construction
|
(214
|
)
|
|
22.3
|
%
|
|
(175
|
)
|
|
4.2
|
%
|
|
(168
|
)
|
|||
Net interest expense
|
$
|
1,133
|
|
|
(3.1
|
)%
|
|
$
|
1,169
|
|
|
(4.6
|
)%
|
|
$
|
1,226
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2015
|
|
Percent Change
|
|
2014
|
|
Percent Change
|
|
2013
|
||||||||
Interest rates (average)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Long-term outstanding power bonds
(2)
|
5.495
|
%
|
|
(1.4
|
)%
|
|
5.575
|
%
|
|
(2.6
|
)%
|
|
5.725
|
%
|
|||
Long-term debt of VIE
|
4.609
|
%
|
|
0.2
|
%
|
|
4.601
|
%
|
|
(4.6
|
)%
|
|
4.824
|
%
|
|||
Membership interests of variable interest entity subject to mandatory redemption
|
7.000
|
%
|
|
(0.2
|
)%
|
|
7.017
|
%
|
|
1.9
|
%
|
|
6.887
|
%
|
|||
Discount notes
|
0.051
|
%
|
|
—
|
%
|
|
0.051
|
%
|
|
(34.6
|
)%
|
|
0.078
|
%
|
|||
Blended
|
5.162
|
%
|
|
0.3
|
%
|
|
5.146
|
%
|
|
(2.4
|
)%
|
|
5.273
|
%
|
•
|
Operation, maintenance, and administration of its power system;
|
•
|
Payments to states and counties in lieu of taxes;
|
•
|
Debt service on outstanding Bonds;
|
•
|
Payments to the U.S. Treasury in repayment of and as a return on the government's appropriation investment in TVA's power facilities (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, having 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. See
Note 18
—
Appropriation Investment
.
|
•
|
The depreciation accruals and other charges representing the amortization of capital expenditures, and
|
•
|
The net proceeds from any disposition of power facilities,
|
•
|
The reduction of its capital obligations (including Bonds and the Power Program Appropriation Investment), or
|
•
|
Investment in power assets.
|
Short-Term Borrowing Table
|
|||||||||||||||||||||||
|
At
September 30 2015
|
|
For the year ended September 30 2015
|
|
At
September 30 2014
|
|
For the year ended September 30 2014
|
|
At
September 30 2013
|
|
For the year ended September 30 2013
|
||||||||||||
Amount Outstanding (at End of Period) or Average Amount
Outstanding (During Period)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
$
|
1,034
|
|
|
$
|
1,357
|
|
|
$
|
596
|
|
|
$
|
1,737
|
|
|
$
|
2,432
|
|
|
$
|
1,887
|
|
Weighted Average Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
0.055
|
%
|
|
0.051
|
%
|
|
0.002
|
%
|
|
0.051
|
%
|
|
0.042
|
%
|
|
0.078
|
%
|
||||||
Maximum Month-End Amount
Outstanding (During Period)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
N/A
|
|
|
$
|
2,590
|
|
|
N/A
|
|
|
$
|
2,442
|
|
|
N/A
|
|
|
$
|
3,261
|
|
Capital Expenditures
(1)
As of September 30
|
|||||||||||||||
|
Actual
|
|
Estimated Capital Expenditures
|
||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||
Watts Bar Unit 2
|
$
|
654
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other capacity expansion expenditures
|
998
|
|
|
931
|
|
|
819
|
|
|
581
|
|
||||
Environmental expenditures
|
248
|
|
|
316
|
|
|
165
|
|
|
16
|
|
||||
Coal combustion residual
|
84
|
|
|
103
|
|
|
155
|
|
|
161
|
|
||||
Transmission expenditures
|
340
|
|
|
389
|
|
|
408
|
|
|
366
|
|
||||
Other capital expenditures
(2)
|
793
|
|
|
887
|
|
|
957
|
|
|
911
|
|
||||
Total capital expenditures
|
$
|
3,117
|
|
(3)
|
$
|
2,699
|
|
|
$
|
2,504
|
|
|
$
|
2,035
|
|
Commitments and Contingencies
Payments due in the year ending September 30
|
|||||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt
(1)
|
$
|
1,066
|
|
|
$
|
1,555
|
|
|
$
|
1,682
|
|
|
$
|
1,032
|
|
|
$
|
30
|
|
|
$
|
18,514
|
|
|
$
|
23,879
|
|
Interest payments relating to debt
|
1,209
|
|
|
1,196
|
|
|
1,107
|
|
|
1,032
|
|
|
1,022
|
|
|
17,981
|
|
|
23,547
|
|
|||||||
Debt of VIEs
|
33
|
|
|
35
|
|
|
36
|
|
|
38
|
|
|
40
|
|
|
1,097
|
|
|
1,279
|
|
|||||||
Interest payments relating to debt of VIEs
|
58
|
|
|
58
|
|
|
56
|
|
|
54
|
|
|
52
|
|
|
642
|
|
|
920
|
|
|||||||
Lease obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital
|
13
|
|
|
13
|
|
|
13
|
|
|
12
|
|
|
12
|
|
|
156
|
|
|
219
|
|
|||||||
Non-cancelable operating
|
44
|
|
|
42
|
|
|
32
|
|
|
25
|
|
|
25
|
|
|
38
|
|
|
206
|
|
|||||||
Purchase obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Power
|
217
|
|
|
226
|
|
|
229
|
|
|
235
|
|
|
241
|
|
|
3,124
|
|
|
4,272
|
|
|||||||
Fuel
|
1,282
|
|
|
711
|
|
|
635
|
|
|
508
|
|
|
335
|
|
|
1,448
|
|
|
4,919
|
|
|||||||
Other
|
262
|
|
|
198
|
|
|
193
|
|
|
189
|
|
|
173
|
|
|
1,830
|
|
|
2,845
|
|
|||||||
Environmental Agreements
|
47
|
|
|
36
|
|
|
6
|
|
|
3
|
|
|
2
|
|
|
8
|
|
|
102
|
|
|||||||
Membership interests of variable interest entity subject to mandatory redemption
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
26
|
|
|
37
|
|
|||||||
Interest payments related to membership interests of variable interest entity subject to mandatory redemption
|
3
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
13
|
|
|
24
|
|
|||||||
Flood response commitment to NRC
|
11
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||||
Litigation settlements
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||||
Unfunded loan commitments
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Environmental cleanup costs-Kingston ash spill
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Long-term monitoring costs -- Kingston ash spill
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
10
|
|
|
15
|
|
|||||||
Payments on other financings
|
104
|
|
|
104
|
|
|
104
|
|
|
96
|
|
|
73
|
|
|
232
|
|
|
713
|
|
|||||||
Payments to U.S. Treasury - Return on Power Program Appropriation Investment
|
5
|
|
|
6
|
|
|
7
|
|
|
7
|
|
|
8
|
|
|
77
|
|
|
110
|
|
|||||||
Retirement Plan
(2)
|
209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|||||||
Total
|
$
|
4,590
|
|
|
$
|
4,186
|
|
|
$
|
4,105
|
|
|
$
|
3,236
|
|
|
$
|
2,019
|
|
|
$
|
45,196
|
|
|
$
|
63,332
|
|
Energy Prepayment Obligations
Obligations due in the year ending September 30
|
|||||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Energy Prepayment Obligations
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
310
|
|
Summary Table of Major Projects
|
||||||
Projects
|
|
Estimated Project Cost
(in billions)
|
|
Ending Estimated
In-Service Date
|
||
Capacity Expansion Projects
|
|
|
|
|
||
Watts Bar Unit 2
|
|
$
|
4.5
|
|
|
June 2016
|
Paradise combined cycle plant
|
|
1.1
|
|
|
June 2017
|
|
Allen combined cycle plant
|
|
1.0
|
|
|
June 2018
|
|
Environmental
|
|
|
|
|
||
Gallatin clean air controls
|
|
1.1
|
|
|
December 2017
|
•
|
Regulatory Accounting
|
•
|
Asset Retirement Obligations
|
•
|
Pension and Other Post-Retirement Benefits
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
Regulatory Accounting
|
||||
|
|
|
|
|
The TVA Board is authorized by the TVA Act to set rates for power sold to customers; thus, TVA is "self-regulated." Additionally, TVA's regulated rates are designed to recover its costs of providing electricity. In view of demand for electricity and the level of competition, TVA has assumed 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 of costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. The timeframe over which the regulatory assets are recovered from customers or regulatory liabilities are credited to customers is subject to annual TVA Board approval. At September 30, 2015, TVA had $10.9 billion of Regulatory assets and $166 million of Regulatory liabilities.
|
|
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.
|
|
TVA has not made any material changes in the accounting policy used to record regulatory assets and liabilities during the past three fiscal years.
TVA does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to record regulatory assets and liabilities.
If future recovery of regulatory assets ceases to be probable, or any of the other factors described herein cease to be applicable, TVA would be required to write off these costs and recognize them in earnings.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
Asset Retirement Obligations
|
||||
|
|
|
|
|
TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets. These obligations relate to TVA’s generating facilities, including coal-fired, nuclear, hydroelectric, and natural gas and/or oil-fired. They also pertain to coal ash impoundments, transmission facilities, and other property-related assets. Activities involved with the retirement of these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site restoration. Revisions to the estimates of asset retirement obligations ("AROs") are made whenever factors indicate that the timing or amounts of estimated cash flows have changed. Any accretion or depreciation expense related to these liabilities and assets is charged to a regulatory asset. See Note 9 —
Nuclear Decommissioning Costs
and
Non-Nuclear Decommissioning Costs
and Note 13.
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
Nuclear Decommissioning
|
||||
|
|
|
|
|
Utilities that own and operate nuclear plants are required to recognize a liability for legal obligations related to nuclear decommissioning. An equivalent amount is recorded as an increase in the value of the capitalized asset and allocated to expense over the useful life of the asset. The initial obligation is measured at its estimated fair value using various judgments and assumptions. Fair value is developed using an expected present value technique that is based on assumptions of market participants and that considers estimated retirement costs in current period dollars that are inflated to the anticipated decommissioning date and then discounted back to the date the ARO was incurred. Decommissioning cost studies are updated for each of TVA's nuclear units at least every five years. Changes in assumptions and estimates included within the calculations of the fair value of AROs could result in significantly different results than those identified and recorded in the financial statements.
TVA periodically reviews its estimated ARO costs. Any change to the ARO asset is recognized and prospectively recognized over the remaining life of the long-lived asset.
At September 30, 2015, the present value of the estimated future nuclear decommissioning cost recognized in the financial statements was $2.2 billion and was included in AROs, and the unamortized regulatory asset related to ARO costs of $1.0 billion was included in Regulatory assets.
|
|
The following key assumptions can have a significant effect on estimates related to the nuclear decommissioning costs reported in TVA's nuclear ARO liability:
Timing - In projecting decommissioning costs, two assumptions must be made to estimate the timing of plant decommissioning. First, the date of the plant's retirement must be estimated. (At a multiple unit site, the estimated retirement date is based on the unit with the longest license period remaining.) Second, an assumption must be made on the timing of the decommissioning. Prior to June 30, 2014, TVA based its decommissioning cost estimates on cost elements prescribed by the NRC to dismantle and decommission the radioactive portion of each site with the assumption that decommissioning would occur within the first seven years after plant shut down, which approximates the DECON method of decommissioning. The DECON method requires that radioactive contamination is removed from a site and safely disposed of or decontaminated to a level that permits the site to be released for unrestricted use shortly after it ceases operation. On June 30, 2014, TVA recorded a change in estimate based on the implementation of site-specific decommissioning cost studies. Additionally, TVA determined it appropriate to reflect an increase in the probability that certain of its nuclear operating licenses will be extended and that there is a probability that it will be able to delay ultimate decommissioning activities under a SAFSTOR method of decommissioning. The SAFSTOR method allows nuclear facilities to be placed and maintained in a condition that allows the facilities to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use. As such, TVA ascribed probabilities to both the SAFSTOR and DECON methods of decommissioning in order to estimate its decommissioning obligation. Decommissioning cost studies will be updated for each of TVA’s nuclear units at least every five years. While the impact of these assumptions cannot be determined with precision, either assuming license extension or extending the timing of decommissioning can significantly change the present value of these obligations. On September 28, 2015, the operating licenses for Sequoyah Units 1 and 2 were granted 20-year renewals, resulting in an increase to TVA's ARO of approximately $36 million.
Technology and Regulation - There is limited experience with actual decommissioning of large nuclear facilities. Changes in technology and experience as well as changes in regulations regarding nuclear decommissioning could cause cost estimates to change significantly. TVA's cost studies assume current technology and regulations.
Discount Rate - TVA uses rates between 1.63 percent and 5.52 percent to calculate the present value of the weighted estimated cash flows required to satisfy TVA's decommissioning obligation.
|
|
A 10 percent change in TVA's ARO for nuclear decommissioning cost at September 30, 2015, would have affected the liability by approximately $220 million.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
Non-Nuclear Decommissioning
|
||||
|
|
|
|
|
The present value of the estimated future non-nuclear decommissioning cost was $1.7 billion at September 30, 2015. 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 following key assumptions can have a significant effect on estimates related to the non-nuclear decommissioning costs:
Timing – In projecting non-nuclear decommissioning costs, the date of the asset’s retirement must be estimated. In instances where the retirement of a specific asset will precede the retirement of the generating plant, the anticipated retirement date of the specific asset is used. Additionally, TVA expects to incur certain ongoing costs subsequent to the initial asset retirement.
Method - TVA develops its cost estimates based on likelihood of decommissioning method where options exist in fulfilling legal obligations, (e.g., cap and close in place or clean closure for coal ash impoundments). Decommissioning method is determined based on several factors including available technologies, environmental studies, cost factors, resource availability, and timing requirements. As these factors are considered and decommissioning methods are determined, the detailed project schedules and estimates are adjusted.
Technology and Regulation – Changes in technology and experience as well as changes in regulations regarding non-nuclear decommissioning could cause cost estimates to change significantly. TVA’s cost estimates generally assume current technology and regulations.
In April 2015, the EPA published its final rule governing coal combustion residuals, which regulates landfill and impoundment location, design, and operations; dictates certain pond-closure conditions; and establishes groundwater monitoring and closure and post-closure standards. As a result of the ruling, TVA made revisions to the assumptions and estimates used to calculate its coal ash ARO's. Increases to estimated project costs, including expansion of work scope and higher costs of materials, resulted in an increase of $469 million of the ARO liability during the year ended September 30, 2015. TVA continues to evaluate the impact of the rule on its operations, including cost and timing estimates of related projects. As a result, further adjustments to its ARO liabilities may be required as estimates are refined.
Discount Rate – TVA uses its incremental borrowing rate over a period consistent with the remaining timeframe until the costs are expected to be incurred to calculate the present value of the weighted estimated cash flows required to satisfy TVA’s non-nuclear decommissioning obligation. At September 30, 2015, the discount rates used in the calculations range from 0.21 percent to 11.00 percent.
|
|
TVA has not made any material changes in the accounting policy used to record the non-nuclear ARO liability during the past three fiscal years.
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.
A 10 percent change in TVA's ARO for non-nuclear decommissioning costs at September 30, 2015, would have affected the liability by approximately $170 million.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
Pension and Other Post-Retirement Benefits
|
||||
|
|
|
|
|
TVA sponsors a defined benefit pension plan that is qualified under Internal Revenue Service rules and covers substantially all of its full-time annual employees hired prior to July 1, 2014. The Tennessee Valley Authority Retirement System ("TVARS"), a separate legal entity governed by its own board of directors, administers the qualified defined benefit pension plan. TVA also provides a Supplemental Executive Retirement Plan (“SERP”) to certain executives in critical positions, which provides supplemental pension benefits tied to compensation levels that exceed limits imposed by IRS rules applicable to the qualified defined benefit pension plan. Additionally, TVA provides post-retirement health care benefits for most of its full-time employees who reach retirement age while still working for TVA.
|
|
TVA's pension and other post-retirement benefits contain uncertainties because they require management to make certain assumptions related to TVA's cost to provide these benefits. Numerous factors are considered including the provisions of the plans, changing employee demographics, various actuarial calculations, assumptions, and accounting mechanisms. The most significant of these factors are discussed below.
Expected Return on Plan Assets.
The qualified defined benefit pension plan is the only plan that is funded with qualified plan
assets. In determining its expected long-term rate of return on pension plan assets, TVA uses a process that incorporates actual
historical asset class returns and an assessment of expected future performance and takes into consideration external actuarial advice and asset class factors. Asset allocations are periodically updated using the pension plan asset/liability studies, and are part of the determination of the estimates of long-term rates of return. The current asset allocation policy approved by the TVARS Board diversifies plan assets across multiple asset classes so as to minimize the risk of large losses. The asset allocation policy is designed to be dynamic in nature and responsive to changes in the funded status of TVARS. Changes in the expected return rates are based on annual studies performed by third party professional investment consultants. Considering there were no changes to the asset allocation policy and after reviewing the 2015 annual study and the current outlook on capital markets, TVA management decided to maintain the expected return on assets at 7.00 percent, which will be used to measure 2016 net periodic benefit cost. TVA used an expected rate of return of 7.00 percent to measure benefit costs in 2015 and used 7.25 percent to measure benefit costs in 2014 and 2013.
|
|
Accounting Mechanisms
. In accordance with current accounting guidance, TVA utilizes a number of accounting mechanisms that reduce the volatility of reported pension expense. Differences between actuarial assumptions and actual plan results are deferred and are amortized into periodic expense only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees.
Expected Return on Plan Assets
. TVA recognizes the impact of asset performance on pension expense over a three-year phase-in period through a market-related value of assets calculation. Since the market-related value of assets recognizes investment gains and losses over a three-year period, the future value of assets will be impacted as previously deferred gains or losses are recognized. As a result, losses that the pension plan assets experience may have an adverse impact on pension expense in future years depending on whether the actuarial losses at each measurement date exceed 10 percent of the greater of the projected pension benefit obligation or the market-related value of plan assets in accordance with current accounting methodologies.
The actuarial gain (loss) related to the difference between expected and actual return on pension plan assets for 2015 and 2014 was $(762) million and $213 million, respectively. Compared with the assumed returns of 7.00 and 7.25 percent, the 2015 and 2014 actuarial gain (loss) is due to the actual rates of return on the fair value of assets of (4.48) percent and 9.29 percent, respectively. The differences between expected and actual returns that result in an actuarial gain or loss are recognized as a decrease or increase, respectively, in the related regulatory asset and the projected pension benefit obligation. A higher expected rate of return assumption decreases the net periodic pension benefit cost, whereas a lower expected rate of return assumption increases the net periodic pension benefit cost. A 0.25 percent decrease in the expected rate of return on plan assets would increase the 2015 net periodic pension cost by $16 million.
Changes in the expected rate of return on pension plan assets do not affect TVA’s post-retirement benefit plans because TVA does not separately set aside assets to fund such benefits. TVA funds its post-retirement plan benefits on an as-paid basis. These changes in the expected rate of return on pension plan assets also do not impact the Supplemental Executive Retirement Plan ("SERP") as any assets set aside for that plan are not considered plan assets under GAAP.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
|
|
Discount Rate.
In the case of selecting an assumed discount rate, TVA reviews market yields on high-quality corporate debt and long-term obligations of the U.S. Treasury and endeavors to match, through the use of a hypothetical bond portfolio, instrument maturities with the maturities of its pension obligations in accordance with the prevailing accounting standards. The selected bond portfolio is derived from a universe of high quality corporate bonds of Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan's projected benefit payments discounted at this rate with the market value of the bonds selected. The discount rates used to determine the pension and other post-retirement benefit obligations were 4.50 percent and 4.65 percent, respectively, at September 30, 2015. At September 30, 2014, the discount rates used to determine the pension and other post-retirement benefit obligations were 4.45 percent and 4.50 percent, respectively. The discount rate assumptions used to determine the obligations at year-end are used to determine the net periodic benefit cost for the following year. TVA will use discount rates of 4.50 percent and 4.65 percent to estimate its 2016 pension and other post-retirement net periodic benefit costs, respectively. The discount rate is somewhat volatile because it is determined based upon the prevailing rate as of the measurement date.
Mortality.
Mortality assumptions are based upon actuarial projections in combination with actuarial studies of the actual mortality experience of TVA’s pension and post-retirement plan participants. Based upon a review of the 2013 actuarial experience study, TVA adopted the Society of Actuaries ("SOA") RP-2000 base table projected with a modified improvement scale for purposes of measuring its pension and other post-retirement benefits as of September 30, 2013. In 2014, the SOA released a new base table (RP-2014) and improvement scale (MP-2014). However, based upon analysis of the 2014 actuarial experience study, the results indicated that mortality experience remained in line with the assumptions adopted in 2013. Therefore, TVA retained its 2013 mortality assumptions for purposes of measuring its pension and other post-retirement benefit obligations at September 30, 2014. The actuarial experience study was further updated in 2015. Based on analysis of the 2015 study, the 2014 SOA study of mortality tables, and recent additional studies of mortality improvement that was updated by the SOA in October 2015 (MP-2015), TVA adopted an adjusted version of the SOA’s new RP-2014 mortality tables and a modified MP-2014 improvement scale for purposes of measuring its pension and other post-retirement benefit obligations at September 30, 2015.
|
|
Discount Rate
. A higher discount rate decreases the plan obligations and correspondingly decreases the net periodic pension and net post-retirement benefit costs for those plans where actuarial losses are being amortized. On the other hand, a lower discount rate increases net periodic pension and net periodic post-retirement benefit costs.
Assuming the other components of the calculation are held constant and excluding any impact for unamortized gains or losses, a 0.25 percent decrease would increase the 2015 net periodic pension cost by $18 million and the 2015 projected pension benefit obligation by $404 million
.
As the mortality assumptions improve, (e.g., assume participants are living longer) the benefit obligation increases.
The change to the mortality assumption increased the pension and other post-retirement benefit obligations by $518 million and $21 million, respectively, as of September 30, 2015.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From Assumptions
|
|
|
|
|
|
|
|
Health Care Cost Trends.
TVA reviews actual recent cost trends and projected future trends in establishing health care cost trend rates. The assumed health care trend rates used to determine post-retirement benefit obligations for 2015 and 2014 were 7.00 percent and 7.50 percent, respectively. The 2015 health care cost trend rate of 7.00 percent used to determine post-retirement benefit obligations is assumed to gradually decrease each successive year until it reaches a 5.00 percent annual increase in health care costs in the years beginning October 1, 2019, and beyond. The assumed health care cost trend rates used to determine the net periodic post-retirement cost were 7.50 percent for 2015, 8.00 percent for 2014, and 8.5 percent for 2013. TVA plans to use 7.00 percent in the determination of 2016 net periodic post-retirement cost. The current trend rate assumption reflects the review of TVA medical claims, slight expected increases in premiums for 2016, and more participants moving to the high deductible plan.
Cost of Living Adjustment.
Cost-of-living adjustments ("COLAs") are an increase in the benefits for eligible retirees to help maintain the purchasing power of benefits as consumer prices increase. Eligible retirees receive a COLA on the base pension portion of the monthly pension benefit in January following any year in which the 12-month average Consumer Price Index for All Urban Consumers ("CPI-U") exceeded by as much as one percent the 12-month average of the CPI-U for the preceding year. The minimum COLA is one percent and the maximum is five percent. Prior to 2013, TVA had maintained a 2.5 percent COLA, but determined that a more accurate estimate would be to lower the COLA for the short-term with a gradual increase that would trend back up to the long-term expectations based upon the economic forecast and the Federal Reserve policy. As of 2015, the economy is recovering more slowly than anticipated, and the Federal Reserve has reaffirmed its intention to keep the target range for the federal funds rate at 0 to 0.25 percent. As a result, TVA determined it should decrease the COLA assumption in 2016 to zero percent with an increase to 2.20 percent in 2017, followed by gradual increases in successive years until it reaches the ultimate rate of 2.40 percent in 2021.
Contributions
. The minimum contribution for 2015 was $215 million; however, TVA made a $275 million contribution to TVARS. The 2014 minimum contribution was $198 million; however, TVA contributed $250 million to TVARS. In 2015, TVA made contributions of $7 million to the SERP and $44 million to the other post-retirement benefit plans. In 2014, TVA made contributions of $6 million to the SERP and $47 million to the other post-retirement benefit plans. TVA expects to contribute $275 million to TVARS, $6 million to the SERP, and $39 million to the other post-retirement benefit plans in 2016.
|
|
Periodic post-retirement benefit cost could fluctuate if there are changes in the health care cost trend rate. Assuming that the other components of the calculation are held constant and excluding any impact for unamortized actuarial gains or losses, a one percent increase in the assumed health care cost trend rate would impact the post-retirement service and interest cost components by $6 million and the accumulated post-retirement benefit obligation by $88 million. Likewise, a one percent decrease in the health care cost trend rate would impact the post-retirement service and interest cost components by $(6) million and the accumulated post-retirement benefit obligation by $(94) million.
A higher COLA assumption increases the pension benefit obligation and correspondingly increases the net periodic pension benefit cost. A lower COLA assumption decreases the pension benefit obligation and the net periodic pension benefit cost. Assuming the other components of the calculation are held constant and excluding any impact for unamortized actuarial gains or losses, a 0.25 percent increase in the COLA assumption would increase the 2015 pension benefit obligation by $268 million and increase the net periodic pension benefit cost by $28 million.
|
Customer Credit Risk
At September 30
|
|||||||
|
2015
|
|
2014
|
||||
Trade accounts receivable
(1)
|
|
|
|
||||
Investment grade
|
|
|
|
||||
Local power companies
|
$
|
770
|
|
|
$
|
798
|
|
Exchange power arrangements
|
2
|
|
|
1
|
|
||
Industries and federal agencies directly served
|
41
|
|
|
49
|
|
||
Internally rated - investment grade
|
|
|
|
|
|||
Local power companies
|
677
|
|
|
704
|
|
||
Exchange power arrangements
|
—
|
|
|
1
|
|
||
Industries and federal agencies directly served
|
5
|
|
|
9
|
|
||
Non-investment grade
|
|
|
|
|
|
||
Industries and federal agencies directly served
|
7
|
|
|
4
|
|
||
Internally rated - non-investment grade
|
|
|
|
|
|
||
Exchange power arrangements
|
3
|
|
|
3
|
|
||
Industries and federal agencies directly served
|
4
|
|
|
7
|
|
||
Total trade accounts receivable
|
1,509
|
|
|
1,576
|
|
||
Other accounts receivable
|
|
|
|
|
|
||
Miscellaneous accounts
|
92
|
|
|
101
|
|
||
Provision for uncollectible accounts
|
(1
|
)
|
|
(1
|
)
|
||
Total other accounts receivable
|
91
|
|
|
100
|
|
||
Accounts receivable, net
|
$
|
1,600
|
|
|
$
|
1,676
|
|
•
|
A downgrade could increase TVA’s interest expense by increasing the interest rates that TVA pays on new Bonds that it issues. An increase in TVA’s interest expense may reduce the amount of cash available for other purposes, which may result in the need to increase borrowings, to reduce other expenses or capital investments, or to increase power rates.
|
•
|
A downgrade could result in TVA's having to post additional collateral under certain physical and financial contracts that contain rating triggers.
|
•
|
A downgrade below a contractual threshold could prevent TVA from borrowing under three credit facilities totaling $2.5 billion.
|
•
|
A downgrade could lower the price of TVA securities in the secondary market, thereby hurting investors who sell TVA securities after the downgrade and diminishing the attractiveness and marketability of TVA Bonds.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Operating revenues
|
|
|
|
|
|
||||||
Revenue from sales of electricity
|
$
|
10,847
|
|
|
$
|
10,999
|
|
|
$
|
10,829
|
|
Other revenue
|
156
|
|
|
138
|
|
|
127
|
|
|||
Total operating revenues
|
11,003
|
|
|
11,137
|
|
|
10,956
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|||
Fuel
|
2,444
|
|
|
2,730
|
|
|
2,820
|
|
|||
Purchased power
|
950
|
|
|
1,094
|
|
|
1,027
|
|
|||
Operating and maintenance
|
2,838
|
|
|
3,341
|
|
|
3,428
|
|
|||
Depreciation and amortization
|
2,031
|
|
|
1,843
|
|
|
1,680
|
|
|||
Tax equivalents
|
525
|
|
|
540
|
|
|
548
|
|
|||
Total operating expenses
|
8,788
|
|
|
9,548
|
|
|
9,503
|
|
|||
Operating income
|
2,215
|
|
|
1,589
|
|
|
1,453
|
|
|||
Other income (expense), net
|
29
|
|
|
49
|
|
|
44
|
|
|||
Interest expense
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
1,347
|
|
|
1,344
|
|
|
1,394
|
|
|||
Allowance for funds used during construction
|
(214
|
)
|
|
(175
|
)
|
|
(168
|
)
|
|||
Net interest expense
|
1,133
|
|
|
1,169
|
|
|
1,226
|
|
|||
Net income (loss)
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Net unrealized gain (loss) on cash flow hedges
|
(72
|
)
|
|
4
|
|
|
78
|
|
|||
Reclassification to earnings from cash flow hedges
|
65
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(7
|
)
|
|
$
|
2
|
|
|
$
|
77
|
|
Total comprehensive income (loss)
|
$
|
1,104
|
|
|
$
|
471
|
|
|
$
|
348
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
ASSETS
|
|||||||
|
2015
|
|
2014
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
300
|
|
|
$
|
500
|
|
Restricted cash and investments
|
15
|
|
|
19
|
|
||
Accounts receivable, net
|
1,600
|
|
|
1,676
|
|
||
Inventories, net
|
1,031
|
|
|
1,056
|
|
||
Regulatory assets
|
506
|
|
|
481
|
|
||
Other current assets
|
54
|
|
|
56
|
|
||
Total current assets
|
3,506
|
|
|
3,788
|
|
||
|
|
|
|
||||
Property, plant, and equipment
|
|
|
|
|
|
||
Completed plant
|
50,069
|
|
|
47,564
|
|
||
Less accumulated depreciation
|
(26,318
|
)
|
|
(24,589
|
)
|
||
Net completed plant
|
23,751
|
|
|
22,975
|
|
||
Construction in progress
|
7,147
|
|
|
5,951
|
|
||
Nuclear fuel
|
1,415
|
|
|
1,322
|
|
||
Capital leases
|
94
|
|
|
102
|
|
||
Total property, plant, and equipment, net
|
32,407
|
|
|
30,350
|
|
||
|
|
|
|
||||
Investment funds
|
2,011
|
|
|
1,981
|
|
||
|
|
|
|
||||
Regulatory and other long-term assets
|
|
|
|
|
|
||
Regulatory assets
|
10,418
|
|
|
8,994
|
|
||
Other long-term assets
|
483
|
|
|
483
|
|
||
Total regulatory and other long-term assets
|
10,901
|
|
|
9,477
|
|
||
|
|
|
|
||||
Total assets
|
$
|
48,825
|
|
|
$
|
45,596
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
LIABILITIES AND PROPRIETARY CAPITAL
|
|||||||
|
2015
|
|
2014
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
2,127
|
|
|
$
|
2,050
|
|
Accrued interest
|
366
|
|
|
380
|
|
||
Current portion of leaseback obligations
|
79
|
|
|
75
|
|
||
Current portion of energy prepayment obligations
|
100
|
|
|
100
|
|
||
Regulatory liabilities
|
164
|
|
|
184
|
|
||
Short-term debt, net
|
1,034
|
|
|
596
|
|
||
Current maturities of power bonds
|
32
|
|
|
1,032
|
|
||
Current maturities of long-term debt of variable interest entities
|
33
|
|
|
32
|
|
||
Total current liabilities
|
3,935
|
|
|
4,449
|
|
||
|
|
|
|
||||
Other liabilities
|
|
|
|
||||
Post-retirement and post-employment benefit obligations
|
7,107
|
|
|
5,839
|
|
||
Asset retirement obligations
|
3,682
|
|
|
3,089
|
|
||
Other long-term liabilities
|
2,219
|
|
|
1,962
|
|
||
Leaseback obligations
|
537
|
|
|
616
|
|
||
Energy prepayment obligations
|
210
|
|
|
310
|
|
||
Regulatory liabilities
|
2
|
|
|
—
|
|
||
Total other liabilities
|
13,757
|
|
|
11,816
|
|
||
|
|
|
|
||||
Long-term debt, net
|
|
|
|
||||
Long-term power bonds, net
|
22,684
|
|
|
21,948
|
|
||
Long-term debt of variable interest entities
|
1,246
|
|
|
1,279
|
|
||
Total long-term debt, net
|
23,930
|
|
|
23,227
|
|
||
|
|
|
|
||||
Total liabilities
|
41,622
|
|
|
39,492
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 22)
|
|
|
|
||||
|
|
|
|
||||
Proprietary capital
|
|
|
|
||||
Power program appropriation investment
|
258
|
|
|
258
|
|
||
Power program retained earnings
|
6,357
|
|
|
5,240
|
|
||
Total power program proprietary capital
|
6,615
|
|
|
5,498
|
|
||
Nonpower programs appropriation investment, net
|
590
|
|
|
601
|
|
||
Accumulated other comprehensive income (loss)
|
(2
|
)
|
|
5
|
|
||
Total proprietary capital
|
7,203
|
|
|
6,104
|
|
||
|
|
|
|
||||
Total liabilities and proprietary capital
|
$
|
48,825
|
|
|
$
|
45,596
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
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)
|
2,077
|
|
|
1,888
|
|
|
1,723
|
|
|||
Amortization of nuclear fuel cost
|
277
|
|
|
279
|
|
|
268
|
|
|||
Non-cash retirement benefit expense
|
332
|
|
|
572
|
|
|
622
|
|
|||
Prepayment credits applied to revenue
|
(100
|
)
|
|
(100
|
)
|
|
(102
|
)
|
|||
Fuel cost adjustment deferral
|
(6
|
)
|
|
(38
|
)
|
|
97
|
|
|||
Fuel cost tax equivalents
|
(18
|
)
|
|
6
|
|
|
2
|
|
|||
Changes in current assets and liabilities
|
|
|
|
|
|
|
|
||||
Accounts receivable, net
|
93
|
|
|
(79
|
)
|
|
114
|
|
|||
Inventories and other current assets, net
|
(12
|
)
|
|
34
|
|
|
27
|
|
|||
Accounts payable and accrued liabilities
|
(121
|
)
|
|
147
|
|
|
(296
|
)
|
|||
Accrued interest
|
(13
|
)
|
|
2
|
|
|
1
|
|
|||
Regulatory assets costs
|
(23
|
)
|
|
(56
|
)
|
|
(21
|
)
|
|||
Pension contributions
|
(282
|
)
|
|
(256
|
)
|
|
(6
|
)
|
|||
Insurance recoveries
|
63
|
|
|
175
|
|
|
47
|
|
|||
Other, net
|
(63
|
)
|
|
(63
|
)
|
|
(150
|
)
|
|||
Net cash provided by operating activities
|
3,315
|
|
|
2,980
|
|
|
2,597
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Construction expenditures
|
(2,850
|
)
|
|
(2,384
|
)
|
|
(2,051
|
)
|
|||
Combustion turbine asset acquisition
|
(342
|
)
|
|
—
|
|
|
—
|
|
|||
Nuclear fuel expenditures
|
(350
|
)
|
|
(326
|
)
|
|
(287
|
)
|
|||
Purchases of investments, net
|
(52
|
)
|
|
(48
|
)
|
|
(48
|
)
|
|||
Loans and other receivables
|
|
|
|
|
|
|
|
||||
Advances
|
(17
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Repayments
|
8
|
|
|
6
|
|
|
9
|
|
|||
Other, net
|
18
|
|
|
2
|
|
|
(2
|
)
|
|||
Net cash used in investing activities
|
(3,585
|
)
|
|
(2,756
|
)
|
|
(2,385
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Long-term debt
|
|
|
|
|
|
|
|
|
|||
Issues of power bonds
|
973
|
|
|
989
|
|
|
2,122
|
|
|||
Issues of variable interest entities
|
—
|
|
|
—
|
|
|
360
|
|
|||
Redemptions and repurchases of power bonds
|
(1,180
|
)
|
|
(365
|
)
|
|
(2,358
|
)
|
|||
Payments on debt of variable interest entities
|
(32
|
)
|
|
(30
|
)
|
|
(13
|
)
|
|||
Short-term debt issues (redemptions), net
|
437
|
|
|
(1,837
|
)
|
|
924
|
|
|||
Payments on leases and leasebacks
|
(80
|
)
|
|
(73
|
)
|
|
(446
|
)
|
|||
Financing costs, net
|
(7
|
)
|
|
(4
|
)
|
|
(20
|
)
|
|||
Payments to U.S. Treasury
|
(5
|
)
|
|
(14
|
)
|
|
(27
|
)
|
|||
Other, net
|
(36
|
)
|
|
8
|
|
|
(20
|
)
|
|||
Net cash (used in) provided by financing activities
|
70
|
|
|
(1,326
|
)
|
|
522
|
|
|||
Net change in cash and cash equivalents
|
(200
|
)
|
|
(1,102
|
)
|
|
734
|
|
|||
Cash and cash equivalents at beginning of year
|
500
|
|
|
1,602
|
|
|
868
|
|
|||
Cash and cash equivalents at end of year
|
$
|
300
|
|
|
$
|
500
|
|
|
$
|
1,602
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Power Program Appropriation Investment
|
|
Power Program Retained Earnings
|
|
Nonpower Programs Appropriation Investment, Net
|
|
Accumulated Other Comprehensive Income (Loss)from Net Gains (Losses) on Cash Flow Hedges
|
|
Total
|
||||||||||
Balance at September 30, 2012
|
$
|
288
|
|
|
$
|
4,492
|
|
|
$
|
620
|
|
|
$
|
(74
|
)
|
|
$
|
5,326
|
|
Net income (loss)
|
—
|
|
|
282
|
|
|
(11
|
)
|
|
—
|
|
|
271
|
|
|||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
|||||
Return on power program appropriation investment
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Return of power program appropriation investment
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||
Balance at September 30, 2013
|
$
|
268
|
|
|
$
|
4,767
|
|
|
$
|
609
|
|
|
$
|
3
|
|
|
$
|
5,647
|
|
Net income (loss)
|
—
|
|
|
477
|
|
|
(8
|
)
|
|
—
|
|
|
469
|
|
|||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||
Return on power program appropriation investment
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Return of power program appropriation investment
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Balance at September 30, 2014
|
$
|
258
|
|
|
$
|
5,240
|
|
|
$
|
601
|
|
|
$
|
5
|
|
|
$
|
6,104
|
|
Net income (loss)
|
—
|
|
|
1,122
|
|
|
(11
|
)
|
|
—
|
|
|
1,111
|
|
|||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Return on power program appropriation investment
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Balance at September 30, 2015
|
$
|
258
|
|
|
$
|
6,357
|
|
|
$
|
590
|
|
|
$
|
(2
|
)
|
|
$
|
7,203
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
Note
|
Page No.
|
||
|
|||
|
|||
|
Restructuring
|
||
|
|||
|
Inventories, net
|
||
|
Acquisition
|
||
7
|
|
Net Completed Plant
|
|
8
|
|
||
9
|
|
||
10
|
|
Variable Interest Entities
|
|
11
|
|
||
12
|
|
||
13
|
|
||
14
|
|
Debt
and Other Obligations
|
|
15
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
16
|
|
||
17
|
|
||
18
|
|
Proprietary Capital
|
|
19
|
|
||
20
|
|
Supplemental Cash Flow Information
|
|
21
|
|
||
22
|
|
Commitments and Contingencies
|
|
23
|
|
Related Parties
|
|
24
|
|
Unaudited Quarterly Financial Information
|
•
|
Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See
Note 22
—
Contingencies
—
Nuclear Insurance
.
|
•
|
Excess liability insurance for aviation, auto, marine, and general liability exposures.
|
•
|
Property insurance for certain conventional (non-nuclear) assets.
|
Severance Cost Liability Activity
For the years ended September 30
|
||||||||
|
|
2015
|
|
2014
|
||||
Severance cost liability at beginning of period
|
|
$
|
45
|
|
|
$
|
—
|
|
Liabilities incurred during the period
|
|
9
|
|
|
65
|
|
||
Actual costs paid during the period
|
|
(45
|
)
|
|
(20
|
)
|
||
Adjustments to estimate during the period
|
|
(1
|
)
|
|
—
|
|
||
Severance cost liability at end of period
|
|
$
|
8
|
|
|
$
|
45
|
|
Inventories, Net
At September 30
|
|||||||
|
2015
|
|
2014
|
||||
Materials and supplies inventory
|
$
|
651
|
|
|
$
|
616
|
|
Fuel inventory
|
414
|
|
|
473
|
|
||
Emission allowance inventory, net
|
13
|
|
|
13
|
|
||
Allowance for inventory obsolescence
|
(47
|
)
|
|
(46
|
)
|
||
Inventories, net
|
$
|
1,031
|
|
|
$
|
1,056
|
|
Net Completed Plant
At September 30
|
|||||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||
|
Cost
|
|
Accumulated Depreciation
|
|
Net
|
|
Cost
|
|
Accumulated Depreciation
|
|
Net
|
||||||||||||
Coal-fired
|
$
|
15,202
|
|
|
$
|
9,942
|
|
|
$
|
5,260
|
|
|
$
|
14,078
|
|
|
$
|
9,065
|
|
|
$
|
5,013
|
|
Gas and oil-fired
|
3,794
|
|
|
1,194
|
|
|
2,600
|
|
|
3,411
|
|
|
1,094
|
|
|
2,317
|
|
||||||
Nuclear
|
18,920
|
|
|
10,063
|
|
|
8,857
|
|
|
18,489
|
|
|
9,593
|
|
|
8,896
|
|
||||||
Transmission
|
6,803
|
|
|
2,823
|
|
|
3,980
|
|
|
6,519
|
|
|
2,683
|
|
|
3,836
|
|
||||||
Hydroelectric
|
2,702
|
|
|
911
|
|
|
1,791
|
|
|
2,547
|
|
|
889
|
|
|
1,658
|
|
||||||
Other electrical plant
|
1,678
|
|
|
997
|
|
|
681
|
|
|
1,550
|
|
|
885
|
|
|
665
|
|
||||||
Subtotal
|
49,099
|
|
|
25,930
|
|
|
23,169
|
|
|
46,594
|
|
|
24,209
|
|
|
22,385
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multipurpose dams
|
928
|
|
|
371
|
|
|
557
|
|
|
928
|
|
|
364
|
|
|
564
|
|
||||||
Other stewardship
|
42
|
|
|
17
|
|
|
25
|
|
|
42
|
|
|
16
|
|
|
26
|
|
||||||
Subtotal
|
970
|
|
|
388
|
|
|
582
|
|
|
970
|
|
|
380
|
|
|
590
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
50,069
|
|
|
$
|
26,318
|
|
|
$
|
23,751
|
|
|
$
|
47,564
|
|
|
$
|
24,589
|
|
|
$
|
22,975
|
|
Other Long-Term Assets
At September 30
|
|||||||
|
2015
|
|
2014
|
||||
EnergyRight
®
receivables
|
$
|
124
|
|
|
$
|
123
|
|
Unamortized debt issue cost of power bonds and variable interest entities
|
80
|
|
|
68
|
|
||
Loans and other long-term receivables, net
|
126
|
|
|
87
|
|
||
Commodity contract derivative assets
|
1
|
|
|
—
|
|
||
Prepaid capacity payments
|
52
|
|
|
58
|
|
||
Currency swap assets, net
|
25
|
|
|
—
|
|
||
Restricted cash
|
—
|
|
|
64
|
|
||
Other
|
75
|
|
|
83
|
|
||
Total other long-term assets
|
$
|
483
|
|
|
$
|
483
|
|
Regulatory Assets and Liabilities
At September 30
|
|||||||
|
2015
|
|
2014
|
||||
Current regulatory assets
|
|
|
|
||||
Deferred nuclear generating units
|
$
|
237
|
|
|
$
|
237
|
|
Unrealized losses on commodity derivatives
|
162
|
|
|
134
|
|
||
Environmental agreements
|
47
|
|
|
54
|
|
||
Environmental cleanup costs – Kingston ash spill
|
43
|
|
|
47
|
|
||
Fuel cost adjustment receivable
|
15
|
|
|
9
|
|
||
Other current regulatory assets
|
2
|
|
|
—
|
|
||
Total current regulatory assets
|
506
|
|
|
481
|
|
||
|
|
|
|
||||
Non-current regulatory assets
|
|
|
|
|
|
||
Deferred pension costs and other post-retirement benefits costs
|
5,565
|
|
|
4,297
|
|
||
Unrealized losses on interest rate derivatives
|
1,236
|
|
|
957
|
|
||
Nuclear decommissioning costs
|
1,003
|
|
|
931
|
|
||
Environmental cleanup costs - Kingston ash spill
|
348
|
|
|
421
|
|
||
Non-nuclear decommissioning costs
|
828
|
|
|
645
|
|
||
Deferred nuclear generating units
|
1,042
|
|
|
1,255
|
|
||
Environmental agreements
|
55
|
|
|
108
|
|
||
Unrealized losses on commodity derivatives
|
63
|
|
|
72
|
|
||
Other non-current regulatory assets
|
278
|
|
|
308
|
|
||
Total non-current regulatory assets
|
10,418
|
|
|
8,994
|
|
||
Total regulatory assets
|
$
|
10,924
|
|
|
$
|
9,475
|
|
|
|
|
|
||||
Current regulatory liabilities
|
|
|
|
|
|
||
Fuel cost adjustment tax equivalents
|
$
|
164
|
|
|
$
|
182
|
|
Unrealized gains on commodity derivatives
|
—
|
|
|
2
|
|
||
Total current regulatory liabilities
|
164
|
|
|
184
|
|
||
Non-current regulatory liabilities
|
|
|
|
|
|
||
Unrealized gains on commodity derivatives
|
2
|
|
|
—
|
|
||
Total non-current regulatory liabilities
|
2
|
|
|
—
|
|
||
Total regulatory liabilities
|
$
|
166
|
|
|
$
|
184
|
|
Other Long-Term Liabilities
At September 30
|
|||||||
|
2015
|
|
2014
|
||||
Interest rate swap liabilities
|
$
|
1,627
|
|
|
$
|
1,348
|
|
EnergyRight
®
financing obligation
|
148
|
|
|
152
|
|
||
Environmental agreements liability
|
55
|
|
|
108
|
|
||
Currency swap liabilities
|
47
|
|
|
15
|
|
||
Membership interests of VIE subject to mandatory redemption
|
35
|
|
|
37
|
|
||
Commodity contract derivative liabilities
|
17
|
|
|
17
|
|
||
Commodity swap derivative liabilities
|
10
|
|
|
14
|
|
||
Other
|
280
|
|
|
271
|
|
||
Total other long-term liabilities
|
$
|
2,219
|
|
|
$
|
1,962
|
|
Asset Retirement Obligation Activity
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
Nuclear
|
|
Non-Nuclear
|
|
Total
|
|
||||||
Balance at September 30, 2013
|
$
|
2,399
|
|
|
$
|
1,089
|
|
|
$
|
3,488
|
|
|
|
|
|
|
|
|
|
||||||
Settlements (ash storage areas)
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|
|||
Change in estimate (nuclear site - specific studies)
|
(472
|
)
|
|
—
|
|
|
(472
|
)
|
|
|||
Change in estimate (other)
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
|||
Accretion (recorded to regulatory asset)
|
125
|
|
|
52
|
|
|
177
|
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at September 30, 2014
|
$
|
2,052
|
|
|
$
|
1,117
|
|
|
$
|
3,169
|
|
(1)
|
|
|
|
|
|
|
|
||||||
Settlements (ash storage areas)
|
—
|
|
|
(58
|
)
|
|
(58
|
)
|
|
|||
Change in estimate (coal combustion residuals rule)
|
—
|
|
|
469
|
|
|
469
|
|
|
|||
Change in estimate (nuclear license extension)
|
36
|
|
|
—
|
|
|
36
|
|
|
|||
Change in estimate (other)
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
|
|||
Additional obligations
|
—
|
|
|
101
|
|
|
101
|
|
|
|||
Accretion (recorded to regulatory asset)
|
99
|
|
|
52
|
|
|
151
|
|
|
|||
|
|
|
|
|
|
|
||||||
Balance at September 30, 2015
|
$
|
2,187
|
|
|
$
|
1,656
|
|
|
$
|
3,843
|
|
(1)
|
Debt Securities Activity
For the years ended September 30
|
||||||||
|
|
2015
|
|
2014
|
||||
Issues
|
|
|
|
|
||||
2014 Series A
(1)
|
|
—
|
|
|
1,000
|
|
||
2015 Series A
(2)
|
|
1,000
|
|
|
—
|
|
||
Discount on debt issues
|
|
(27
|
)
|
|
(11
|
)
|
||
Total
|
|
$
|
973
|
|
|
$
|
989
|
|
|
|
|
|
|
||||
Redemptions/Maturities
(3)
|
|
|
|
|
||||
Variable interest entities
|
|
$
|
32
|
|
|
$
|
30
|
|
electronotes
®
|
|
62
|
|
|
335
|
|
||
1998 Series D
|
|
50
|
|
|
—
|
|
||
1999 Series A
|
|
38
|
|
|
—
|
|
||
2005 Series B
|
|
1,000
|
|
|
—
|
|
||
2009 Series A
|
|
3
|
|
|
4
|
|
||
2009 Series B
|
|
27
|
|
|
26
|
|
||
Total
|
|
$
|
1,212
|
|
|
$
|
395
|
|
Short-Term Debt
At September 30
|
||||||||||||||
CUSIP or Other Identifier
|
|
Maturity
|
|
Call/(Put) Date
|
|
Coupon Rate
|
|
2015
|
|
2014
|
||||
Short-term debt, net of discounts
|
|
|
|
|
|
|
|
$
|
1,034
|
|
|
$
|
596
|
|
Current maturities of long-term debt of variable interest entities issued at par
|
|
|
|
|
|
|
|
33
|
|
|
32
|
|
||
Current maturities of power bonds issued at par
|
|
|
|
|
|
|
|
|
|
|
||||
880591EE8
|
|
11/15/2015
|
|
|
|
2.250%
|
|
2
|
|
|
3
|
|
||
880591EF5
|
|
12/15/2015
|
|
|
|
3.770%
|
|
27
|
|
|
26
|
|
||
880591DY5
|
|
6/15/2015
|
|
|
|
4.375%
|
|
—
|
|
|
1,000
|
|
||
88059TEL1
|
|
11/15/2015
|
|
|
|
2.650%
|
|
3
|
|
|
3
|
|
||
Total current maturities of power bonds issued at par
|
|
|
|
|
|
|
|
32
|
|
|
1,032
|
|
||
Total current debt outstanding, net
|
|
|
|
|
|
|
|
$
|
1,099
|
|
|
$
|
1,660
|
|
Long-Term Debt
(1)
At September 30
|
|||||||||||||||||
CUSIP or Other Identifier
|
|
Maturity
|
|
Coupon
Rate
|
|
Call Date
|
|
2015 Par
|
|
2014 Par
|
|
Stock Exchange Listings
|
|||||
electronotes
®(2)
|
|
05/15/2020 -
02/15/2043
|
|
2.375 - 4.375%
|
|
2/15/2015 -
02/15/2018
|
|
$
|
325
|
|
|
$
|
387
|
|
|
None
|
|
880591EE8
(3)
|
|
11/15/2015
|
|
2.250%
|
|
|
|
—
|
|
|
2
|
|
|
None
|
|||
880591DS8
|
|
12/15/2016
|
|
4.875%
|
|
|
|
524
|
|
|
524
|
|
|
New York
|
|||
880591EA6
|
|
7/18/2017
|
|
5.500%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York, Luxembourg
|
|||
880591CU4
|
|
12/15/2017
|
|
6.250%
|
|
|
|
650
|
|
|
650
|
|
|
New York
|
|||
880591EC2
|
|
4/1/2018
|
|
4.500%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York, Luxembourg
|
|||
880591EQ1
|
|
10/15/2018
|
|
1.750%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591EL2
|
|
2/15/2021
|
|
3.875%
|
|
|
|
1,500
|
|
|
1,500
|
|
|
New York
|
|||
880591DC3
|
|
6/7/2021
|
|
5.805%
|
(4)
|
|
|
303
|
|
|
324
|
|
|
New York, Luxembourg
|
|||
880591EN8
|
|
8/15/2022
|
|
1.875%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591ER9
|
|
9/15/2024
|
|
2.875%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591CJ9
|
|
11/1/2025
|
|
6.750%
|
|
|
|
1,350
|
|
|
1,350
|
|
|
New York, Hong Kong, Luxembourg, Singapore
|
|||
880591300
(5)
|
|
6/1/2028
|
|
3.550%
|
|
|
|
274
|
|
|
324
|
|
|
New York
|
|||
880591409
(5)
|
|
5/1/2029
|
|
3.360%
|
|
|
|
232
|
|
|
270
|
|
|
New York
|
|||
880591DM1
|
|
5/1/2030
|
|
7.125%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York, Luxembourg
|
|||
880591DP4
|
|
6/7/2032
|
|
6.587%
|
(4)
|
|
|
378
|
|
|
406
|
|
|
New York, Luxembourg
|
|||
880591DV1
|
|
7/15/2033
|
|
4.700%
|
|
|
|
472
|
|
|
472
|
|
|
New York, Luxembourg
|
|||
880591EF5
(3)
|
|
6/15/2034
|
|
3.770%
|
|
|
|
360
|
|
|
388
|
|
|
None
|
|||
880591DX7
|
|
6/15/2035
|
|
4.650%
|
|
|
|
436
|
|
|
436
|
|
|
New York
|
|||
880591CK6
|
|
4/1/2036
|
|
5.980%
|
|
|
|
121
|
|
|
121
|
|
|
New York
|
|||
880591CS9
|
|
4/1/2036
|
|
5.880%
|
|
|
|
1,500
|
|
|
1,500
|
|
|
New York
|
|||
880591CP5
|
|
1/15/2038
|
|
6.150%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591ED0
|
|
6/15/2038
|
|
5.500%
|
|
|
|
500
|
|
|
500
|
|
|
New York
|
|||
880591EH1
|
|
9/15/2039
|
|
5.250%
|
|
|
|
2,000
|
|
|
2,000
|
|
|
New York
|
|||
880591EP3
|
|
12/15/2042
|
|
3.500%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591DU3
|
|
6/7/2043
|
|
4.962%
|
(4)
|
|
|
227
|
|
|
243
|
|
|
New York, Luxembourg
|
|||
880591CF7
|
|
7/15/2045
|
|
6.235%
|
|
7/15/2020
|
|
140
|
|
|
140
|
|
|
New York
|
|||
880591EB4
|
|
1/15/2048
|
|
4.875%
|
|
|
|
500
|
|
|
500
|
|
|
New York, Luxembourg
|
|||
880591DZ2
|
|
4/1/2056
|
|
5.375%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
|||
880591EJ7
|
|
9/15/2060
|
|
4.625
|
%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York
|
||
880591ES7
|
|
9/15/2065
|
|
4.250%
|
|
|
|
1,000
|
|
|
—
|
|
|
New York
|
|||
Subtotal
|
|
|
|
|
|
|
|
22,792
|
|
|
22,037
|
|
|
|
Unamortized discounts, premiums, and other
|
|
|
|
|
|
|
|
(108
|
)
|
|
(89
|
)
|
|
|
|||
Total long-term outstanding power bonds, net
|
|
|
|
|
|
|
|
22,684
|
|
|
21,948
|
|
|
|
|||
Long-term debt of variable interest entities
|
|
|
|
|
|
|
|
1,246
|
|
|
1,279
|
|
|
|
|||
Total long-term debt, net
|
|
|
|
|
|
|
|
$
|
23,930
|
|
|
$
|
23,227
|
|
|
|
Maturities Due in the Year Ending September 30
|
|||||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term power bonds and long-term debt of variable interest entities including current maturities
(1)
|
$
|
65
|
|
|
$
|
1,590
|
|
|
$
|
1,718
|
|
|
$
|
1,070
|
|
|
$
|
70
|
|
|
$
|
19,611
|
|
|
$
|
24,124
|
|
Short-term debt, net of discounts
|
1,034
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,034
|
|
Summary of Long-Term Credit Facilities
At September 30, 2015
(in billions)
|
|||||||||||||||
Maturity Date
|
Facility Limit
|
|
Letters of Credit Outstanding
|
|
Cash Borrowings
|
|
Availability
|
||||||||
February 2020
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
June 2020
|
1.0
|
|
|
0.3
|
|
|
—
|
|
|
0.7
|
|
||||
September 2020
|
1.0
|
|
|
0.3
|
|
|
—
|
|
|
0.7
|
|
||||
Total
|
$
|
2.5
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 2)
Amount of Gain (Loss) Reclassified from OCI to Interest Expense
For the years ended September 30
|
||||||||
|
|
|
||||||
Derivatives in Cash Flow Hedging Relationship
|
|
2015
|
|
2014
|
||||
Currency swaps
|
|
$
|
(65
|
)
|
|
$
|
2
|
|
Summary of Derivative Instruments That Do Not Receive Hedge Accounting Treatment
Amount of Gain (Loss) Recognized in Income on Derivatives
(1)
For the years ended September 30
|
||||||||||||
|
|
|
|
|
|
|
||||||
Derivative Type
|
|
Objective of Derivative
|
|
Accounting for Derivative Instrument
|
|
2015
|
|
2014
|
||||
Interest rate swaps
|
|
To fix short-term debt variable rate to a fixed rate (interest rate risk)
|
|
MtM gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in interest expense when payments are made or received on the swap settlement dates.
(2)
|
|
$
|
(114
|
)
|
|
$
|
(114
|
)
|
|
|
|
|
|
|
|
|
|
||||
Commodity contract derivatives
|
|
To protect against fluctuations in market prices of purchased coal or natural gas (price risk)
|
|
MtM gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses due to contract settlements are recognized in fuel expense as incurred
.
|
|
—
|
|
|
(64
|
)
|
||
|
|
|
|
|
|
|
|
|
||||
Commodity derivatives
under FTP
|
|
To protect against fluctuations in market prices of purchased commodities (price risk)
|
|
MtM gains and losses are recorded as regulatory assets or liabilities. Realized gains and losses are recognized in fuel expense or purchased power expense when the related commodity is used in production.
|
|
(98
|
)
|
|
(43
|
)
|
Fair Values of TVA Derivatives
At September 30
|
|||||||||||
|
2015
|
|
2014
|
||||||||
Derivatives that Receive Hedge Accounting Treatment:
|
|||||||||||
|
Balance
|
|
Balance Sheet Presentation
|
|
Balance
|
|
Balance Sheet Presentation
|
||||
Currency swaps
|
|
|
|
|
|
|
|
||||
£200 million Sterling
|
$
|
(41
|
)
|
|
Other long-term liabilities
|
|
$
|
(15
|
)
|
|
Other long-term liabilities
|
£250 million Sterling
|
25
|
|
|
Other long-term assets
|
|
56
|
|
|
Other long-term assets
|
||
£150 million Sterling
|
(6
|
)
|
|
Other long-term liabilities
|
|
8
|
|
|
Other long-term assets
|
||
|
|
|
|
|
|
|
|
||||
Derivatives that Do Not Receive Hedge Accounting Treatment:
|
|||||||||||
|
Balance
|
|
Balance Sheet Presentation
|
|
Balance
|
|
Balance Sheet Presentation
|
||||
Interest rate swaps
|
|
|
|
|
|
|
|
||||
$1.0 billion notional
|
(1,177
|
)
|
|
Other long-term liabilities
|
|
(987
|
)
|
|
Other long-term liabilities
|
||
$476 million notional
|
(438
|
)
|
|
Other long-term liabilities
|
|
(349
|
)
|
|
Other long-term liabilities
|
||
$42 million notional
|
(12
|
)
|
|
Other long-term liabilities
|
|
(12
|
)
|
|
Other long-term liabilities
|
||
Commodity contract derivatives
|
(97
|
)
|
|
Other long-term assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(81)
|
|
(96
|
)
|
|
Other current assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(80)
|
||
FTP
|
|
|
|
|
|
|
|
||||
Derivatives under FTP
(1)
|
(116
|
)
|
|
Other current assets $(89); Other long-term liabilities $(10); Accounts payable and accrued liabilities $(17)
|
|
(103
|
)
|
|
Other current assets $(69); Other long-term liabilities $(14); Accounts payable and accrued liabilities $(20)
|
Currency Swaps Outstanding
At September 30, 2014
|
||||||
Effective Date of Currency Swap Contract
|
|
Associated TVA Bond Issues Currency Exposure
|
|
Expiration Date of Swap
|
|
Overall Effective
Cost to TVA
|
1999
|
|
£200 million
|
|
2021
|
|
5.81%
|
2001
|
|
£250 million
|
|
2032
|
|
6.59%
|
2003
|
|
£150 million
|
|
2043
|
|
4.96%
|
Commodity Contract Derivatives
At September 30
|
|||||||||||||||
|
2015
|
|
2014
|
||||||||||||
|
Number of
Contracts
|
|
Notional Amount
|
|
Fair Value (MtM)
|
|
Number of Contracts
|
|
Notional Amount
|
|
Fair Value
(
MtM
)
|
||||
Coal contract derivatives
|
14
|
|
19 million tons
|
|
$
|
(98
|
)
|
|
24
|
|
31 million tons
|
|
$
|
(86
|
)
|
Natural gas contract derivatives
|
33
|
|
134 million mmBtu
|
|
$
|
1
|
|
|
46
|
|
62 million mmBtu
|
|
$
|
(10
|
)
|
Derivatives under Financial Trading Program
At September 30
|
|||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Notional Amount
|
|
Fair Value (MtM)
(in millions)
|
|
Notional Amount
|
|
Fair Value (MtM)
(in millions)
|
||||||
Natural gas (in mmBtu)
|
|
|
|
|
|
|
|
||||||
Swap contracts
|
51,495,000
|
|
|
$
|
(116
|
)
|
|
102,227,500
|
|
|
$
|
(103
|
)
|
|
|
|
|
|
|
|
|
Financial Trading Program Realized Gains (Losses)
For the years ended September 30
|
||||||||
|
|
|
|
|
||||
Decrease (increase) in purchased power expense
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Natural gas
|
|
$
|
(20
|
)
|
|
$
|
(11
|
)
|
|
As of September 30, 2015
|
||||||||||
|
Gross Amounts of Recognized Assets/Liabilities
|
|
Gross Amounts Offset in the Balance Sheet
(1)
|
|
Net Amounts of Assets/Liabilities Presented in the Balance Sheet
(2)
|
||||||
Assets
|
|
|
|
|
|
||||||
Currency swap(s)
(3),(4)
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
Commodity derivatives under FTP
|
49
|
|
|
(49
|
)
|
|
—
|
|
|||
Total derivatives subject to master netting or similar arrangement
|
74
|
|
|
(49
|
)
|
|
25
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
1
|
|
|
—
|
|
|
1
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
75
|
|
|
$
|
(49
|
)
|
|
$
|
26
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Currency swap(s)
(4)
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Interest rate swaps
(4)
|
1,627
|
|
|
—
|
|
|
1,627
|
|
|||
Commodity derivatives under FTP
|
165
|
|
|
(138
|
)
|
|
27
|
|
|||
Total derivatives subject to master netting or similar arrangement
|
1,839
|
|
|
(138
|
)
|
|
1,701
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
98
|
|
|
—
|
|
|
98
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
1,937
|
|
|
$
|
(138
|
)
|
|
$
|
1,799
|
|
|
|
|
|
|
|
||||||
|
As of September 30, 2014
|
||||||||||
|
Gross Amounts of Recognized Assets/Liabilities
|
|
Gross Amounts Offset in the Balance Sheet
(1)
|
|
Net Amounts of Assets/Liabilities Presented in the Balance Sheet
(2)
|
||||||
Assets
|
|
|
|
|
|
||||||
Currency swap(s)
|
$
|
64
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
Commodity derivatives under FTP
|
51
|
|
|
(51
|
)
|
|
—
|
|
|||
Total derivatives subject to master netting or similar arrangement
|
115
|
|
|
(115
|
)
|
|
—
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
1
|
|
|
—
|
|
|
1
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
116
|
|
|
$
|
(115
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Currency swap(s)
(4)
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Interest rate swaps
(4)
|
1,348
|
|
|
—
|
|
|
1,348
|
|
|||
Commodity derivatives under FTP
|
154
|
|
|
(120
|
)
|
|
34
|
|
|||
Total derivatives subject to master netting or similar arrangement
|
1,517
|
|
|
(120
|
)
|
|
1,397
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
97
|
|
|
—
|
|
|
97
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
1,614
|
|
|
$
|
(120
|
)
|
|
$
|
1,494
|
|
•
|
If TVA remains a majority-owned U.S. government entity but
Standard & Poor's Financial Services, LLC ("S&P")
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.
|
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.
|
Fair Value Measurements
At September 30, 2015
|
|||||||||||||||
Assets
|
Quoted Prices in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166
|
|
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government corporations and
agencies
|
203
|
|
|
31
|
|
|
—
|
|
|
234
|
|
||||
Corporate debt securities
|
—
|
|
|
225
|
|
|
—
|
|
|
225
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Collateralized debt obligations
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||
Institutional mutual funds
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||
Forward debt securities contracts
|
—
|
|
|
(59
|
)
|
|
—
|
|
|
(59
|
)
|
||||
Private partnerships measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||
Commingled funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,061
|
|
||||
Total investments
|
460
|
|
|
250
|
|
|
—
|
|
|
2,011
|
|
||||
Currency swap(s)
(2)
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Commodity contract derivatives
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Swap contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
460
|
|
|
$
|
275
|
|
|
$
|
1
|
|
|
$
|
2,037
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
Quoted Prices in Active Markets for Identical Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Currency swap(s)
(2)
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Interest rate swaps
|
—
|
|
|
1,627
|
|
|
—
|
|
|
1,627
|
|
||||
Commodity contract derivatives
|
—
|
|
|
—
|
|
|
98
|
|
|
98
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Swap contracts
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
—
|
|
|
$
|
1,701
|
|
|
$
|
98
|
|
|
$
|
1,799
|
|
Fair Value Measurements
At September 30, 2014
|
|||||||||||||||
Assets
|
Quoted Prices in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
162
|
|
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government corporations and
agencies
|
46
|
|
|
36
|
|
|
—
|
|
|
82
|
|
||||
Corporate debt securities
|
—
|
|
|
290
|
|
|
—
|
|
|
290
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Collateralized debt obligations
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||
Institutional mutual funds
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||
Forward debt securities contracts
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Private partnerships measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
||||
Commingled funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,079
|
|
||||
Total investments
|
309
|
|
|
379
|
|
|
—
|
|
|
1,981
|
|
||||
Currency swap(s)
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity contract derivatives
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Swap contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
309
|
|
|
$
|
379
|
|
|
$
|
1
|
|
|
$
|
1,982
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
Quoted Prices in Active Markets for Identical Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Currency swap(s)
(2)
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Interest rate swaps
|
—
|
|
|
1,348
|
|
|
—
|
|
|
1,348
|
|
||||
Commodity contract derivatives
|
—
|
|
|
—
|
|
|
97
|
|
|
97
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|||||||
Swap contracts
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
—
|
|
|
$
|
1,397
|
|
|
$
|
97
|
|
|
$
|
1,494
|
|
Estimated Values of Financial Instruments Not Recorded at Fair Value
At September 30
|
|||||||||||||||||
|
|
|
2015
|
|
2014
|
||||||||||||
|
Valuation Classification
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
EnergyRight
®
receivables (including current portion)
|
Level 2
|
|
$
|
156
|
|
|
$
|
162
|
|
|
$
|
156
|
|
|
$
|
166
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans and other long-term receivables, net (including current portion)
|
Level 2
|
|
$
|
129
|
|
|
$
|
117
|
|
|
$
|
92
|
|
|
$
|
81
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EnergyRight
®
purchase obligation (including current portion)
|
Level 2
|
|
$
|
185
|
|
|
$
|
208
|
|
|
$
|
190
|
|
|
$
|
215
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Unfunded loan commitments
|
Level 2
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Membership interests of variable interest entity subject to mandatory redemption (including current portion)
|
Level 2
|
|
$
|
37
|
|
|
$
|
47
|
|
|
$
|
39
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term outstanding power bonds (including current maturities), net
|
Level 2
|
|
$
|
22,716
|
|
|
$
|
25,468
|
|
|
$
|
22,980
|
|
|
$
|
26,889
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt of variable interest entities (including current maturities)
|
Level 2
|
|
$
|
1,279
|
|
|
$
|
1,407
|
|
|
$
|
1,311
|
|
|
$
|
1,425
|
|
Summary of Proprietary Capital Activity
At or for the years ended September 30
|
|||||||||||||||
|
2015
|
|
2014
|
||||||||||||
Appropriation Investment
|
Power Program
|
|
Nonpower
Programs
|
|
Power Program
|
|
Nonpower
Programs
|
||||||||
Balance at beginning of year
|
$
|
258
|
|
|
$
|
4,351
|
|
|
$
|
268
|
|
|
$
|
4,351
|
|
Return of power program appropriation investment
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Balance at end of year
|
258
|
|
|
4,351
|
|
|
258
|
|
|
4,351
|
|
||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of year
|
5,240
|
|
|
(3,750
|
)
|
|
4,767
|
|
|
(3,742
|
)
|
||||
Net income (expense) for year
|
1,122
|
|
|
(11
|
)
|
|
477
|
|
|
(8
|
)
|
||||
Return on power program appropriation investment
|
(5
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Balance at end of year
|
6,357
|
|
|
(3,761
|
)
|
|
5,240
|
|
|
(3,750
|
)
|
||||
Net proprietary capital at September 30
|
$
|
6,615
|
|
|
$
|
590
|
|
|
$
|
5,498
|
|
|
$
|
601
|
|
•
|
Original Benefit Structure.
The pension benefit for a member participating in the Original Benefit Structure is based on the member’s creditable service, the member’s average monthly salary for the highest
three
consecutive years of eligible compensation, and a pension factor based on the member’s age and years of service, less a Social Security offset. In addition, TVA makes matching contributions of
25 cents
on the dollar (up to
1.5 percent
of eligible compensation) to the 401(k) plan for members participating in the Original Benefit Structure.
|
•
|
Cash Balance Benefit Structure.
The pension benefit for a member participating in the Cash Balance Benefit Structure is based on credits accumulated in the member’s account and the member’s age. A member’s
|
•
|
Employer Automatic Benefit Structure.
Members participating in the Employer Automatic Benefit Structure receive an automatic, non-elective contribution by TVA to the 401(k) plan equal to
4.5 percent
of eligible compensation and matching contributions by TVA to the 401(k) plan of
75 cents
on the dollar (up to
4.5 percent
of eligible compensation).
|
Obligations and Funded Status
For the years ended September 30
|
|||||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
12,265
|
|
|
$
|
11,471
|
|
|
$
|
652
|
|
|
$
|
656
|
|
Service cost
|
130
|
|
|
130
|
|
|
16
|
|
|
18
|
|
||||
Interest cost
|
540
|
|
|
558
|
|
|
29
|
|
|
32
|
|
||||
Plan participants’ contributions
|
25
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Collections
(1)
|
—
|
|
|
—
|
|
|
94
|
|
|
93
|
|
||||
Amendments
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
556
|
|
|
722
|
|
|
3
|
|
|
(21
|
)
|
||||
Net transfers from variable fund/401(k) plan
|
11
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
Expenses paid
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(697
|
)
|
|
(653
|
)
|
|
(137
|
)
|
|
(126
|
)
|
||||
Benefit obligation at end of year
|
12,824
|
|
|
12,265
|
|
|
657
|
|
|
652
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of net plan assets at beginning of year
|
7,507
|
|
|
7,221
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
(325
|
)
|
|
648
|
|
|
—
|
|
|
—
|
|
||||
Plan participants’ contributions
|
25
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Collections
(1)
|
—
|
|
|
—
|
|
|
94
|
|
|
93
|
|
||||
Net transfers from variable fund/401(k) plan
|
11
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
(2)
|
282
|
|
|
256
|
|
|
43
|
|
|
33
|
|
||||
Expenses paid
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(697
|
)
|
|
(653
|
)
|
|
(137
|
)
|
|
(126
|
)
|
||||
Fair value of net plan assets at end of year
|
6,797
|
|
|
7,507
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Funded status
|
$
|
(6,027
|
)
|
|
$
|
(4,758
|
)
|
|
$
|
(657
|
)
|
|
$
|
(652
|
)
|
Post-Retirement Benefit Costs Deferred as Regulatory Assets
At September 30
|
|||||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Unrecognized prior service credit
|
$
|
(158
|
)
|
|
$
|
(180
|
)
|
|
$
|
(33
|
)
|
|
$
|
(39
|
)
|
Unrecognized net loss
|
5,355
|
|
|
4,337
|
|
|
173
|
|
|
179
|
|
||||
Amount capitalized due to actions of regulator
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total regulatory assets
|
$
|
5,425
|
|
|
$
|
4,157
|
|
|
$
|
140
|
|
|
$
|
140
|
|
Components of Net Periodic Benefit Cost
For the years ended September 30
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Service cost
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
154
|
|
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
24
|
|
Interest cost
|
540
|
|
|
558
|
|
|
468
|
|
|
29
|
|
|
32
|
|
|
31
|
|
||||||
Expected return on plan assets
|
(437
|
)
|
|
(435
|
)
|
|
(428
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
(21
|
)
|
|
(21
|
)
|
|
(22
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Recognized net actuarial loss
|
299
|
|
|
285
|
|
|
377
|
|
|
9
|
|
|
11
|
|
|
25
|
|
||||||
Total net periodic benefit cost as actuarially determined
|
511
|
|
|
517
|
|
|
549
|
|
|
48
|
|
|
55
|
|
|
74
|
|
||||||
Amount capitalized due to actions of regulator
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net period benefit cost
|
$
|
283
|
|
|
$
|
517
|
|
|
$
|
549
|
|
|
$
|
48
|
|
|
$
|
55
|
|
|
$
|
74
|
|
Actuarial Assumptions
At September 30
|
|||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Assumptions utilized to determine benefit obligations at September 30
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.50
|
%
|
|
4.45
|
%
|
|
4.65
|
%
|
|
4.50
|
%
|
Rate of compensation increase
|
5.70
|
%
|
|
5.70
|
%
|
|
N/A
|
|
|
N/A
|
|
Initial health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
7.00
|
%
|
|
7.50
|
%
|
Ultimate health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
5.00
|
%
|
|
5.00
|
%
|
Ultimate trend rate is reached in year beginning
|
N/A
|
|
|
N/A
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
||||
Assumptions utilized to determine net periodic benefit cost for the years ended September 30
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
4.45
|
%
|
|
5.00
|
%
|
|
4.50
|
%
|
|
5.05
|
%
|
Expected return on plan assets
|
7.00
|
%
|
|
7.25
|
%
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
5.70
|
%
|
|
5.72
|
%
|
|
N/A
|
|
|
N/A
|
|
Initial health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
7.50
|
%
|
|
8.00
|
%
|
Ultimate health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
5.00
|
%
|
|
5.00
|
%
|
Ultimate trend rate is reached in year beginning
|
N/A
|
|
|
N/A
|
|
|
2019
|
|
|
2019
|
|
Asset Holdings of TVARS
At September 30
|
|||||||||
|
|
|
|
Plan Assets at September 30
|
|||||
Asset Category
|
|
Target Allocation
|
|
2015
|
|
2014
|
|||
Global equity
|
|
32
|
%
|
|
38
|
%
|
|
43
|
%
|
Private equity
|
|
10
|
%
|
|
5
|
%
|
|
5
|
%
|
Low volatility global public equity
|
|
5
|
%
|
|
5
|
%
|
|
1
|
%
|
Cash
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Core fixed income
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
Long-term core fixed income
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
Investment grade credit
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
International emerging markets fixed income
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
High yield fixed income
|
|
5
|
%
|
|
6
|
%
|
|
6
|
%
|
Global TIPS
|
|
5
|
%
|
|
6
|
%
|
|
5
|
%
|
Private real assets
|
|
10
|
%
|
|
9
|
%
|
|
7
|
%
|
Commodities
|
|
5
|
%
|
|
4
|
%
|
|
4
|
%
|
MLPs
|
|
5
|
%
|
|
4
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
TVA Retirement System
At September 30, 2015
|
|||||||||||||||
|
Total
(1) (2)
|
|
Quoted Prices in Active Markets for Identical
Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
1,650
|
|
|
$
|
1,649
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||||||
Preferred securities
|
36
|
|
|
2
|
|
|
34
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate debt securities
|
1,161
|
|
|
—
|
|
|
1,149
|
|
|
12
|
|
||||
Residential mortgage-backed securities
|
151
|
|
|
—
|
|
|
138
|
|
|
13
|
|
||||
Debt securities issued by U.S. Treasury
|
362
|
|
|
362
|
|
|
—
|
|
|
—
|
|
||||
Debt securities issued by foreign governments
|
294
|
|
|
—
|
|
|
281
|
|
|
13
|
|
||||
Asset-backed securities
|
156
|
|
|
—
|
|
|
116
|
|
|
40
|
|
||||
Debt securities issued by state/local governments
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
43
|
|
|
—
|
|
|
32
|
|
|
11
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Commingled Funds measured at net asset value
(3)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity
|
642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Debt
|
654
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity
|
244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Blended
|
206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Institutional mutual funds
|
26
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||
Cash equivalents and other short-term investments
|
318
|
|
|
—
|
|
|
318
|
|
|
—
|
|
||||
Certificates of deposit
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Private equity measured at net asset value
(3)
|
389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Private real estate measured at net asset value
(3)
|
556
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral
|
34
|
|
|
21
|
|
|
13
|
|
|
—
|
|
||||
Securities lending commingled funds
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchased options
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Foreign currency forward receivable
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
$
|
6,964
|
|
|
$
|
2,060
|
|
|
$
|
2,122
|
|
|
$
|
91
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Futures
|
17
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Foreign currency forward payable
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Written options
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Interest rate swaps
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Credit default swaps
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Liabilities
|
$
|
34
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
—
|
|
TVA Retirement System
At September 30, 2014
|
|||||||||||||||
|
Total
(1) (2)
|
|
Quoted Prices in Active Markets for Identical
Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
1,669
|
|
|
$
|
1,668
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||||||
Preferred securities
|
37
|
|
|
5
|
|
|
32
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate debt securities
|
1,326
|
|
|
—
|
|
|
1,304
|
|
|
22
|
|
||||
Residential mortgage-backed securities
|
204
|
|
|
—
|
|
|
201
|
|
|
3
|
|
||||
Debt securities issued by U.S. Treasury
|
93
|
|
|
93
|
|
|
—
|
|
|
—
|
|
||||
Debt securities issued by foreign governments
|
225
|
|
|
—
|
|
|
218
|
|
|
7
|
|
||||
Asset-backed securities
|
176
|
|
|
—
|
|
|
147
|
|
|
29
|
|
||||
Debt securities issued by state/local governments
|
30
|
|
|
—
|
|
|
29
|
|
|
1
|
|
||||
Commercial mortgage-backed securities
|
23
|
|
|
—
|
|
|
20
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Commingled funds measured at net asset value
(3)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity
|
1,106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Debt
|
661
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodities
|
332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Blended
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Institutional mutual funds
|
28
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Cash equivalents and other short-term investments
|
464
|
|
|
—
|
|
|
464
|
|
|
—
|
|
||||
Certificates of deposit
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Private equity measured at net asset value
(3)
|
481
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Private real estate measured at net asset value
(3)
|
435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral
|
35
|
|
|
10
|
|
|
25
|
|
|
—
|
|
||||
Securities lending commingled funds
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Purchased options
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Foreign currency forward receivable
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
$
|
7,600
|
|
|
$
|
1,804
|
|
|
$
|
2,487
|
|
|
$
|
66
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Futures
|
11
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Foreign currency forward payable
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Written options
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Liabilities
|
$
|
26
|
|
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Estimated Future Benefits Payments
At September 30, 2015
|
|||||||
|
Pension
Benefits
|
|
Other Post-Retirement Benefits
|
||||
2016
|
$
|
741
|
|
|
$
|
39
|
|
2017
|
744
|
|
|
39
|
|
||
2018
|
748
|
|
|
39
|
|
||
2019
|
755
|
|
|
39
|
|
||
2020
|
764
|
|
|
39
|
|
||
2021 - 2025
|
3,903
|
|
|
178
|
|
Commitments and Contingencies
Payments due in the years ending September 30
|
||||||||||||||||||||||||||||
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Membership interests of variable interest entity subject to mandatory redemption
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
26
|
|
|
37
|
|
|||||||
Lease obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital
|
|
13
|
|
|
13
|
|
|
13
|
|
|
12
|
|
|
12
|
|
|
156
|
|
|
219
|
|
|||||||
Non-cancelable operating
|
|
44
|
|
|
42
|
|
|
32
|
|
|
25
|
|
|
25
|
|
|
38
|
|
|
206
|
|
|||||||
Purchase obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Power
|
|
217
|
|
|
226
|
|
|
229
|
|
|
235
|
|
|
241
|
|
|
3,124
|
|
|
4,272
|
|
|||||||
Fuel
|
|
1,282
|
|
|
711
|
|
|
635
|
|
|
508
|
|
|
335
|
|
|
1,448
|
|
|
4,919
|
|
|||||||
Other
|
|
262
|
|
|
198
|
|
|
193
|
|
|
189
|
|
|
173
|
|
|
1,830
|
|
|
2,845
|
|
|||||||
Unfunded loan commitments
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Payments on other financings
|
|
104
|
|
|
104
|
|
|
104
|
|
|
96
|
|
|
73
|
|
|
232
|
|
|
713
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
|
$
|
1,929
|
|
|
$
|
1,296
|
|
|
$
|
1,208
|
|
|
$
|
1,067
|
|
|
$
|
862
|
|
|
$
|
6,854
|
|
|
$
|
13,216
|
|
Energy Prepayment Obligations
Payments due in the years ending September 30
|
||||||||||||||||||||||||||||
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Energy Prepayment Obligations
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
310
|
|
•
|
Petition to Immediately Suspend the Operating Licenses of GE BWR Mark I Units Pending the Full NRC Review With Independent Expert and Public Participation From Affected Emergency Planning Zone Communities
|
•
|
Petition Pursuant to 10 CFR 2.206 - Demand For Information Regarding Compliance with 10 CFR 50, Appendix A, General Design Criterion 44, Cooling Water, and 10 CFR 50.49, Environmental Qualification of Electric Equipment Important to Safety for Nuclear Power Plants
|
•
|
The salary for Mr. Pardee will increase from $645,000 to $664,350. Additionally, Mr. Pardee was awarded a LTP grant of $835,000 effective October 1, 2015, which will vest on September 30, 2018. Mr. Pardee also received a LTR grant of $200,000 effective October 1, 2015, which will vest and pay out in 1/3 increments annually over three years.
|
•
|
The salary for Mr. Thomas will increase from $575,000 to $592,250. Additionally, Mr. Thomas was awarded a LTP grant of $715,000 effective October 1, 2015, which will vest on September 30, 2018. Mr. Thomas also received a LTR grant of $200,000 effective October 1, 2015, which will vest and pay out in 1/3 increments annually over three years.
|
•
|
The salary for Mr. Grimes will increase from $555,000 to $600,000. Additionally, Mr. Grimes was awarded a LTP grant of $750,000 effective October 1, 2015, which will vest on September 30, 2018. Mr. Grimes also received a LTR grant of $260,000 effective October 1, 2015, which will vest and pay out in 1/3 increments annually over three years.
|
•
|
The salary for Mr. Skaggs will increase from $445,000 to $471,700. Additionally, Mr. Skaggs was awarded a LTP grant of $600,000 effective October 1, 2015, which will vest on September 30, 2018. Mr. Skaggs also received a LTR grant of $150,000 effective October 1, 2015, which will vest and pay out in 1/3 increments annually over three years.
|
Directors
|
Age
|
Year Current Term Began
|
Year Term Expires
|
|
Joe H. Ritch, Chair
|
65
|
2013
|
2016
|
|
Richard C. Howorth
|
64
|
2011
|
2015
|
(1)
|
Marilyn A. Brown
|
66
|
2013
|
2017
|
|
V. Lynn Evans
|
62
|
2013
|
2017
|
|
C. Peter Mahurin
|
77
|
2013
|
2016
|
|
Michael R. McWherter
|
59
|
2013
|
2016
|
|
Virginia T. Lodge
|
65
|
2014
|
2019
|
|
Ronald A. Walter
|
66
|
2014
|
2019
|
|
Eric M. Satz
|
46
|
2015
|
2018
|
|
Executive Officers
|
Title
|
Age
|
Employment Commenced
|
William D. Johnson
|
President and Chief Executive Officer
|
61
|
2013
|
Joseph P. Grimes, Jr.
|
Executive Vice President and Chief Nuclear Officer
|
59
|
2013
|
Charles G. Pardee
|
Executive Vice President and Chief Operating Officer
|
55
|
2013
|
Sherry A. Quirk
|
Executive Vice President and General Counsel
|
61
|
2015
|
John M. Thomas, III
|
Executive Vice President and Chief Financial Officer
|
52
|
2005
|
Van M. Wardlaw
|
Executive Vice President and Chief External Relations Officer
|
55
|
1982
|
Katherine J. Black
|
Senior Vice President of Human Resources and Communications
|
60
|
1986
|
Ricardo G. Pérez
|
Senior Vice President, Shared Services
|
56
|
2013
|
Michael D. Skaggs
|
Senior Vice President, Watts Bar Operations and Construction
|
55
|
1994
|
Diane T. Wear
|
Vice President and Controller (Principal Accounting Officer)
|
47
|
2008
|
•
|
Finance, Rates, and Portfolio Committee
|
•
|
External Relations Committee
|
•
|
People and Performance Committee
|
•
|
Nuclear Oversight Committee
|
•
|
William D. Johnson, President and
Chief Executive Officer ("CEO")
;
|
•
|
Charles G. Pardee, Executive Vice President and
Chief Operating Officer ("COO")
;
|
•
|
John M. Thomas, III, Executive Vice President and
Chief Financial Officer ("CFO")
;
|
•
|
Joseph P. Grimes, Jr., Executive Vice President and
Chief Nuclear Officer ("CNO")
; and
|
•
|
Michael D. Skaggs, Senior Vice President, Watts Bar Operations and Construction.
|
•
|
Fulfilled the three-year goal to sustainably reduce $500 million in operating and maintenance ("O&M") expense;
|
•
|
Improved performance of TVA's nuclear, coal-fired, and gas-fired generation units; and
|
•
|
Helped to retain and attract 76,200 jobs and over $7.8 billion in capital investment to the TVA service area.
|
•
|
The salary for Mr. Pardee increased from $620,000 to $645,000, and Mr. Pardee was granted an award of $200,000 under the LTRIP on January 1, 2015. Mr. Pardee will be vested in and receive payment of the full award on December 31, 2017, as long as he remains employed with TVA on that date.
|
•
|
The salary for Mr. Thomas increased from $550,000 to $575,000, and Mr. Thomas was granted two awards under the LTRIP. Each award was $200,000 and was granted on January 1, 2015. Mr. Thomas will be vested in and receive payment of the full awards under the grants on December 31, 2016, and December 31, 2017, respectively, as long as he remains employed with TVA on those dates. Mr. Johnson also approved a retention incentive arrangement under which Mr. Thomas will be eligible to receive $200,000 on December 31, 2015, as long as he remains employed with TVA on that date, performs all duties in a highly effective manner, and maintains satisfactory performance through the end of the retention period.
|
•
|
The salary for Mr. Grimes increased from $535,000 to $555,000, and Mr. Grimes was granted an award of $150,000 under the LTRIP on January 1, 2015. Mr. Grimes will be vested in and receive payment of the full award on December 31, 2017, as long as he remains employed with TVA on that date.
|
•
|
The salary for Mr. Skaggs increased from $431,600 to $445,000, and Mr. Skaggs was granted an award of $150,000 under the LTRIP on January 1, 2015. Mr. Skaggs will be vested in and receive payment of the full award on December 31, 2017, as long as he remains employed with TVA on that date.
|
•
|
Provide market-based, competitive compensation levels so TVA can attract, retain, and motivate highly competent employees. Total direct compensation generally targets the 50th percentile of the relevant labor market, although some positions, such as those requiring certain nuclear expertise, are targeted up to the 75th percentile based on labor market scarcity and other issues.
|
•
|
Reward employees for performance. A substantial portion of executive pay, including pay for the Named Executive Officers, is tied to performance improvement. As illustrated in the charts below, at least half (and in some cases almost two-thirds) of each Named Executive Officer’s direct compensation opportunity is delivered through performance-based incentive programs.
|
65 Percent Of Compensation Is At Risk
|
51 Percent Of Compensation Is At Risk
|
•
|
Align the organization’s short- and long-term goals and objectives with compensation by providing a mix of salary and performance-based annual and long-term incentives.
|
•
|
Align performance and productivity improvement at all levels by setting consistent performance goals and objectives for all levels of the organization.
|
•
|
Compensation will be based on an annual survey of prevailing compensation for similar positions in private industry, including engineering and electric utility companies, publicly-owned electric utilities, and federal, state, and local governments; and
|
•
|
Compensation will take into account education, experience, level of responsibility, geographic differences, and retention and recruitment needs.
|
•
|
The TVA Board will annually approve all compensation (such as salary and any other pay, benefits, incentives, or other form of remuneration) for all managers and technical personnel who report directly to the CEO (including any adjustment(s) to compensation);
|
•
|
On the recommendation of the CEO, the TVA Board will approve the salaries of employees whose salaries would be in excess of Level IV of the Executive Schedule of the United States Government ($158,700 in 2015); and
|
•
|
The CEO will determine the salary and benefits of employees whose annual salary is not greater than Level IV of the Executive Schedule ($158,700 in 2015).
|
•
|
The TVA Board has approved for the direct reports to the CEO compensation ranges of 80 percent to 110 percent of the targeted total direct compensation for comparable positions. These targeted levels of total direct compensation are consistent with the Compensation Plan and with external benchmarking sources. The TVA Board has also authorized the CEO to set or adjust compensation for present or future direct reports within such compensation ranges, as well as to approve the parameters under which such executives may participate in certain supplemental benefit plans, such as TVA’s
Supplemental Executive Retirement Plan ("SERP")
, provided that the CEO may not finally set or adjust such compensation until the TVA Board members have been notified of the proposed compensation and given the opportunity to ask the Committee, or the full TVA Board, to review the proposed compensation before it becomes effective.
|
•
|
The TVA Board has delegated to the Chair of the TVA Board, in consultation with the Committee and with input from individual members of the TVA Board, the authority to evaluate and rate the CEO’s performance during the year, and the authority to approve any payout to the CEO under the EAIP, based on, among other things, the CEO's evaluated performance during the year.
|
•
|
The TVA Board has delegated to the CEO, in consultation with the Committee and with input from individual members of the TVA Board, the authority to approve the individual performance goals for the CEO's direct reports and the authority to evaluate and rate the performance of the CEO's direct reports during the year.
|
•
|
Test target compensation level and incentive opportunity competitiveness; and
|
•
|
Determine appropriate target compensation levels and incentive opportunities to maintain the desired degree of market competitiveness.
|
AES Corp.
|
Duke Energy Corp.
|
Pacific Gas and Electric Co.
|
American Electric Power Co., Inc.
|
Edison International
|
PPL Corp.
|
Calpine
|
Entergy Corp.
|
Public Service Enterprise Group Inc.
|
CenterPoint Energy, Inc.
|
Exelon Corp.
|
Sempra Energy
|
CMS Energy Corp.
|
FirstEnergy Corp.
|
Southern Company
|
Consolidated Edison, Inc.
|
IPR-GDF Suez North America
|
Xcel Energy Inc.
|
Dominion Resources, Inc.
|
NextEra Energy, Inc.
|
|
DTE Energy Co.
|
Northeast Utilities
|
|
EAIP
Amount
|
=
|
Annual
Salary
|
X
|
Annual Target
Incentive
Opportunity
|
X
|
Percent of
Opportunity
Achieved
(0% to 150%)
|
X
|
Corporate
Multiplier
(0 to 1.00)
|
X
|
Subjective Individual Assessment
|
TVA 2015 Organization Scorecards
|
||||||||
|
|
|
|
|
|
Goals
|
||
Performance Measure
|
Corporate Scorecard (Johnson, Thomas)
|
Operations Scorecard (Pardee)
|
Nuclear Operations Scorecard (Grimes)
|
Nuclear Construction Scorecard (Skaggs)
|
Results Achieved
|
Threshold
(50%)
|
Target
(100%)
|
Maximum
(150%)
|
|
|
|
|
|
|
|
|
|
Corporate Total Spending
(1)
($ in millions)
|
40%
|
|
|
|
$792
|
$856
|
$837
|
$817
|
|
|
|
|
|
|
|
|
|
Nuclear Unit Capability Factor ("UCF") (%)
(2)
|
20%
|
25%
|
25%
|
20%
|
91.1%
|
89.8%
|
90.8%
|
92.0%
|
|
|
|
|
|
|
|
|
|
Coal Seasonal Equivalent Forced Outage Rate (%)
(3)
|
15%
|
20%
|
15%
|
15%
|
4.8%
|
6.4%
|
5.9%
|
5.0%
|
|
|
|
|
|
|
|
|
|
Combined Cycle Seasonal Equivalent Forced Outage Rate (%)
(4)
|
5%
|
10%
|
5%
|
5%
|
0.6%
|
3.3%
|
2.1%
|
1.1%
|
|
|
|
|
|
|
|
|
|
Load Not Served (System Minutes)
(5)
|
10%
|
15%
|
10%
|
10%
|
3.8
|
5.8
|
4.4
|
3.7
|
|
|
|
|
|
|
|
|
|
Reportable Environmental Events
(6)
|
10%
|
10%
|
10%
|
10%
|
22
|
17
|
12
|
9
|
|
|
|
|
|
|
|
|
|
Operations Total Spending
(7)
($ in millions)
|
|
20%
|
20%
|
|
$3,918
|
$4,079
|
$3,960
|
$3,840
|
|
|
|
|
|
|
|
|
|
Nuclear Operations Equipment Reliability Index
(8)
|
|
|
15%
|
|
88
|
86
|
89
|
92
|
|
|
|
|
|
|
|
|
|
Nuclear Construction Total Spending
(9)
($ in millions)
|
|
|
|
20%
|
$662
|
$634
|
$610
|
$585
|
|
|
|
|
|
|
|
|
|
Watts Bar Construction Milestones
(10)
|
|
|
|
20%
|
12
|
12
|
13
|
15
|
|
|
|
|
|
|
|
|
|
Total
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
•
|
Safety performance which demands improvement;
|
•
|
Strong financial performance driven by O&M efficiency; and
|
•
|
Improved performance of TVA's nuclear, coal-fired, and gas-fired generation units.
|
TVA Corporate Multiplier
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
Results Achieved
|
|
Target
|
|
Safety - Recordable Incident Rate (RIR)
(1)
|
|
0.72
|
|
0.00
|
|
|
|
|
|
|
|
Total Financing Obligations (TFO) ($ Billions)
(2)
|
|
$25.8
|
|
$27.1
|
|
|
|
|
|
|
|
Operating Cash Flow ($ Millions)
(3)
|
|
$3,315
|
|
$2,482
|
|
|
|
|
|
|
|
Net Income ($ Millions)
(4)
|
|
$1,111
|
|
$594
|
|
|
|
|
|
|
|
Jobs Created and Retained
(5)
|
|
76,220
|
|
52,000
|
|
|
|
|
|
|
|
Board Level Significant Events
(6)
|
|
0
|
|
0
|
|
|
|
|
|
|
|
Corporate Multiplier
|
|
0.95
|
|
|
|
•
|
Mr. Johnson, in consultation with the Committee and with input from individual members of the TVA Board, subjectively evaluated the performance of Mr. Pardee and Mr. Thomas as his direct reports during 2015. Mr. Johnson, with input from individual members of the TVA Board, determined that these awards should be paid as set forth above for his direct reports.
|
•
|
Mr. Johnson and Mr. Pardee, TVA's Executive Vice President and Chief Operating Officer (to whom Mr. Grimes reported), subjectively evaluated Mr. Grimes’ performance during 2015. Based on this review, Mr. Johnson and Mr. Pardee determined that Mr. Grimes' award should be paid as set forth above.
|
•
|
Mr. Johnson, Mr. Pardee, and Mr. Grimes, TVA's Executive Vice President and Chief Nuclear Officer (to whom Mr. Skaggs reported), subjectively evaluated Mr. Skaggs’ performance during 2015. Based on this review, Mr. Johnson, Mr. Pardee, and Mr. Grimes determined that Mr. Skaggs' award should be paid as set forth above.
|
2015 EAIP Payouts
|
||||||||||||
Named Executive Officers
|
|
Salary
|
|
Target EAIP
Incentive
Opportunity
(% of Salary)
|
|
Target
EAIP Payout
|
|
Results After Application of Corporate Multiplier and Narrowing of Range
|
|
Individual Performance Adjustment
|
|
Actual EAIP Payment
|
William D. Johnson
|
|
$995,000
|
|
110%
|
|
$1,094,500
|
|
117%
|
|
1.00
|
|
$1,280,565
|
Charles G. Pardee
|
|
$645,000
|
|
80%
|
|
$516,000
|
|
112%
|
|
1.00
|
|
$577,920
|
John M. Thomas, III
|
|
$575,000
|
|
80%
|
|
$460,000
|
|
117%
|
|
1.00
|
|
$538,200
|
Joseph P. Grimes, Jr.
|
|
$555,000
|
|
80%
|
|
$444,000
|
|
107%
|
|
1.00
|
|
$475,080
|
Michael D. Skaggs
|
|
$445,000
|
|
70%
|
|
$311,500
|
|
107%
|
|
1.00
|
|
$333,305
|
|
|
|
•
|
Using enterprise-wide performance criteria that are directly aligned with TVA's mission;
|
•
|
Using a “cumulative” performance approach to measure performance achieved over a three-year period with a new three-year performance cycle beginning each year;
|
•
|
Using a potential payment range of 50 percent to 150 percent of target incentive opportunity to enable awards that are commensurate with performance achievements; and
|
•
|
Targeting award opportunities for each performance cycle at levels that approximate median levels of competitiveness with TVA's peer group and incorporating the Committee's policy that (i) approximately 70 to 80 percent of each executive's total long-term incentive opportunity be performance-based (under the ELTIP) and (ii) approximately 20 to 30 percent of each executive's total long-term incentive opportunity be retention oriented under the
Long-Term Deferred Compensation Plan ("LTDCP")
or under the
Long-Term Retention Incentive Plan ("LTRIP")
as described below under the heading "Long-Term Retention Arrangements."
|
ELTIP
Payout
|
=
|
Salary
|
X
|
Target ELTIP Incentive
Opportunity
|
X
|
Percent of Opportunity
Achieved
|
•
|
Wholesale Rate Excluding Fuel;
|
•
|
Load Not Served (the product of the percentage of total load-not-served multiplied by the number of minutes in the period); and
|
•
|
External Measures (including external nuclear performance indicators, stakeholder survey, media tone, and customer loyalty).
|
•
|
The threshold goal was TVA’s performance improvement to a 4.69 percent gap relative to the top-quartile of the ELTIP Rates Comparison Group's performance. The ELTIP Rates Comparison Group includes Ameren, American Electric Power, Dominion Resources, Duke Energy, PPL, Entergy, NextEra, and Southern Company.
|
•
|
The target goal was TVA’s performance improvement to a 4.60 percent gap relative to the top-quartile of the ELTIP Rates Comparison Group's performance.
|
•
|
The maximum goal was TVA's performance improvement to a 4.51 percent gap relative to the top-quartile of the ELTIP Rates Comparison Group's performance.
|
External Measures
|
|||||
|
|
|
|
||
Performance Measure
|
Weight
|
Results Achieved
|
Threshold
|
Target
|
Maximum
|
Nuclear Performance Index
|
25%
|
86.5
|
83.0
|
86.0
|
89.0
|
Media Tone
|
25%
|
92.5
|
80.5
|
84.5
|
85.5
|
Stakeholder Survey
|
10%
|
81.8
|
81.3
|
81.8
|
82.3
|
Customer Loyalty
|
10%
|
60.0
|
48.5
|
49.5
|
50.5
|
Board Level Significant Events
|
30%
|
0.0
|
Two Unfavorable
|
Zero
|
Two Favorable
|
Composite score for external measures
|
|
88.9
|
77.9
|
85.8
|
92.9
|
•
|
Acknowledgment of overall good performance during the performance cycle;
|
•
|
Fulfilling TVA's three-year goal to sustainably reduce $500 million in O&M expense; and
|
•
|
Wholesale rate negatively affected by the cold winter.
|
2013 - 2015 Performance Cycle ELTIP Payouts
|
|
||||||
Named Executive Officers
|
Salary
|
Target ELTIP Incentive Opportunity
|
Target ELTIP Payout
|
Adjusted Percent of Opportunity Achieved
|
ELTIP Payout
|
||
William D. Johnson
|
$995,000
|
175%
|
$1,741,250
|
|
113.0%
|
$1,967,613
|
|
Charles G. Pardee
|
$645,000
|
125%
|
$649,515
|
(1)
|
113.0%
|
$733,952
|
(1)
|
John M. Thomas, III
|
$575,000
|
120%
|
$690,000
|
|
113.0%
|
$779,700
|
|
Joseph P. Grimes, Jr.
|
$555,000
|
110%
|
$423,931
|
(2)
|
113.0%
|
$479,042
|
(2)
|
Michael D. Skaggs
|
$445,000
|
90%
|
$400,500
|
|
113.0%
|
$452,565
|
|
Performance Measure
|
Weight
|
Threshold
(50%)
|
Target
(100%)
|
Maximum
(150%)
|
Wholesale Rate Excluding Fuel
(1)
|
40%
|
Target + 2%
|
2014 Business Plan (2014-2016 Rate)
|
Target - 2%
|
Load Not Served
(2)
|
30%
|
(99.999% reliability)
|
Top Quartile
|
Top Decile
|
External Measures
(3)
|
30%
|
78.8
|
86.7
|
93.9
|
|
Performance Measure
|
Weight
|
Threshold
(50%)
|
Target
(100%)
|
Maximum
(150%)
|
Wholesale Rate Excluding Fuel
(1)
|
40%
|
Target + 2%
|
2014 & 2015 Business Plan (2015-2017 Rate)
|
Target - 2%
|
Load Not Served
(2)
|
30%
|
(99.999% reliability or better)
|
Top Quartile
|
Better than top quartile
|
External Measures
(3)
|
30%
|
79.8
|
87.7
|
94.9
|
|
CEO Peer Group Compensation Comparison
|
||||||||||
Compensation Component
|
TVA CEO (Johnson)Compensation Earned for 2015
|
|
TVA CEO (Johnson)Compensation Opportunity for 2015
|
|
2015 Towers Watson Chief Executive Officer Median Market Data
(TVA Peer Group)
(1)
|
|||||
|
|
|
|
|
|
|||||
Base Salary
|
$995,000
|
|
$995,000
|
|
$1,180,000
|
|||||
|
|
|
|
|
|
|
||||
Total Annual Incentive
|
128.7
|
%
|
(2
|
)
|
110
|
%
|
(2
|
)
|
112.5
|
%
|
|
|
|
(target)
|
|
|
(target)
|
|
|||
Total Cash Compensation
|
$2,275,565
|
|
$2,089,500
|
|
$2,510,000
|
|||||
|
|
|
|
|
|
|||||
Total Long-Term Incentive Compensation
|
197.8
|
%
|
(3)
|
|
175
|
%
|
(3)
|
|
450
|
%
|
|
|
|
|
(target)
|
|
|
(target)
|
|
||
Total Direct Compensation
|
$5,318,178
|
(4)
|
|
$4,905,750
|
(4)
|
|
$7,820,000
|
•
|
Original Benefit Structure ("OBS") for employees covered under the plan prior to January 1, 1996, with a pension based on a final average pay formula.
|
•
|
Cash Balance Benefit Structure ("CBBS") for employees first hired on or after January 1, 1996, and prior to July 1, 2014, with a pension based on an account that receives pay credits equal to 6 percent of compensation plus interest.
|
•
|
Employer Automatic Benefit Structure ("EABS") for employees who are first hired on or after July 1, 2014, or who are rehired on or after July 1, 2014, but who were previously not vested or who previously received their pension benefit in a lump-sum distribution. EABS members are eligible for a defined contribution retirement benefit in the 401(k) plan only and are not eligible to participate in the defined benefit plan.
|
•
|
For OBS members, TVA provides matching contributions of 25 cents on every dollar up to 1.5 percent of eligible compensation.
|
•
|
For CBBS members, TVA provides matching contributions of 75 cents on every dollar up to 4.5 percent of eligible compensation.
|
•
|
For EABS members, TVA provides an automatic, non-elective contribution of 4.5 percent of eligible compensation and matching contributions of 75 cents on every dollar up to 4.5 percent of eligible compensation.
|
•
|
Provide a competitive retirement benefit level that cannot be delivered solely through TVA's qualified retirement plans due to IRS limitations.
|
•
|
Provide a benefit level (as a percentage replacement of pre-retirement pay) that is more comparable to that of employees who are not subject to the IRS limitations.
|
•
|
Mr. Johnson, upon appointment as CEO, has an arrangement approved by the TVA Board under which he would be eligible to receive an additional performance award of up to $325,000 per year based on the evaluation of his performance, which may be subjective and/or based on the achievement of defined short- and/or long-term goals. Under the arrangement, the TVA Board delegated to its Chair, in consultation with the Committee and with input from individual members of the TVA Board, the authority to set and approve any goals and the periods of performance for any such goals, evaluate the performance of Mr. Johnson subjectively and/or with respect to any goals, and approve any awards to Mr. Johnson. The Chair’s evaluation confirmed that Mr. Johnson delivered strong results in his third year as CEO. Based on Mr. Johnson's demonstrated leadership and accomplishments during 2015, the Chair approved an award to Mr. Johnson of $325,000 for 2015 under the performance arrangement.
|
•
|
Mr. Skaggs operates under a CEO-approved arrangement that will provide Mr. Skaggs a performance award in the amount of $300,000 if the Watts Bar Nuclear Unit 2 project is completed on or ahead of schedule and on or under budget as defined by the “Watts Bar Unit 2 Project Completion Plan,” as long as Mr. Skaggs remains in a position
|
•
|
Mr. Pardee has a CEO-approved arrangement that provides additional awards of up to $200,000 per year based on the evaluation of performance that may be subjective and/or based on achievement of defined short-term and/or long-term goals. Under this arrangement, the President and CEO may set and approve goals and the periods of performance for such goals, evaluate performance subjectively and/or with respect to any goals, and approve any award. Mr. Johnson confirmed that Mr. Pardee delivered strong results in 2015. Based on this analysis, Mr. Johnson approved an award to Mr. Pardee of $200,000 for 2015 under the performance arrangement.
|
Summary Compensation Table
|
|||||||||||||||||||||||||||||
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity Incentive Plan Compensation
($)
(1)
|
|
Change in Pension Value and
Nonqualified Deferred Compensation Earnings
($)
(2)
|
|
All Other Compensation
($)
(3)
|
|
Total
($)
|
|||||||||||||||||
William D. Johnson
|
2015
|
|
$
|
998,827
|
|
—
|
|
—
|
|
—
|
|
|
$
|
3,573,178
|
|
|
|
$
|
1,068,264
|
|
|
|
$
|
761,700
|
|
|
$
|
6,401,969
|
|
President and Chief
|
2014
|
|
$
|
950,000
|
|
—
|
|
—
|
|
—
|
|
|
$
|
2,918,500
|
|
(4)
|
|
$
|
435,830
|
|
(5)
|
|
$
|
311,475
|
|
|
$
|
4,615,805
|
|
Executive Officer
|
2013
|
|
$
|
712,500
|
|
—
|
|
—
|
|
—
|
|
|
$
|
2,992,386
|
|
(6)
|
|
$
|
2,063,395
|
|
(7)
|
|
$
|
461,250
|
|
|
$
|
6,229,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Charles G. Pardee
|
2015
|
|
$
|
647,481
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,511,872
|
|
|
|
$
|
415,889
|
|
|
|
$
|
400,000
|
|
|
$
|
2,975,242
|
|
Executive Vice President
|
2014
|
|
$
|
609,039
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,164,875
|
|
(8)
|
|
$
|
424,644
|
|
(9)
|
|
$
|
211,475
|
|
|
$
|
2,410,033
|
|
and Chief Operating Officer
|
2013
|
|
$
|
—
|
|
—
|
|
—
|
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
John M. Thomas, III
|
2015
|
|
$
|
577,212
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,317,900
|
|
|
|
$
|
306,185
|
|
|
|
$
|
411,700
|
|
|
$
|
2,612,997
|
|
Executive Vice President
|
2014
|
|
$
|
539,038
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,201,200
|
|
(10)
|
|
$
|
349,173
|
|
(11)
|
|
$
|
211,475
|
|
|
$
|
2,300,886
|
|
and Chief Financial Officer
|
2013
|
|
$
|
522,000
|
|
—
|
|
—
|
|
—
|
|
|
$
|
1,285,648
|
|
(12)
|
|
$
|
161,119
|
|
(13)
|
|
$
|
172,500
|
|
|
$
|
2,141,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Joseph P. Grimes, Jr.
|
2015
|
|
$
|
557,135
|
|
—
|
|
—
|
|
—
|
|
|
$
|
954,122
|
|
|
|
$
|
268,994
|
|
|
|
$
|
311,700
|
|
|
$
|
2,091,951
|
|
Executive Vice President
|
2014
|
|
$
|
535,152
|
|
—
|
|
—
|
|
—
|
|
|
$
|
729,317
|
|
(14)
|
|
$
|
16,907
|
|
(15)
|
|
$
|
311,475
|
|
|
$
|
1,592,851
|
|
and Chief Nuclear Officer
|
2013
|
|
$
|
—
|
|
—
|
|
—
|
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Michael D. Skaggs
|
2015
|
|
$
|
446,712
|
|
—
|
|
—
|
|
—
|
|
|
$
|
785,870
|
|
|
|
$
|
503,274
|
|
|
|
$
|
311,700
|
|
|
$
|
2,047,556
|
|
Senior Vice President,
|
2014
|
|
$
|
425,535
|
|
—
|
|
—
|
|
—
|
|
|
$
|
744,942
|
|
(16)
|
|
$
|
732,916
|
|
(17)
|
|
$
|
186,475
|
|
|
$
|
2,089,868
|
|
Watts Bar Nuclear Operations and Construction
|
2013
|
|
$
|
416,596
|
|
—
|
|
—
|
|
—
|
|
|
$
|
785,703
|
|
(18)
|
|
$
|
212,967
|
|
(19)
|
|
$
|
197,500
|
|
|
$
|
1,612,766
|
|
Non-Equity Incentive Plan Compensation
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
William D. Johnson
|
|
Charles G. Pardee
|
|
John M. Thomas, III
|
|
Joseph P. Grimes, Jr.
|
|
Michael D. Skaggs
|
|
|
|
|
|
|
|
|
|
|
EAIP
|
$1,280,565
|
|
$577,920
|
|
$538,200
|
|
$475,080
|
|
$333,305
|
ELTIP
|
$1,967,613
|
|
$733,952
|
|
$779,700
|
|
$479,042
|
|
$452,565
|
PIA
|
$325,000
|
|
$200,000
|
|
$0
|
|
$0
|
|
$0
|
Total
|
$3,573,178
|
|
$1,511,872
|
|
$1,317,900
|
|
$954,122
|
|
$785,870
|
All Other Compensation
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
William D. Johnson
|
|
Charles G. Pardee
|
|
John M. Thomas, III
|
|
Joseph P. Grimes, Jr.
|
|
Michael D. Skaggs
|
|
|
|
|
|
|
|
|
|
|
LTDCP Credit
|
$300,000
|
|
$200,000
|
|
$0
|
|
$150,000
|
|
$150,000
|
LTRIP Credit
|
$450,000
|
|
$200,000
|
|
$400,000
|
|
$150,000
|
|
$150,000
|
401(k) Matching Contribution
|
$11,700
|
|
$0
|
|
$11,700
|
|
$11,700
|
|
$11,700
|
Other
|
$0
|
|
$0
|
|
$0
|
|
$0
|
|
$0
|
Total
|
$761,700
|
|
$400,000
|
|
$411,700
|
|
$311,700
|
|
$311,700
|
Long-Term Retention Agreements
|
||||
Name
|
Plan
|
Amount
|
Date of Grant or Credit
|
Vesting Date
|
|
|
|
|
|
William D. Johnson
|
LTDCP
|
$300,000
(1)
|
January 1, 2013
|
September 30, 2013
|
|
LTDCP
|
$300,000
(1)
|
October 1, 2013
|
September 30, 2014
|
|
LTDCP
|
$300,000
(1)
|
October 1, 2014
|
September 30, 2015
|
|
LTRIP
|
$450,000
(2)
|
November 10, 2014
|
December 31, 2016
|
|
|
|
|
|
Charles G. Pardee
|
LTDCP
|
$200,000
(3)
|
May 1, 2013
|
December 31, 2016
|
|
LTDCP
|
$200,000
(3)
|
January 1, 2014
|
December 31, 2016
|
|
LTDCP
|
$200,000
(3)
|
January 1, 2015
|
December 31, 2016
|
|
LTDCP
|
$200,000
(3)
|
January 1, 2016
|
December 31, 2016
|
|
LTRIP
|
$200,000
(2)
|
January 1, 2015
|
December 31, 2017
|
|
|
|
|
|
John M. Thomas, III
|
LTDCP
|
$50,000
(4)
|
October 1, 2010
|
September 30, 2013
|
|
LTDCP
|
$100,000
(4)
|
October 1, 2011
|
September 30, 2013
|
|
LTDCP
|
$100,000
(4)
|
October 1, 2012
|
September 30, 2013
|
|
LTDCP
|
$50,000
(4)
|
May 1, 2013
|
April 30, 2014
|
|
LTDCP
|
$200,000
(4)
|
March 1, 2014
|
December 31, 2014
|
|
RIA
|
$200,000
(5)
|
January 1, 2015
|
December 31, 2015
|
|
LTRIP
|
$200,000
(2)
|
January 1, 2015
|
December 31, 2016
|
|
LTRIP
|
$200,000
(2)
|
January 1, 2015
|
December 31, 2017
|
|
|
|
|
|
Joseph P. Grimes, Jr.
|
LTDCP
|
$250,000
(6)
|
September 1, 2013
|
December 31, 2015
|
|
LTDCP
|
$150,000
(6)
|
January 1, 2014
|
December 31, 2015
|
|
LTDCP
|
$150,000
(6)
|
January 1, 2015
|
December 31, 2015
|
|
LTRIP
|
$150,000
(2)
|
June 1, 2014
|
December 31, 2016
|
|
LTRIP
|
$150,000
(2)
|
January 1, 2015
|
December 31, 2017
|
|
|
|
|
|
Michael D. Skaggs
|
LTDCP
|
$100,000
(7)
|
October 1, 2012
|
September 30, 2014
|
|
LTDCP
|
$100,000
(7)
|
October 1, 2013
|
September 30, 2014
|
|
LTDCP
|
$50,000
(8)
|
March 1, 2013
|
December 31, 2016
|
|
LTDCP
|
$50,000
(8)
|
January 1, 2014
|
December 31, 2016
|
|
LTDCP
|
$150,000
(8)
|
January 1, 2015
|
December 31, 2016
|
|
LTDCP
|
$150,000
(8)
|
January 1, 2016
|
December 31, 2016
|
|
LTRIP
|
$150,000
(2)
|
January 1, 2015
|
December 31, 2017
|
Pension Benefits Table
|
|||||
Name
|
Plan Name
|
Number of
Years of Credited Service
(1)
(#)
|
|
Present Value of Accumulated Benefit
($)
|
Payments During Last Year
($)
|
|
|
|
|
|
|
William D. Johnson
|
Qualified Plan – CBBS
|
2.750
|
(2)
|
$52,129
|
$0
|
|
Non-Qualified – SERP Tier 1
|
7.750
|
(2)
|
$3,515,360
|
$0
|
Charles G. Pardee
|
Qualified Plan – CBBS
|
2.417
|
(3)
|
$54,720
|
$0
|
|
Non-Qualified – SERP Tier 1
|
7.417
|
(3)
|
$1,439,976
|
$0
|
John M. Thomas, III
|
Qualified Plan – CBBS
|
9.833
|
|
$239,139
|
$0
|
|
Non-Qualified – SERP Tier 1
|
9.833
|
|
$1,651,614
|
$0
|
Joseph P. Grimes, Jr.
|
Qualified Plan – CBBS
|
2.083
|
|
$38,047
|
$0
|
|
Non-Qualified – SERP Tier 1
|
2.083
|
|
$270,156
|
$0
|
Michael D. Skaggs
|
Qualified Plan – CBBS
|
21.583
|
|
$490,746
|
$0
|
|
Non-Qualified – SERP Tier 1
|
21.583
|
|
$3,010,982
|
$0
|
Nonqualified Deferred Compensation Table
|
|
|||||||
Name
|
Executive
Contributions in
2015
($)
|
Registrant
Contributions in
2015
($)
|
|
Aggregate
Earnings in
2015
(1)
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
September 30 2015
(2)
($)
|
|
William D. Johnson
|
$0
|
$300,000
|
|
$6,028
|
$306,060
|
|
$305,994
|
|
Charles G. Pardee
|
$0
|
$200,000
|
|
$11,253
|
$0
|
|
$619,660
|
|
John M. Thomas, III
|
$0
|
$0
|
|
$1,070
|
$203,452
|
|
$0
|
|
Joseph P. Grimes, Jr.
|
$0
|
$150,000
|
|
$1,155
|
$0
|
|
$558,633
|
|
Michael D. Skaggs
|
$0
|
$150,000
|
|
$46,491
|
$0
|
|
$3,801,856
|
|
•
|
comprised solely of a right to payment of retirement benefits resulting from former employment or fiduciary relationship,
|
•
|
arising solely by virtue of cooperative membership or similar interest as a consumer in a distributor of TVA power, or
|
•
|
arising by virtue of ownership of publicly traded securities:
|
▪
|
of any single entity with a value of $25,000 or less, or
|
▪
|
of a parent entity with one or more subsidiaries covered by this Policy that collectively contribute to a proportionate owned value of the parent’s securities in an amount of $25,000 or less, or
|
▪
|
of a diversified mutual fund with a value of any amount, or
|
▪
|
of a sector mutual fund, exchange traded fund, or similar investment fund with a value of any amount, provided the fund is not primarily focused on the wholesale or retail generation, transmission, or sale of electricity in North America).
|
Principal Accountant Fees and Services
(in actual dollars)
|
|||||||||||||||||
Year
|
|
Principal Accountant
|
|
Audit Fees
(1)
|
|
Audit-Related Fees
|
|
All Other Fees
|
|
Total
|
|||||||
2015
|
|
Ernst & Young LLP
|
|
$
|
2,628,473
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,628,473
|
|
2014
|
|
Ernst & Young LLP
|
|
$
|
2,678,461
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,678,461
|
|
|
•
|
Bookkeeping or other services related to the accounting records or financial statements of TVA;
|
•
|
Financial information system design and implementation;
|
•
|
Appraisal or valuation services, fairness opinions, and contribution-in-kind reports;
|
•
|
Actuarial services;
|
•
|
Internal audit outsourcing services;
|
•
|
Management functions or human resources;
|
•
|
Broker or dealer, investment adviser, or investment banking services;
|
•
|
Legal services and expert services unrelated to the audit; and
|
•
|
Any other services that the Public Company Accounting Oversight Board determines, by regulation, are impermissible.
|
(1)
|
Consolidated Financial Statements. The following documents are provided in Item 8, Financial Statements and
|
10.10
|
Assumption Agreement Between TVA and Incapital LLC Dated as of February 29, 2008, Relating to the electronotes® Selling Agent Agreement Dated as of June 1, 2006, Among TVA, LaSalle Financial Services, Inc., A.G. Edwards & Sons, Inc., Citigroup Global Markets Inc., Edward D. Jones & Co., L.P., First Tennessee Bank National Association, J.J.B. Hilliard, W.L. Lyons, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, and Wachovia Securities, LLC (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 000-52313)
|
|
|
10.11
|
Commitment Agreement Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by reference to Exhibit 10.5 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.12
|
Power Contract Supplement No. 95 Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by reference to Exhibit 10.6 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.13
|
Void Walk Away Agreement Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated by reference to Exhibit 10.7 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.14
|
Power Contract Supplement No. 96 Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated by reference to Exhibit 10.8 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.15
|
Overview of TVA's September 26, 2003, Lease and Leaseback of Control, Monitoring, and Data Analysis Network with Respect to TVA's Transmission System in Tennessee, Kentucky, Georgia, and Mississippi (Incorporated by reference to Exhibit 10.9 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.16
|
Participation Agreement Dated as of September 22, 2003, Among (1) TVA, (2) NVG Network I Statutory Trust, (3) Wells Fargo Delaware Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Owner Trustee, (4) Wachovia Mortgage Corporation, (5) Wilmington Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Lease Indenture Trustee, and (6) Wilmington Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Pass Through Trustee (Incorporated by reference to Exhibit 10.10 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.17*
|
Network Lease Agreement Dated as of September 26, 2003, Between NVG Network I Statutory Trust, as Owner Lessor, and TVA, as Lessee (Incorporated by reference to Exhibit 10.11 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.18*
|
Head Lease Agreement Dated as of September 26, 2003, Between TVA, as Head Lessor, and NVG Network I Statutory Trust, as Head Lessee (Incorporated by reference to Exhibit 10.12 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.19*
|
Leasehold Security Agreement Dated as of September 26, 2003, Made by NVG Network I Statutory Trust to TVA (Incorporated by reference to Exhibit 10.13 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
10.20
|
Facility Lease-Purchase Agreement Dated as of January 17, 2012, Between John Sevier Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
|
|
|
10.21
|
Head Lease Agreement Dated as of January 17, 2012, Among the United States of America, TVA, and John Sevier Combined Cycle Generation LLC (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
|
|
|
10.22
|
Construction Management Agreement Dated as of January 17, 2012, Between John Sevier Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
|
|
|
10.23*
|
Asset Purchase Agreement Dated as of August 6, 2013, Between TVA and Seven States Southaven, LLC (Incorporated by reference to Exhibit 10.33 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
|
|
|
10.24
|
Facility Lease-Purchase Agreement Dated as of August 9, 2013, Between Southaven Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.32 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
|
|
|
10.25
|
Head Lease Agreement Dated as of August 9, 2013, Among the United States of America, TVA, and Southaven Combined Cycle Generation LLC (Incorporated by reference to Exhibit 10.35 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
|
|
|
10.26*
|
Federal Facilities Compliance Agreement Between the United States Environmental Protection Agency and TVA (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 000-52313)
|
|
|
10.27*
|
Consent Decree among Alabama, Kentucky, North Carolina, Tennessee, the Alabama Department of Environmental Management, the National Parks Conservation Association, Inc., the Sierra Club, Our Children's Earth Foundation, and TVA (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 000-52313)
|
|
|
10.28†
|
TVA Compensation Plan Approved by the TVA Board on May 31, 2007 (Incorporated by reference to Exhibit 99.3 to TVA's Current Report on Form 8-K filed on December 11, 2007, File No. 000-52313)
|
|
|
10.29†
|
Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
|
|
|
10.30†
|
Amendment Dated as of August 16, 2011, to Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Current Report on Form 8-K filed on August 22, 2011, File No. 000-52313)
|
|
|
10.31†
|
Amended and Restated Supplemental Executive Retirement Plan Effective as of May 1, 2015 (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, File No. 000-52313)
|
|
|
10.32†
|
Executive Annual Incentive Plan (Incorporated by reference to Exhibit 10.3 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
|
|
|
10.33†
|
Amended and Restated Executive Annual Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.1 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
|
|
|
10.34†
|
Executive Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.4 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
|
|
|
10.35†
|
Long-Term Deferred Compensation Plan (Incorporated by reference to Exhibit 10.5 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
|
|
|
10.36†
|
Deferred Compensation Plan (Incorporated by reference to Exhibit 10.2 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
|
|
|
10.37†
|
Long-Term Retention Incentive Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter March 31, 2014, File No. 000-52313)
|
|
|
10.38†
|
Long-Term Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.3 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
|
|
|
10.39†
|
Retention Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.2 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
|
|
|
10.40†
|
Offer Letter to William D. Johnson Approved as of November 1, 2012 (Incorporated by reference to Exhibit 99.1 to TVA's Current Report on Form 8-K filed on November 7, 2012, File No. 000-52313)
|
|
|
10.41†
|
Offer Letter to Charles Pardee Accepted as of March 14, 2013 (Incorporated by reference to Exhibit 10.1 to TVA's Current Report on Form 8-K filed on April 5, 2013, File No. 000-52313)
|
|
|
10.42†
|
Offer Letter to Joseph P. Grimes, Jr., Dated as of June 18, 2013 (Incorporated by reference to Exhibit 10.37 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
10.43†
|
Deferral Agreement Between TVA and William D. Johnson Dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.38 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
10.44†
|
Deferral Agreement Between TVA and John M. Thomas, III, Dated as of September 27, 2010 (Incorporated by reference to Exhibit 10.40 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 000-52313)
|
|
|
10.45†
|
Deferral Agreement Between TVA and John M. Thomas, III, Dated as of January 4, 2012 (Incorporated by reference to Exhibit 10.45 to TVA's Annual Report on Form 10-K for the year ended September 30, 2012, File No. 000-52313)
|
|
|
10.46†
|
Deferral Agreement Between TVA and John M. Thomas, III, Dated as of April 22, 2013 (Incorporated by reference to Exhibit 10.4 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, File No. 000-52313)
|
|
|
10.47†
|
Deferral Agreement Between TVA and John M. Thomas, III, Dated as of February 27, 2014 (Incorporated by reference to Exhibit 10.43 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
10.48†
|
Deferral Agreement Between TVA and Charles G. Pardee Dated as of April 23, 2013 (Incorporated by reference to Exhibit 10.44 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
10.49†
|
Deferral Agreement Between TVA and Joseph P. Grimes, Jr., Dated as of September 5, 2013 (Incorporated by reference to Exhibit 10.45 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
10.50†
|
Deferral Agreement Between TVA and Michael D. Skaggs Dated as of March 1, 2010 (Incorporated by reference to Exhibit 10.61 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
|
|
|
10.51†
|
Deferral Agreement Between TVA and Michael D. Skaggs Dated as of March 20, 2013 (Incorporated by reference to Exhibit 10.62 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
|
|
|
10.52†
|
Long-Term Retention Incentive Plan Award Notice for William D. Johnson for Award Granted as of November 10, 2014 (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.53†
|
Long-Term Retention Incentive Plan Award Notice for John M. Thomas, III, for First Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.54†
|
Long-Term Retention Incentive Plan Award Notice for John M. Thomas, III, for Second Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.55†
|
Long-Term Retention Incentive Plan Award Notice for Charles G. Pardee for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.4 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.56†
|
Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of June 1, 2014
|
|
|
10.57†
|
Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.5 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.58†
|
Long-Term Retention Incentive Plan Award Notice for Michael D. Skaggs for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.6 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
10.59†
|
Retention Incentive Arrangement Between TVA and John M. Thomas, III, Dated as of January 1, 2015 (Incorporated by reference to Exhibit 10.7 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
|
|
|
14.1
|
Disclosure and Financial Ethics Code (Incorporated by reference to Exhibit 14 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
|
|
|
Date:
|
November 20, 2015
|
|
TENNESSEE VALLEY AUTHORITY
|
|
|
|
(Registrant)
|
|
|
By:
|
/s/ William D. Johnson
|
|
|
|
William D. Johnson
|
|
|
|
President and Chief Executive Officer
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Signature
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Title
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Date
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/s/ William D. Johnson
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President and Chief Executive Officer
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November 20, 2015
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William D. Johnson
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(Principal Executive Officer)
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/s/ John M. Thomas, III
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Executive Vice President and
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November 20, 2015
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John M. Thomas, III
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Chief Financial Officer
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(Principal Financial Officer)
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/s/ Diane Wear
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Vice President and Controller
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November 20, 2015
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Diane Wear
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(Principal Accounting Officer)
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/s/ Joe H. Ritch
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Chair
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November 20, 2015
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Joe H. Ritch
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/s/ Marilyn A. Brown
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Director
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November 20, 2015
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Marilyn A. Brown
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/s/ V. Lynn Evans
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Director
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November 20, 2015
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V. Lynn Evans
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/s/ Richard C. Howorth
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Director
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November 20, 2015
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Richard C. Howorth
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/s/ Virginia T. Lodge
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Director
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November 20, 2015
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Virginia T. Lodge
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/s/ C. Peter Mahurin
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Director
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November 20, 2015
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C. Peter Mahurin
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/s/ Michael R McWherter
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Director
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November 20, 2015
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Michael R. McWherter
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/s/ Eric Satz
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Director
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November 20, 2015
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Eric Satz
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/s/ Ronald A. Walter
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Director
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November 20, 2015
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Ronald A. Walter
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10.10
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Assumption Agreement Between TVA and Incapital LLC Dated as of February 29, 2008, Relating to the electronotes® Selling Agent Agreement Dated as of June 1, 2006, Among TVA, LaSalle Financial Services, Inc., A.G. Edwards & Sons, Inc., Citigroup Global Markets Inc., Edward D. Jones & Co., L.P., First Tennessee Bank National Association, J.J.B. Hilliard, W.L. Lyons, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, and Wachovia Securities, LLC (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 000-52313)
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10.11
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Commitment Agreement Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by reference to Exhibit 10.5 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.12
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Power Contract Supplement No. 95 Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 19, 2003 (Incorporated by reference to Exhibit 10.6 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.13
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Void Walk Away Agreement Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated by reference to Exhibit 10.7 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.14
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Power Contract Supplement No. 96 Among Memphis Light, Gas and Water Division, the City of Memphis, Tennessee, and TVA Dated as of November 20, 2003 (Incorporated by reference to Exhibit 10.8 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.15
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Overview of TVA's September 26, 2003, Lease and Leaseback of Control, Monitoring, and Data Analysis Network with Respect to TVA's Transmission System in Tennessee, Kentucky, Georgia, and Mississippi (Incorporated by reference to Exhibit 10.9 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.16
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Participation Agreement Dated as of September 22, 2003, Among (1) TVA, (2) NVG Network I Statutory Trust, (3) Wells Fargo Delaware Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Owner Trustee, (4) Wachovia Mortgage Corporation, (5) Wilmington Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Lease Indenture Trustee, and (6) Wilmington Trust Company, Not in Its Individual Capacity, Except to the Extent Expressly Provided in the Participation Agreement, But as Pass Through Trustee (Incorporated by reference to Exhibit 10.10 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.17*
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Network Lease Agreement Dated as of September 26, 2003, Between NVG Network I Statutory Trust, as Owner Lessor, and TVA, as Lessee (Incorporated by reference to Exhibit 10.11 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.18*
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Head Lease Agreement Dated as of September 26, 2003, Between TVA, as Head Lessor, and NVG Network I Statutory Trust, as Head Lessee (Incorporated by reference to Exhibit 10.12 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.19*
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Leasehold Security Agreement Dated as of September 26, 2003, Made by NVG Network I Statutory Trust to TVA (Incorporated by reference to Exhibit 10.13 to TVA's Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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10.20
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Facility Lease-Purchase Agreement Dated as of January 17, 2012, Between John Sevier Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
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10.21
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Head Lease Agreement Dated as of January 17, 2012, Among the United States of America, TVA, and John Sevier Combined Cycle Generation LLC (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
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10.22
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Construction Management Agreement Dated as of January 17, 2012, Between John Sevier Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 000-52313)
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10.23*
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Asset Purchase Agreement Dated as of August 6, 2013, Between TVA and Seven States Southaven, LLC (Incorporated by reference to Exhibit 10.33 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
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10.24
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Facility Lease-Purchase Agreement Dated as of August 9, 2013, Between Southaven Combined Cycle Generation LLC and TVA (Incorporated by reference to Exhibit 10.32 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
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10.25
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Head Lease Agreement Dated as of August 9, 2013, Among the United States of America, TVA, and Southaven Combined Cycle Generation LLC (Incorporated by reference to Exhibit 10.35 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
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10.26*
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Federal Facilities Compliance Agreement Between the United States Environmental Protection Agency and TVA (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 000-52313)
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10.27*
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Consent Decree among Alabama, Kentucky, North Carolina, Tennessee, the Alabama Department of Environmental Management, the National Parks Conservation Association, Inc., the Sierra Club, Our Children's Earth Foundation, and TVA (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 000-52313)
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10.28†
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TVA Compensation Plan Approved by the TVA Board on May 31, 2007 (Incorporated by reference to Exhibit 99.3 to TVA's Current Report on Form 8-K filed on December 11, 2007, File No. 000-52313)
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10.29†
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Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
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10.30†
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Amendment Dated as of August 16, 2011, to Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Current Report on Form 8-K filed on August 22, 2011, File No. 000-52313)
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10.31†
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Amended and Restated Supplemental Executive Retirement Plan Effective as of May 1, 2015 (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, File No. 000-52313)
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10.32†
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Executive Annual Incentive Plan (Incorporated by reference to Exhibit 10.3 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
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10.33†
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Amended and Restated Executive Annual Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.1 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
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10.34†
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Executive Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.4 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
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10.35†
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Long-Term Deferred Compensation Plan (Incorporated by reference to Exhibit 10.5 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
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10.36†
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Deferred Compensation Plan (Incorporated by reference to Exhibit 10.2 to TVA’s Current Report on Form 8-K filed on January 6, 2009, File No. 000-52313)
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10.37†
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Long-Term Retention Incentive Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter March 31, 2014, File No. 000-52313)
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10.38†
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Long-Term Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.3 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
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10.39†
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Retention Incentive Plan Effective as of October 1, 2015 (Incorporated by reference to Exhibit 10.2 to TVA's Current Report on Form 8-K filed on October 1, 2015, File No. 000-52313)
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10.40†
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Offer Letter to William D. Johnson Approved as of November 1, 2012 (Incorporated by reference to Exhibit 99.1 to TVA's Current Report on Form 8-K filed on November 7, 2012, File No. 000-52313)
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10.41†
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Offer Letter to Charles Pardee Accepted as of March 14, 2013 (Incorporated by reference to Exhibit 10.1 to TVA's Current Report on Form 8-K filed on April 5, 2013, File No. 000-52313)
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10.42†
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Offer Letter to Joseph P. Grimes, Jr., Dated as of June 18, 2013 (Incorporated by reference to Exhibit 10.37 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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10.43†
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Deferral Agreement Between TVA and William D. Johnson Dated as of January 1, 2013 (Incorporated by reference to Exhibit 10.38 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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10.44†
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Deferral Agreement Between TVA and John M. Thomas, III, Dated as of September 27, 2010 (Incorporated by reference to Exhibit 10.40 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2010, File No. 000-52313)
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10.45†
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Deferral Agreement Between TVA and John M. Thomas, III, Dated as of January 4, 2012 (Incorporated by reference to Exhibit 10.45 to TVA's Annual Report on Form 10-K for the year ended September 30, 2012, File No. 000-52313)
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10.46†
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Deferral Agreement Between TVA and John M. Thomas, III, Dated as of April 22, 2013 (Incorporated by reference to Exhibit 10.4 to TVA's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, File No. 000-52313)
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10.47†
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Deferral Agreement Between TVA and John M. Thomas, III, Dated as of February 27, 2014 (Incorporated by reference to Exhibit 10.43 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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10.48†
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Deferral Agreement Between TVA and Charles G. Pardee Dated as of April 23, 2013 (Incorporated by reference to Exhibit 10.44 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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10.49†
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Deferral Agreement Between TVA and Joseph P. Grimes, Jr., Dated as of September 5, 2013 (Incorporated by reference to Exhibit 10.45 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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10.50†
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Deferral Agreement Between TVA and Michael D. Skaggs Dated as of March 1, 2010 (Incorporated by reference to Exhibit 10.61 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
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10.51†
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Deferral Agreement Between TVA and Michael D. Skaggs Dated as of March 20, 2013 (Incorporated by reference to Exhibit 10.62 to TVA's Annual Report on Form 10-K for the year ended September 30, 2013, File No. 000-52313)
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10.52†
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Long-Term Retention Incentive Plan Award Notice for William D. Johnson for Award Granted as of November 10, 2014 (Incorporated by reference to Exhibit 10.1 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.53†
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Long-Term Retention Incentive Plan Award Notice for John M. Thomas, III, for First Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.2 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.54†
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Long-Term Retention Incentive Plan Award Notice for John M. Thomas, III, for Second Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.3 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.55†
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Long-Term Retention Incentive Plan Award Notice for Charles G. Pardee for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.4 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.56†
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Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of June 1, 2014
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10.57†
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Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.5 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.58†
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Long-Term Retention Incentive Plan Award Notice for Michael D. Skaggs for Award Granted as of January 1, 2015 (Incorporated by reference to Exhibit 10.6 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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10.59†
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Retention Incentive Arrangement Between TVA and John M. Thomas, III, Dated as of January 1, 2015 (Incorporated by reference to Exhibit 10.7 to TVA's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, File No. 000-52313)
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14.1
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Disclosure and Financial Ethics Code (Incorporated by reference to Exhibit 14 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2006, File No. 000-52313)
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(a)
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The addressees of the Selling Agent Agreement are hereby amended as follows:
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(b)
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Section II(b) is amended by changing “Ralph E. Rodgers, Esq., Executive Vice President and General Counsel for the Company, or Michael L. Wills, Assistant General Counsel, Finance, for the Company” to “the General Counsel for the Company, or a duly authorized delegate of the General Counsel”.
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TENNESSEE VALLEY AUTHORITY
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By:
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/s/ Tammy W. Wilson
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Name: Tammy W. Wilson
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Title: Vice President and Treasurer
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INCAPITAL LLC
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By:
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/s/ Christopher O'Connor
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Name: Christopher O'Connor
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Title: Managing Director
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CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Adam D. Bordner
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Name: Adam D. Bordner
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Title: Vice President
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FTN FINANCIAL CAPITAL MARKETS
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By:
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/s/ Alan Gates
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Name: Alan Gates
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Title: Senior Vice President, Agency Trading
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J.J.B. HILLIARD, W.L. LYONS LLC
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By:
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/s/ Donald E. Merrifield
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Name: Donald E. Merrifield
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Title: Senior Vice President
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MORGAN STANLEY & CO. LLC
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By:
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/s/ Yurij Slyz
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Name: Yurij Slyz
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Title: Executive Director
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WELLS FARGO ADVISORS, LLC
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By:
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/s/ Kristin Maher
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Name: Kristin Maher
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Title: Senior Vice President
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4.1.
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Termination Prior to Normal Vesting Date
. Except as otherwise determined by the Board or Chief Executive Officer (“CEO”) or as otherwise provided in subsections 4.2 or 4.3 below, if prior to the Normal Vesting Date, Participant’s employment with TVA is voluntarily terminated for any reason, the Award shall immediately and automatically terminate and Participant’s right to receive payment of the Award shall be completely forfeited on the date of such voluntary termination of Participant’s employment.
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4.2.
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Death
. If Participant dies while employed and before the Normal Vesting Date, the Plan Administrator shall waive the employment through the Normal Vesting Date condition, and the Award shall be 100 percent vested on the date of Participant’s death. The Award shall be paid to Participant’s “Beneficiary” (as defined below) in accordance with Section 5 below. A Participant's "Beneficiary" means Participant's surviving spouse, unless Participant has affirmatively designated one or more persons or entities to be Participant's Beneficiary. Participant may make, change, or revoke any such designation of a Beneficiary at any time before his or her death without the consent of the Participant’s spouse or anyone Participant previously designated as a Beneficiary. Participant may choose to affirmatively designate primary and secondary Beneficiaries. A Beneficiary designation must comply with procedures established by the Plan Administrator and must have been received by the Plan Administrator before Participant’s death. If Participant dies without a valid Beneficiary designation (as determined by the Plan Administrator in his or her sole discretion) and has no surviving spouse, the Beneficiary shall be Participant’s estate.
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4.3.
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Disability
. If Participant incurs a "Disability" (as defined in the rules and regulations of the TVA retirement system) while employed and before the Normal Vesting Date for the Award, the Plan Administrator shall waive the employment through the Normal Vesting Date condition, and the Award shall be 100 percent vested on the date of Participant's Disability and shall be paid to Participant in accordance with Section 5 below.
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7.1.
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Powers of the Plan Administrator
. The Plan shall be administered by the Senior Vice President, Human Resources and Communications of TVA (“Plan Administrator”) unless otherwise designated by the CEO. The Plan Administrator shall have the power and authority to resolve all questions which may arise in connection with the Award and make factual determinations relating to, and correct mistakes in the Awards. Any action taken by the Plan Administrator regarding the Plan or the Award shall be final, binding, and conclusive.
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7.2.
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Non-Transferability of Rights and Interests
. Participant or Participant’s Beneficiary may not alienate, assign, transfer or otherwise encumber his or her rights with regard to the Award, either voluntarily or involuntarily for the satisfaction of the debts of, or other obligations or claims against, such person, and any attempt to do any of the foregoing shall be null and void. In the event of Participant’s death, the Plan Administrator shall authorize payment of the Award to Participant’s Beneficiary.
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1.
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I have reviewed this Annual Report on Form 10-K of the Tennessee Valley Authority;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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November 20, 2015
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/s/ William D. Johnson
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William D. Johnson
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of the Tennessee Valley Authority;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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November 20, 2015
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/s/ John M. Thomas, III
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John M. Thomas, III
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|
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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|
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/s/ William D. Johnson
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William D. Johnson
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President and Chief Executive Officer
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November 20, 2015
|
|
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/s/ John M. Thomas, III
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John M. Thomas, III
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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November 20, 2015
|
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