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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 Load Management Resources.............................................................................................................................................................................
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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
Balance Sheets
............................................................................................................................................................................................................
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Consolidated
Statements of Operations
.............................................................................................................................................................................................
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Consolidated
Statements of
Comprehensive Income (Loss).............................................................................................................................................................
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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 terms or acronyms that may be used in this Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (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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EIS
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Environmental Impact Statement
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EPA
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Environmental Protection Agency
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EPRI
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The Electric Power Research Institute
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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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GP
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Generation Partners
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GPP
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Green Power Providers
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GPS
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Green Power Switch
®
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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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kW
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Kilowatts
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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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MOX
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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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NES
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Nashville Electric Service
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NO
2
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Nitrogen Dioxide
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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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RECs
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Renewable Energy Certificate(s)
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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
|
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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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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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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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 events such as failures of a facility or infrastructure as well as for environmental clean-up activities;
|
•
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Addition or loss of customers by TVA or the
local power company customers of TVA ("LPCs")
;
|
•
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Significant reductions in demand for electricity produced through non-renewable or centrally located generation sources which may result from, among other things, economic downturns, increased energy efficiency and conservation, increased utilization of distributed generation, and improvements in alternative generation and energy storage technologies;
|
•
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Changes in customer preferences for energy produced from cleaner generation sources;
|
•
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Significant delays, cost increases, or cost overruns associated with the construction and maintenance of generation or transmission assets;
|
•
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Changes in the timing or amount of pension and health care obligations and related funding;
|
•
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Increases in TVA's financial liabilities for decommissioning its nuclear facilities or retiring other assets;
|
•
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Physical or cyber attacks on TVA's assets;
|
•
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The outcome of legal or administrative proceedings;
|
•
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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, geomagnetic disturbances, 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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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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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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Disruption of fuel supplies, which may result from, among other things, economic conditions, weather conditions, production or transportation difficulties, labor challenges, or environmental laws or regulations affecting TVA's fuel suppliers or transporters;
|
•
|
Purchased power price volatility and disruption of purchased power supplies;
|
•
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Events which affect the supply of water for TVA's generation facilities;
|
•
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Changes in TVA's determinations of the appropriate mix of generation assets;
|
•
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Ineffectiveness of TVA's efforts at adapting its organization to an evolving marketplace and remaining cost competitive;
|
•
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Inability to obtain, or loss of, regulatory approval for the construction or operation of assets;
|
•
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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")
;
|
•
|
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, 16 U.S.C. §§ 831-831ee (the “TVA Act”);
|
•
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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;
|
•
|
Changes in the economy and volatility in financial markets;
|
•
|
Changes in technology;
|
•
|
Reliability and creditworthiness of counterparties;
|
•
|
Changes in the market price of commodities such as coal, uranium, natural gas, fuel oil, crude oil, construction materials, reagents, electricity, and emission allowances;
|
•
|
Changes in the market price of equity securities, debt securities, and other investments;
|
•
|
Changes in interest rates, currency exchange rates, and inflation rates;
|
•
|
Ineffectiveness of TVA's disclosure controls and procedures or its internal control over financial reporting;
|
•
|
Inability to eliminate identified deficiencies in TVA's systems, standards, controls, or corporate culture;
|
•
|
Inability to attract or retain a skilled workforce;
|
•
|
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, and cause TVA to forego future construction at these or other facilities;
|
•
|
Loss of quorum of the TVA Board of Directors; and
|
•
|
Other unforeseeable events.
|
Operating Revenues By State
For the years ended September 30
(in millions)
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Alabama
|
$
|
1,504
|
|
|
$
|
1,582
|
|
|
$
|
1,611
|
|
Georgia
|
255
|
|
|
267
|
|
|
268
|
|
|||
Kentucky
|
640
|
|
|
660
|
|
|
680
|
|
|||
Mississippi
|
999
|
|
|
1,023
|
|
|
1,056
|
|
|||
North Carolina
|
58
|
|
|
58
|
|
|
58
|
|
|||
Tennessee
|
6,968
|
|
|
7,189
|
|
|
7,246
|
|
|||
Virginia
|
48
|
|
|
50
|
|
|
51
|
|
|||
Subtotal
|
10,472
|
|
|
10,829
|
|
|
10,970
|
|
|||
Off-system sales
|
7
|
|
|
18
|
|
|
29
|
|
|||
Revenue capitalized during pre-commercial plant operations
|
(18
|
)
|
(1)
|
—
|
|
|
—
|
|
|||
Revenue from sales of electricity
|
10,461
|
|
|
10,847
|
|
|
10,999
|
|
|||
Other revenues
|
155
|
|
|
156
|
|
|
138
|
|
|||
Total operating revenues
|
$
|
10,616
|
|
|
$
|
11,003
|
|
|
$
|
11,137
|
|
Operating Revenues by Customer Type
For the years ended September 30
(in millions)
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue from sales of electricity
|
|
|
|
|
|
||||||
Local power companies
|
$
|
9,696
|
|
|
$
|
9,998
|
|
|
$
|
10,062
|
|
Industries directly served
|
649
|
|
|
701
|
|
|
780
|
|
|||
Federal agencies and other
|
134
|
|
|
148
|
|
|
157
|
|
|||
Revenue capitalized during pre-commercial plant operations
|
(18
|
)
|
(1)
|
—
|
|
|
—
|
|
|||
Revenue from sales of electricity
|
10,461
|
|
|
10,847
|
|
|
10,999
|
|
|||
Other revenues
|
155
|
|
|
156
|
|
|
138
|
|
|||
Total operating revenues
|
$
|
10,616
|
|
|
$
|
11,003
|
|
|
$
|
11,137
|
|
TVA Local Power Company Customer Contracts
At September 30, 2016
|
|||||||||
Contract Arrangements
(1)
|
Number of LPCs
|
|
Sales to
LPCs
in 2016
|
|
Percentage of Total Operating Revenues in 2016
|
||||
|
|
|
(in millions)
|
|
|
||||
20-year termination notice
|
1
|
|
|
$
|
2
|
|
|
—
|
%
|
15-year termination notice
|
9
|
|
|
316
|
|
|
3.0
|
%
|
|
12-year termination notice
|
1
|
|
|
24
|
|
|
0.2
|
%
|
|
10-year termination notice
|
52
|
|
|
3,465
|
|
|
32.6
|
%
|
|
6-year termination notice
|
1
|
|
|
46
|
|
|
0.4
|
%
|
|
5-year termination notice
|
90
|
|
|
5,843
|
|
|
55.0
|
%
|
|
Total
|
154
|
|
|
$
|
9,696
|
|
|
91.2
|
%
|
•
|
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.
|
ANTICIPATED STATUS OF TVA COAL-FIRED PLANTS
|
Fossil Plant
|
Units
|
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 September 30, 2018
|
Bull Run
|
1
|
Scrubber and SCRs on unit
|
- Continuously operate existing 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 |
- Retired Units 1-5 on April 16, 2016
|
|
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 |
- Retired Units 5-10 on 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
- Upgraded scrubbers on Units 1 and 2 |
- Retire Units 1 and 2 after completion of the gas-fired plant by September 30, 2017
- Continuously operate existing emission control equipment on Unit 3 |
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, 2016
|
||||||
Nuclear Unit
|
Status
|
Nameplate Capacity (MW)
|
|
Net Capacity
Factor for
2016 (%)
|
|
Date of Expiration
of Operating
License
|
Sequoyah Unit 1
|
Operating
|
1,221
|
|
80.4
|
|
2040
|
Sequoyah Unit 2
|
Operating
|
1,221
|
|
83.9
|
|
2041
|
Browns Ferry Unit 1
|
Operating
|
1,264
|
|
92.0
|
|
2033
|
Browns Ferry Unit 2
|
Operating
|
1,190
|
|
94.9
|
|
2034
|
Browns Ferry Unit 3
|
Operating
|
1,190
|
|
82.5
|
|
2036
|
Watts Bar Unit 1
|
Operating
|
1,270
|
|
83.4
|
|
2035
|
Watts Bar Unit 2
|
Pre-Commercial
(1)
|
1,220
|
|
—
|
|
2055
|
•
|
Smart Houses
—
test houses built to evaluate residential building techniques, energy efficiency, demand response technologies, and consumer smart grid concepts in a controlled, simulated occupancy research environment;
|
•
|
Hyperefficient HVAC
—
nationwide utility collaboration evaluating six technologies for residential and commercial applications, including ductless heat pumps and air conditioners, variable capacity air conditioning, LED street and area lighting, and efficient data centers for the commercial sector;
|
•
|
Grid-Empowered Consumers
—
comparative field test to evaluate the energy and demand savings potential of grid-enabled residential appliances in 20 test homes; and
|
•
|
Electric Vehicle Readiness
—
coordination of activities with EPRI and industry stakeholders related to transportation electrification to support operational fleet requirements and the needs of LPCs to provide guidance on matters of plug-in electric vehicle grid integration and readiness for transportation electrification technologies.
|
Air, Water, and Waste Quality Estimated Potential Environmental Expenditures
(1)
At September 30, 2016
(in millions)
|
|||||||
|
Estimated Timetable
|
|
|
|
Total Estimated Expenditures
|
||
Coal combustion residual conversion program
(2)
|
2017-2022
|
|
|
|
$
|
1,200
|
|
Proposed clean air control projects
(3)
|
2017-2021
|
|
|
|
375
|
|
|
Clean Water Act requirements
(4)
|
2017-2023
|
|
|
|
400
|
|
•
|
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, 2016
|
|||||||||||||
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
|
|
|
865
|
|
|
1967
|
|
|
1967
|
|
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
|
|
|
35
|
|
10,285
|
|
|
|
|
|
|
|
|
Nuclear
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Browns Ferry
|
Alabama
|
|
3
|
|
|
3,309
|
|
|
1974
|
|
|
1977
|
|
Sequoyah
|
Tennessee
|
|
2
|
|
|
2,292
|
|
|
1981
|
|
|
1982
|
|
Watts Bar
(3)
|
Tennessee
|
|
1
|
|
|
1,135
|
|
|
1996
|
|
|
1996
|
|
Total Nuclear
|
|
|
6
|
|
|
6,736
|
|
|
|
|
|
|
|
Hydroelectric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional Plants
|
Alabama
|
|
36
|
|
|
1,176
|
|
|
1925
|
|
|
1962
|
|
|
Georgia
|
|
2
|
|
|
35
|
|
|
1931
|
|
|
1956
|
|
|
Kentucky
|
|
5
|
|
|
223
|
|
|
1944
|
|
|
1948
|
|
|
North Carolina
|
|
6
|
|
|
492
|
|
|
1940
|
|
|
1956
|
|
|
Tennessee
|
|
60
|
|
|
1,845
|
|
|
1912
|
|
|
1972
|
|
Pumped-Storage
(4)
|
Tennessee
|
|
4
|
|
|
1,616
|
|
|
1978
|
|
|
1979
|
|
Total Hydroelectric
|
|
|
113
|
|
|
5,387
|
|
|
|
|
|
|
|
Natural Gas and/or Oil-Fired
(5)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
642
|
|
|
1975
|
|
|
2000
|
|
Gleason
|
Tennessee
|
|
3
|
|
|
500
|
|
|
2000
|
|
|
2000
|
|
Johnsonville
|
Tennessee
|
|
20
|
|
|
1,276
|
|
|
1975
|
|
|
2000
|
|
Kemper
|
Mississippi
|
|
4
|
|
|
348
|
|
|
2002
|
|
|
2002
|
|
Lagoon Creek
|
Tennessee
|
|
12
|
|
|
1,048
|
|
|
2001
|
|
|
2002
|
|
Marshall County
|
Kentucky
|
|
8
|
|
|
608
|
|
|
2002
|
|
|
2002
|
|
Subtotal Simple-Cycle Combustion Turbine
|
|
|
87
|
|
|
5,738
|
|
|
|
|
|
|
|
Combined-Cycle Combustion Turbine
|
|
|
|
|
|
|
|
|
|
||||
Ackerman
(7)
|
Mississippi
|
|
1
|
|
|
713
|
|
|
2007
|
|
|
2007
|
|
Caledonia
(8)
|
Mississippi
|
|
3
|
|
|
765
|
|
|
2003
|
|
|
2003
|
|
John Sevier
(9)
|
Tennessee
|
|
1
|
|
|
871
|
|
|
2012
|
|
|
2012
|
|
Lagoon Creek
(10)
|
Tennessee
|
|
1
|
|
|
525
|
|
|
2010
|
|
|
2010
|
|
Magnolia
|
Mississippi
|
|
3
|
|
|
918
|
|
|
2003
|
|
|
2003
|
|
Southaven
|
Mississippi
|
|
3
|
|
|
780
|
|
|
2003
|
|
|
2003
|
|
Subtotal Combined-Cycle Combustion Turbine
|
|
|
12
|
|
|
4,572
|
|
|
|
|
|
||
Total Natural Gas and/or Oil-Fired
|
|
|
99
|
|
|
10,310
|
|
|
|
|
|
||
Diesel Generator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meridian
|
Mississippi
|
|
5
|
|
|
9
|
|
|
1998
|
|
|
1998
|
|
Total Diesel Generators
|
|
|
5
|
|
|
9
|
|
|
|
|
|
|
|
TVA Renewable Resources (non-hydro)
(11)
|
|
|
|
|
|
< 1
|
|
|
|
|
|
|
|
Total TVA-Operated Generating Facilities
|
|
|
|
|
|
32,727
|
|
|
|
|
|
|
|
Contract Renewable Resources
(12)(13)
|
|
|
|
|
|
204
|
|
|
|
|
|
|
|
Power Purchase and Other Agreements
(14)
|
|
|
|
|
|
3,531
|
|
|
|
|
|
|
|
Total Summer Net Capability
|
|
|
|
|
|
36,462
|
|
|
|
|
|
|
|
•
|
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;
|
•
|
510 transmission substations, power switchyards, and switching stations; and
|
•
|
1,314 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)
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Sales (millions of kWh)
|
155,855
|
|
|
158,163
|
|
|
158,057
|
|
|
161,925
|
|
|
165,255
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Peak load (MW)
(3)
|
29,824
|
|
|
32,751
|
|
|
33,352
|
|
|
28,726
|
|
|
31,098
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
10,616
|
|
|
$
|
11,003
|
|
|
$
|
11,137
|
|
|
$
|
10,956
|
|
|
$
|
11,220
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fuel expense
|
$
|
2,126
|
|
|
$
|
2,444
|
|
|
$
|
2,730
|
|
|
$
|
2,820
|
|
|
$
|
2,680
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchased power expense
|
$
|
964
|
|
|
$
|
950
|
|
|
$
|
1,094
|
|
|
$
|
1,027
|
|
|
$
|
1,189
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance expense
|
$
|
2,842
|
|
|
$
|
2,838
|
|
|
$
|
3,341
|
|
|
$
|
3,428
|
|
|
$
|
3,510
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest expense
|
$
|
1,136
|
|
|
$
|
1,133
|
|
|
$
|
1,169
|
|
|
$
|
1,226
|
|
|
$
|
1,273
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,233
|
|
|
$
|
1,111
|
|
|
$
|
469
|
|
|
$
|
271
|
|
|
$
|
60
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction expenditures
|
$
|
2,710
|
|
|
$
|
2,850
|
|
|
$
|
2,384
|
|
|
$
|
2,051
|
|
|
$
|
2,119
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
50,494
|
|
|
$
|
48,745
|
|
|
$
|
45,514
|
|
|
$
|
46,015
|
|
|
$
|
47,257
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt, net
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term power bonds, net
|
$
|
20,901
|
|
|
$
|
22,617
|
|
|
$
|
21,880
|
|
|
$
|
22,239
|
|
|
$
|
20,200
|
|
Long-term debt of variable interest entities, net
|
$
|
1,199
|
|
|
$
|
1,233
|
|
|
$
|
1,265
|
|
|
$
|
1,296
|
|
|
$
|
973
|
|
Long-term notes payable
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total long-term debt, net
|
$
|
22,148
|
|
|
$
|
23,850
|
|
|
$
|
23,145
|
|
|
$
|
23,535
|
|
|
$
|
21,173
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current debt, net
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term debt, net
|
$
|
1,407
|
|
|
$
|
1,034
|
|
|
$
|
596
|
|
|
$
|
2,432
|
|
|
$
|
1,507
|
|
Current maturities of power bonds
|
$
|
1,555
|
|
|
$
|
32
|
|
|
$
|
1,032
|
|
|
$
|
32
|
|
|
$
|
2,308
|
|
Current maturities of long-term debt of variable interest entities
|
$
|
35
|
|
|
$
|
33
|
|
|
$
|
32
|
|
|
$
|
30
|
|
|
$
|
13
|
|
Current maturities of notes payable
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total current debt, net
|
$
|
3,024
|
|
|
$
|
1,099
|
|
|
$
|
1,660
|
|
|
$
|
2,494
|
|
|
$
|
3,828
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total debt
(4)
|
$
|
25,172
|
|
|
$
|
24,949
|
|
|
$
|
24,805
|
|
|
$
|
26,029
|
|
|
$
|
25,001
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital leases
(5)
|
$
|
181
|
|
|
$
|
105
|
|
|
$
|
109
|
|
|
$
|
43
|
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Membership interests of variable interest entity subject to mandatory redemption
(4)(5)
|
$
|
35
|
|
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Leaseback obligations
|
$
|
467
|
|
|
$
|
616
|
|
|
$
|
691
|
|
|
$
|
761
|
|
|
$
|
1,203
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy prepayment obligations
|
$
|
210
|
|
|
$
|
310
|
|
|
$
|
410
|
|
|
$
|
510
|
|
|
$
|
612
|
|
•
|
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
2016
;
|
•
|
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 $30.0 billion outstanding at any given time. Although TVA's operations were originally funded primarily with appropriations from Congress, TVA has not received any appropriations from Congress for any activities since 1999 and, as directed by Congress, has funded essential stewardship activities primarily with power revenues.
|
•
|
Energy - Provide reliable, affordable electric power throughout the Tennessee Valley;
|
•
|
Environment - Act as steward of the region’s natural resources; and
|
•
|
Economic Development - Serve as a catalyst for sustainable economic development.
|
•
|
Rates - Maintain low rates;
|
•
|
Stewardship - Be responsible stewards;
|
•
|
Debt - Live within its means; and
|
•
|
Asset Portfolio - Meet reliability expectations and provide a balanced portfolio.
|
Corporate Measure
|
Weight
|
Actual
|
Threshold
|
Target
|
Stretch
|
Nuclear unit capability factor (%)
|
20%
|
89.2%
|
90.6%
|
91.6%
|
92.0%
|
Coal seasonal equivalent forced outage rate (%)
|
10%
|
5.3%
|
5.9%
|
5.4%
|
4.9%
|
Combined cycle seasonal equivalent forced outage rate (%)
|
10%
|
0.3%
|
2.1%
|
1.3%
|
0.9%
|
Load not served (system minutes)
|
10%
|
4.8%
|
5.0%
|
4.0%
|
3.5%
|
Reportable environmental events
|
10%
|
9
|
15
|
12
|
9
|
Corporate total spending ($ millions)
|
40%
|
$782
|
$849
|
$830
|
$810
|
|
Sales of Electricity
|
|
|
(millions of kWh)
|
|
|
Degree Days
|
|
Summary Consolidated Statements of Operations
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating revenues
|
$
|
10,616
|
|
|
$
|
11,003
|
|
|
$
|
11,137
|
|
Operating expenses
|
8,290
|
|
|
8,788
|
|
|
9,548
|
|
|||
Operating income
|
2,326
|
|
|
2,215
|
|
|
1,589
|
|
|||
Other income, net
|
43
|
|
|
29
|
|
|
49
|
|
|||
Net interest expense
|
1,136
|
|
|
1,133
|
|
|
1,169
|
|
|||
Net income
|
$
|
1,233
|
|
|
$
|
1,111
|
|
|
$
|
469
|
|
|
Operating Revenues
|
|
|
2016
|
|
Variance 2016 vs 2015
|
|
2015
|
|
Variance 2015 vs 2014
|
|
2014
|
||||||||||
Base revenue
|
$
|
7,468
|
|
(1)
|
$
|
(56
|
)
|
|
$
|
7,524
|
|
|
$
|
230
|
|
|
$
|
7,294
|
|
Fuel cost recovery
|
2,986
|
|
|
(319
|
)
|
|
3,305
|
|
|
(371
|
)
|
|
3,676
|
|
|||||
Off-system sales
|
7
|
|
|
(11
|
)
|
|
18
|
|
|
(11
|
)
|
|
29
|
|
|||||
Revenue from sales of electricity
|
10,461
|
|
|
(386
|
)
|
|
10,847
|
|
|
(152
|
)
|
|
10,999
|
|
|||||
Other revenue
|
155
|
|
|
(1
|
)
|
|
156
|
|
|
18
|
|
|
138
|
|
|||||
Total operating revenues
|
$
|
10,616
|
|
|
$
|
(387
|
)
|
|
$
|
11,003
|
|
|
$
|
(134
|
)
|
|
$
|
11,137
|
|
Fuel
|
Fuel expense decreased $318 million for the year ended September 30, 2016, as compared to the prior year. The decrease in fuel expense was due in part to favorable market prices for natural gas and a change in the mix of generation resources, which collectively contributed approximately $169 million to the decrease. As an indication of general market direction, the average Henry Hub natural gas spot price for the year ended September 30, 2016, was approximately 26 percent lower than the prior year. Additionally, a three percent decrease in generation from TVA-owned resources contributed approximately $95 million to the decrease in fuel expense.
|
Purchased Power
|
Purchased power expense increased $14 million for the year ended September 30, 2016, as compared to the prior year. An increase of 17 percent in the volume of power purchased for the year ended September 30, 2016, as compared to the prior year contributed approximately $165 million to the increase in purchased power expense. This increase in volume was driven primarily by the favorability of natural gas prices as compared to other sources of generation, as TVA’s primary source of purchased power is natural gas-fired generation. Partially offsetting this increase was a $130 million decrease in purchased power expense due to lower rates driven by lower market prices for natural gas.
|
Operating and Maintenance
|
Operating and maintenance expense remained essentially flat for the year ended September 30, 2016, as compared to the same period of the prior year. This was due in part to a $42 million increase in maintenance expenses related to major projects, including dam safety and remediation projects and projects relating to natural gas-fired facilities, in the year ended September 30, 2016, as compared to the same period of the prior year. Additionally, there was an increase of approximately $23 million in net write-offs during the year ended September 30, 2016, as compared to the same period of the prior year, primarily due to inventory and project write-offs. These increases in operating and maintenance expense were partially offset by a $48 million decrease in planned outage expense, primarily due to the timing and efficiencies of planned nuclear outages and decreased planned coal outages during the year ended September 30, 2016, as compared to the same period of the prior year. Additionally, there was a decrease of $12 million in fuel-related operating and maintenance expense primarily as a result of lower coal generation during the year ended September 30, 2016, as compared to the same period of the prior year.
|
Depreciation and Amortization
|
Depreciation and amortization expense decreased $195 million for the year ended September 30, 2016, as compared to the prior year. The decrease was primarily a result of approximately $294 million less depreciation expense driven by the retirement of Widows Creek Unit 7 in September 2015 and Colbert Fossil Plant ("Colbert") Units 1-4 in March 2016.
See Key Initiatives and Challenges
—
Generation Resources
—
Coal-Fired Units
. In addition, there was a $79 million decrease in depreciation and amortization expense related to the 20-year license extension for Sequoyah. Partially offsetting these decreases was an increase of $100 million in the amortization of the non-nuclear decommissioning regulatory asset and an increase of approximately $77 million primarily from net additions to Completed plant.
Depreciation rates are determined based on an external depreciation study. See Note 1 —
Property, Plant, and Equipment, and Depreciation
—
Depreciation
. TVA obtained and implemented a new study during the first quarter of 2017. Implementation of the new study is expected to result in a decrease to depreciation and amortization expense of approximately $170 million during 2017. This estimate represents the impact of implementing the new study only and does not include any potential impact of other possible changes, including additions to or retirements of net completed plant, that may occur during 2017.
|
Tax Equivalents
|
Tax equivalents expense decreased $3 million for the year ended September 30, 2016, as compared to the same period of the prior year. This change primarily reflects a decrease in the accrued tax equivalent expense related to the fuel cost adjustment mechanism. The accrued tax equivalent expense is equal to five percent of the fuel cost adjustment mechanism revenues and decreased for the year ended September 30, 2016, as compared to the same period of the prior year.
|
Fuel
|
Fuel expense decreased $286 million for the year ended September 30, 2015, as compared to the prior year. This decrease was primarily driven by overall favorable fuel rates and a change in the mix of generation resources, which collectively contributed approximately $314 million to the decrease in fuel expense. Partially offsetting this decrease in fuel expense was an increase in fuel expense driven by more timely collections of fluctuations in fuel costs during the year ended September 30, 2015, which accounted for a $25 million increase.
|
Purchased Power
|
Purchased power expense decreased $144 million for the year ended September 30, 2015, as compared to the prior year, primarily due to lower market prices for natural gas, as TVA’s primary source of purchased power is natural gas-fired generation. The average Henry Hub natural gas spot price for the year ended September 30, 2015, was approximately 30 percent lower than the prior year. The lower prices contributed to a $156 million decrease in purchased power expense. Partially offsetting this decrease in purchased power expense was a $6 million increase in purchased power expense driven by more timely collections of fluctuations in fuel costs in the year ended September 30, 2015. Additionally offsetting the decrease in purchased power expense was an increase of one percent in the volume of power purchased contributing to an increase in purchased power expense of $6 million.
|
Operating and Maintenance
|
Operating and maintenance expense decreased $503 million for the year ended September 30, 2015, as compared to the prior year. This decrease was due to several factors including a $241 million decrease in pension and post-retirement costs due mainly to regulatory accounting actions taken by the TVA Board. Beginning October 1, 2014, TVA began deferring pension costs as regulatory assets to the extent that the amount calculated under accounting principles generally accepted in the United States of America ("GAAP") as pension expense differs from the amount TVA contributes to the pension plan. The ongoing cost savings initiatives undertaken by management contributed approximately $164 million to the decrease in operating and maintenance expense, with approximately $114 million attributable to labor savings. Additionally, there was a $60 million decrease in projects expense due primarily to the timing of nuclear and information technology maintenance projects and a $34 million decrease in planned outage expense, resulting from approximately 50 less nuclear outage days in the year ended September 30, 2015, as compared to the prior year.
|
Depreciation and Amortization
|
Depreciation and amortization expense increased $188 million for the year ended September 30, 2015, as compared to the prior year, primarily due to an increase of $177 million in the amount of accelerated depreciation expense recognized on certain coal-fired units. The increase in accelerated depreciation was driven primarily by the decision to accelerate the retirement of Widows Creek Unit 7. See Note 1 —
Property, Plant, and Equipment
,
and Depreciation
.
|
Tax Equivalents
|
Tax equivalents expense decreased $15 million for the year ended September 30, 2015, as compared to the same period of the prior year. This change primarily reflects a decrease in the accrued tax equivalent expense related to the fuel cost adjustment mechanism. The accrued tax equivalent expense is equal to five percent of fuel cost adjustment mechanism revenues and decreased for the year ended September 30, 2015, as compared to the same period of the prior year.
|
Interest Expense and Rates
For the years ended September 30
|
|||||||||||||||||
|
2016
|
|
Percent Change
|
|
2015
|
|
Percent Change
|
|
2014
|
||||||||
Interest expense
(1)
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
1,371
|
|
|
1.8
|
%
|
|
$
|
1,347
|
|
|
0.2
|
%
|
|
$
|
1,344
|
|
Allowance for funds used during construction
|
(235
|
)
|
|
9.8
|
%
|
|
(214
|
)
|
|
22.3
|
%
|
|
(175
|
)
|
|||
Net interest expense
|
$
|
1,136
|
|
|
0.3
|
%
|
|
$
|
1,133
|
|
|
(3.1
|
)%
|
|
$
|
1,169
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average blended interest rate
|
5.15
|
%
|
|
(0.2
|
)%
|
|
5.16
|
%
|
|
0.2
|
%
|
|
5.15
|
%
|
•
|
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 16
—
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 2016
|
|
For the year ended September 30 2016
|
|
At
September 30 2015 |
|
For the year ended September 30 2015
|
|
At
September 30 2014
|
|
For the year ended September 30 2014
|
||||||||||||
Amount Outstanding (at End of Period) or Average Amount
Outstanding (During Period)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
$
|
1,407
|
|
|
$
|
1,323
|
|
|
$
|
1,034
|
|
|
$
|
1,357
|
|
|
$
|
596
|
|
|
$
|
1,737
|
|
Weighted Average Interest Rate
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
0.203
|
%
|
|
0.240
|
%
|
|
0.055
|
%
|
|
0.051
|
%
|
|
0.002
|
%
|
|
0.051
|
%
|
||||||
Maximum Month-End Amount
Outstanding (During Period)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount notes
|
N/A
|
|
|
$
|
1,561
|
|
|
N/A
|
|
|
$
|
2,590
|
|
|
N/A
|
|
|
$
|
2,442
|
|
Capital Expenditures
(1)
As of September 30
|
|||||||||||||||
|
Actual
|
|
Estimated Capital Expenditures
|
||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||
Capacity expansion expenditures
|
|
|
|
|
|
|
|
||||||||
Watts Bar Unit 2
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Allen combined cycle plant
|
353
|
|
|
271
|
|
|
162
|
|
|
—
|
|
||||
Paradise combined cycle plant
|
248
|
|
|
285
|
|
|
15
|
|
|
—
|
|
||||
Other capacity expansion
|
186
|
|
|
298
|
|
|
262
|
|
|
185
|
|
||||
Environmental expenditures
|
|
|
|
|
|
|
|
||||||||
Clean air and waste water
|
203
|
|
|
209
|
|
|
93
|
|
|
119
|
|
||||
Coal combustion residual
|
90
|
|
|
179
|
|
|
164
|
|
|
130
|
|
||||
Transmission expenditures
|
367
|
|
|
403
|
|
|
365
|
|
|
355
|
|
||||
Other capital expenditures
(2)
|
824
|
|
|
921
|
|
|
828
|
|
|
803
|
|
||||
Total construction expenditures
|
$
|
2,462
|
|
(3)
|
$
|
2,566
|
|
|
$
|
1,889
|
|
|
$
|
1,592
|
|
Commitments and Contingencies
Payments due in the year ending September 30
|
|||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt
(1)
|
$
|
2,962
|
|
|
$
|
1,682
|
|
|
$
|
1,032
|
|
|
$
|
30
|
|
|
$
|
1,860
|
|
|
$
|
16,609
|
|
|
$
|
24,175
|
|
Interest payments relating to debt
|
1,195
|
|
|
1,105
|
|
|
1,030
|
|
|
1,020
|
|
|
981
|
|
|
16,960
|
|
|
22,291
|
|
|||||||
Debt of VIEs
(2)
|
35
|
|
|
36
|
|
|
38
|
|
|
40
|
|
|
41
|
|
|
1,056
|
|
|
1,246
|
|
|||||||
Interest payments relating to debt of VIEs
|
58
|
|
|
56
|
|
|
54
|
|
|
52
|
|
|
50
|
|
|
590
|
|
|
860
|
|
|||||||
Notes payable
|
27
|
|
|
27
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|||||||
Interest payments relating to notes payable
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Lease obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital
(3)
|
51
|
|
|
51
|
|
|
50
|
|
|
50
|
|
|
50
|
|
|
564
|
|
|
816
|
|
|||||||
Non-cancelable operating
(4)
|
43
|
|
|
32
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
13
|
|
|
163
|
|
|||||||
Purchase obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Power
(5)
|
254
|
|
|
265
|
|
|
266
|
|
|
246
|
|
|
244
|
|
|
1,541
|
|
|
2,816
|
|
|||||||
Fuel
(6)
|
1,312
|
|
|
917
|
|
|
569
|
|
|
324
|
|
|
327
|
|
|
1,006
|
|
|
4,455
|
|
|||||||
Other
(7)
|
88
|
|
|
65
|
|
|
58
|
|
|
47
|
|
|
34
|
|
|
604
|
|
|
896
|
|
|||||||
Environmental Agreements
|
34
|
|
|
5
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|
7
|
|
|
52
|
|
|||||||
Membership interests of variable interest entity subject to mandatory redemption
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
23
|
|
|
35
|
|
|||||||
Interest payments related to membership interests of variable interest entity subject to mandatory redemption
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
11
|
|
|
21
|
|
|||||||
Flood response commitment to NRC
|
14
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||||
Litigation settlements
|
7
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Unfunded loan commitments
|
9
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||||
Long-term monitoring costs -- Kingston ash spill
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|
14
|
|
|||||||
Payments on other financings
|
76
|
|
|
76
|
|
|
75
|
|
|
73
|
|
|
207
|
|
|
26
|
|
|
533
|
|
|||||||
Payments to U.S. Treasury - Return on Power Program Appropriation Investment
|
5
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|
7
|
|
|
69
|
|
|
98
|
|
|||||||
Retirement Plan
(8)
|
300
|
|
|
300
|
|
|
300
|
|
|
300
|
|
|
300
|
|
|
4,500
|
|
|
6,000
|
|
|||||||
Total
|
$
|
6,476
|
|
|
$
|
4,649
|
|
|
$
|
3,533
|
|
|
$
|
2,220
|
|
|
$
|
4,133
|
|
|
$
|
43,588
|
|
|
$
|
64,599
|
|
Energy Prepayment Obligations
Obligations due in the year ending September 30
|
|||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Energy Prepayment Obligations
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
210
|
|
Interest payments relating to energy prepayment obligations
|
46
|
|
|
46
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|||||||
Total
|
$
|
146
|
|
|
$
|
146
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
306
|
|
Summary Table of Major Projects
|
||||||
Projects
|
|
Estimated Project Cost
(in billions)
|
|
Estimated
In-Service Year
|
||
Capacity Expansion Projects
|
|
|
|
|
||
Paradise combined cycle plant
|
|
$
|
1.1
|
|
|
2017
|
Allen combined cycle plant
|
|
1.0
|
|
|
2018
|
|
Environmental
|
|
|
|
|
||
Gallatin clean air controls
|
|
1.0
|
|
|
2018
|
•
|
Regulatory Accounting
|
•
|
Asset Retirement Obligations
|
•
|
Pension and Other Post-Retirement Benefits
|
|
TVA’s 2016 COLA assumption was changed to be 1.25 percent in 2017 and 2.00 percent in 2018 and thereafter, to better reflect anticipated future plan experience and the plan amendments to the COLA. Prior to 2013, TVA had maintained a 2.50 percent COLA, but TVA 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. The 2015 and 2014 COLA assumptions assumed that the COLA would trend to the ultimate rate of 2.40 percent in 2021 and to the ultimate rate of 2.50 percent in 2020, respectively.
Contributions
– The minimum contribution for 2016 was $209 million; however, TVA made a $275 million contribution to TVARS. The 2015 minimum contribution was $215 million; however, TVA contributed $275 million to TVARS. In 2016, TVA made contributions of $6 million to the SERP and $47 million to the other post-retirement benefit plans. In 2015, TVA made contributions of $7 million to the SERP and $44 million to the other post-retirement benefit plans. TVA expects to contribute $300 million to TVARS, $5 million to the SERP, and $35 million to the other post-retirement benefit plans in 2017.
|
Effect if Actual Results Differ From Assumptions
|
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 2016 and 2015 was $287 million and $(762) million, respectively. Compared with the assumed return of 7.00 percent, the 2016 and 2015 actuarial gain (loss) was due to the actual rates of return on the fair value of assets of 11.20 percent and (4.48) percent, respectively. The differences between expected and actual returns that result in an actuarial gain or loss are recognized as a increase or decrease, 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 2016 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.
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 2016 net periodic pension cost by $22 million and the 2016 projected pension benefit obligation by $388 million.
Mortality
– As the mortality assumptions improve (e.g., assume participants are living longer), the benefit obligation increases. The change in the improvement scale reflected decreased life expectancies resulting in an increase in the pension and other post-retirement benefit obligations by $133 million and $7 million, respectively, as of September 30, 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 $105 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 $(88) 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 2016 pension benefit obligation by $254 million and increase the net periodic pension benefit cost by $31 million.
|
ASSETS
|
|||||||
|
2016
|
|
2015
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
300
|
|
|
$
|
300
|
|
Restricted cash and investments
|
—
|
|
|
15
|
|
||
Accounts receivable, net
|
1,747
|
|
|
1,600
|
|
||
Inventories, net
|
993
|
|
|
1,031
|
|
||
Regulatory assets
|
536
|
|
|
506
|
|
||
Other current assets
|
68
|
|
|
54
|
|
||
Total current assets
|
3,644
|
|
|
3,506
|
|
||
|
|
|
|
||||
Property, plant, and equipment
|
|
|
|
|
|
||
Completed plant
|
51,564
|
|
|
50,069
|
|
||
Less accumulated depreciation
|
(27,592
|
)
|
|
(26,318
|
)
|
||
Net completed plant
|
23,972
|
|
|
23,751
|
|
||
Construction in progress
|
8,458
|
|
|
7,147
|
|
||
Nuclear fuel
|
1,450
|
|
|
1,415
|
|
||
Capital leases
|
163
|
|
|
94
|
|
||
Total property, plant, and equipment, net
|
34,043
|
|
|
32,407
|
|
||
|
|
|
|
||||
Investment funds
|
2,257
|
|
|
2,011
|
|
||
|
|
|
|
||||
Regulatory and other long-term assets
|
|
|
|
|
|
||
Regulatory assets
|
10,164
|
|
|
10,418
|
|
||
Other long-term assets
|
386
|
|
|
403
|
|
||
Total regulatory and other long-term assets
|
10,550
|
|
|
10,821
|
|
||
|
|
|
|
||||
Total assets
|
$
|
50,494
|
|
|
$
|
48,745
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
LIABILITIES AND PROPRIETARY CAPITAL
|
|||||||
|
2016
|
|
2015
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
2,163
|
|
|
$
|
2,127
|
|
Accrued interest
|
363
|
|
|
366
|
|
||
Current portion of leaseback obligations
|
58
|
|
|
79
|
|
||
Current portion of energy prepayment obligations
|
100
|
|
|
100
|
|
||
Regulatory liabilities
|
154
|
|
|
164
|
|
||
Short-term debt, net
|
1,407
|
|
|
1,034
|
|
||
Current maturities of power bonds
|
1,555
|
|
|
32
|
|
||
Current maturities of long-term debt of variable interest entities
|
35
|
|
|
33
|
|
||
Current maturities of notes payable
|
27
|
|
|
—
|
|
||
Total current liabilities
|
5,862
|
|
|
3,935
|
|
||
|
|
|
|
||||
Other liabilities
|
|
|
|
||||
Post-retirement and post-employment benefit obligations
|
6,929
|
|
|
7,107
|
|
||
Asset retirement obligations
|
3,840
|
|
|
3,682
|
|
||
Other long-term liabilities
|
2,776
|
|
|
2,221
|
|
||
Leaseback obligations
|
409
|
|
|
537
|
|
||
Energy prepayment obligations
|
110
|
|
|
210
|
|
||
Total other liabilities
|
14,064
|
|
|
13,757
|
|
||
|
|
|
|
||||
Long-term debt, net
|
|
|
|
||||
Long-term power bonds, net
|
20,901
|
|
|
22,617
|
|
||
Long-term debt of variable interest entities, net
|
1,199
|
|
|
1,233
|
|
||
Long-term notes payable
|
48
|
|
|
—
|
|
||
Total long-term debt, net
|
22,148
|
|
|
23,850
|
|
||
|
|
|
|
||||
Total liabilities
|
42,074
|
|
|
41,542
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 20)
|
|
|
|
||||
|
|
|
|
||||
Proprietary capital
|
|
|
|
||||
Power program appropriation investment
|
258
|
|
|
258
|
|
||
Power program retained earnings
|
7,594
|
|
|
6,357
|
|
||
Total power program proprietary capital
|
7,852
|
|
|
6,615
|
|
||
Nonpower programs appropriation investment, net
|
580
|
|
|
590
|
|
||
Accumulated other comprehensive income (loss)
|
(12
|
)
|
|
(2
|
)
|
||
Total proprietary capital
|
8,420
|
|
|
7,203
|
|
||
|
|
|
|
||||
Total liabilities and proprietary capital
|
$
|
50,494
|
|
|
$
|
48,745
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating revenues
|
|
|
|
|
|
||||||
Revenue from sales of electricity
|
$
|
10,461
|
|
|
$
|
10,847
|
|
|
$
|
10,999
|
|
Other revenue
|
155
|
|
|
156
|
|
|
138
|
|
|||
Total operating revenues
|
10,616
|
|
|
11,003
|
|
|
11,137
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|||
Fuel
|
2,126
|
|
|
2,444
|
|
|
2,730
|
|
|||
Purchased power
|
964
|
|
|
950
|
|
|
1,094
|
|
|||
Operating and maintenance
|
2,842
|
|
|
2,838
|
|
|
3,341
|
|
|||
Depreciation and amortization
|
1,836
|
|
|
2,031
|
|
|
1,843
|
|
|||
Tax equivalents
|
522
|
|
|
525
|
|
|
540
|
|
|||
Total operating expenses
|
8,290
|
|
|
8,788
|
|
|
9,548
|
|
|||
Operating income
|
2,326
|
|
|
2,215
|
|
|
1,589
|
|
|||
Other income (expense), net
|
43
|
|
|
29
|
|
|
49
|
|
|||
Interest expense
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
1,371
|
|
|
1,347
|
|
|
1,344
|
|
|||
Allowance for funds used during construction
|
(235
|
)
|
|
(214
|
)
|
|
(175
|
)
|
|||
Net interest expense
|
1,136
|
|
|
1,133
|
|
|
1,169
|
|
|||
Net income (loss)
|
$
|
1,233
|
|
|
$
|
1,111
|
|
|
$
|
469
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,233
|
|
|
$
|
1,111
|
|
|
$
|
469
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Net unrealized gain (loss) on cash flow hedges
|
(139
|
)
|
|
(72
|
)
|
|
4
|
|
|||
Reclassification to earnings from cash flow hedges
|
129
|
|
|
65
|
|
|
(2
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(10
|
)
|
|
$
|
(7
|
)
|
|
$
|
2
|
|
Total comprehensive income (loss)
|
$
|
1,223
|
|
|
$
|
1,104
|
|
|
$
|
471
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,233
|
|
|
$
|
1,111
|
|
|
$
|
469
|
|
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)
|
1,882
|
|
|
2,077
|
|
|
1,888
|
|
|||
Amortization of nuclear fuel cost
|
287
|
|
|
277
|
|
|
279
|
|
|||
Non-cash retirement benefit expense
|
327
|
|
|
332
|
|
|
572
|
|
|||
Prepayment credits applied to revenue
|
(100
|
)
|
|
(100
|
)
|
|
(100
|
)
|
|||
Fuel cost adjustment deferral
|
(83
|
)
|
|
(6
|
)
|
|
(38
|
)
|
|||
Fuel cost tax equivalents
|
(16
|
)
|
|
(18
|
)
|
|
6
|
|
|||
Changes in current assets and liabilities
|
|
|
|
|
|
|
|
||||
Accounts receivable, net
|
(83
|
)
|
|
93
|
|
|
(79
|
)
|
|||
Inventories and other current assets, net
|
50
|
|
|
(12
|
)
|
|
34
|
|
|||
Accounts payable and accrued liabilities
|
(4
|
)
|
|
(121
|
)
|
|
147
|
|
|||
Accrued interest
|
(3
|
)
|
|
(13
|
)
|
|
2
|
|
|||
Regulatory asset costs
|
(31
|
)
|
|
(23
|
)
|
|
(56
|
)
|
|||
Pension contributions
|
(281
|
)
|
|
(282
|
)
|
|
(256
|
)
|
|||
Insurance recoveries
|
7
|
|
|
63
|
|
|
175
|
|
|||
Settlements of asset retirement obligations
|
(139
|
)
|
|
(58
|
)
|
|
(14
|
)
|
|||
Other, net
|
(4
|
)
|
|
(5
|
)
|
|
(49
|
)
|
|||
Net cash provided by operating activities
|
3,042
|
|
|
3,315
|
|
|
2,980
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Construction expenditures
|
(2,710
|
)
|
|
(2,850
|
)
|
|
(2,384
|
)
|
|||
Combustion turbine asset acquisition
|
—
|
|
|
(342
|
)
|
|
—
|
|
|||
Nuclear fuel expenditures
|
(300
|
)
|
|
(350
|
)
|
|
(326
|
)
|
|||
Purchases of investments, net
|
(50
|
)
|
|
(52
|
)
|
|
(48
|
)
|
|||
Loans and other receivables
|
|
|
|
|
|
|
|
||||
Advances
|
(10
|
)
|
|
(17
|
)
|
|
(6
|
)
|
|||
Repayments
|
7
|
|
|
8
|
|
|
6
|
|
|||
Other, net
|
(50
|
)
|
|
18
|
|
|
2
|
|
|||
Net cash used in investing activities
|
(3,113
|
)
|
|
(3,585
|
)
|
|
(2,756
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Long-term debt
|
|
|
|
|
|
|
|
|
|||
Issues of power bonds
|
—
|
|
|
973
|
|
|
989
|
|
|||
Redemptions and repurchases of power bonds
|
(76
|
)
|
|
(1,180
|
)
|
|
(365
|
)
|
|||
Payments on debt of variable interest entities
|
(33
|
)
|
|
(32
|
)
|
|
(30
|
)
|
|||
Short-term debt issues (redemptions), net
|
370
|
|
|
437
|
|
|
(1,837
|
)
|
|||
Payments on leases and leasebacks
|
(159
|
)
|
|
(80
|
)
|
|
(73
|
)
|
|||
Financing costs, net
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
|||
Payments to U.S. Treasury
|
(6
|
)
|
|
(5
|
)
|
|
(14
|
)
|
|||
Other, net
|
(25
|
)
|
|
(36
|
)
|
|
8
|
|
|||
Net cash (used in) provided by financing activities
|
71
|
|
|
70
|
|
|
(1,326
|
)
|
|||
Net change in cash and cash equivalents
|
—
|
|
|
(200
|
)
|
|
(1,102
|
)
|
|||
Cash and cash equivalents at beginning of year
|
300
|
|
|
500
|
|
|
1,602
|
|
|||
Cash and cash equivalents at end of year
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
500
|
|
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, 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
|
|
Net income (loss)
|
—
|
|
|
1,243
|
|
|
(10
|
)
|
|
—
|
|
|
1,233
|
|
|||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||||
Return on power program appropriation investment
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Balance at September 30, 2016
|
$
|
258
|
|
|
$
|
7,594
|
|
|
$
|
580
|
|
|
$
|
(12
|
)
|
|
$
|
8,420
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
Note
|
Page No.
|
||
|
|||
|
|||
3
|
|
Accounts Receivable, Net
|
|
4
|
|
Inventories, Net
|
|
5
|
|
Net Completed Plant
|
|
6
|
|
Other Long-Term Assets
|
|
7
|
|
Regulatory Assets and Liabilities
|
|
8
|
|
Business Combinations and Settlement of Preexisting Relationships
|
|
9
|
|
Variable Interest Entities
|
|
10
|
|
Other Long-Term Liabilities
|
|
11
|
|
Asset Retirement Obligations
|
|
12
|
|
Debt
and Other Obligations
|
|
13
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
14
|
|
Risk Management Activities and Derivative Transactions
|
|
15
|
|
Fair Value Measurements
|
|
16
|
|
Proprietary Capital
|
|
17
|
|
Other Income (Expense), Net
|
|
18
|
|
Supplemental Cash Flow Information
|
|
19
|
|
Benefit Plans
|
|
20
|
|
Commitments and Contingencies
|
|
21
|
|
Related Parties
|
|
22
|
|
Unaudited Quarterly Financial Information
|
•
|
Nuclear liability insurance; nuclear property, decommissioning, and decontamination insurance; and nuclear accidental outage insurance. See
Note 20
—
Contingencies
—
Nuclear Insurance
.
|
•
|
Excess liability insurance for aviation, auto, marine, and general liability exposures.
|
•
|
Property insurance for certain conventional (non-nuclear) assets.
|
Standard
|
|
Description
|
|
Effective Date for TVA
|
|
Effect on the Financial Statements or Other Significant Matters
|
Debt Issuance Costs
|
|
This guidance changes the presentation of debt issuance costs in financial statements. This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction of that debt liability, consistent with debt discounts, including retrospectively adjusting all prior periods presented. The guidance does not change the recognition and measurement of debt issuance costs.
|
|
Early adopted on October 1, 2015
|
|
In the consolidated balance sheets, TVA reclassified $80 million of debt issuance costs previously presented in Other long-term assets on the September 30, 2015 Consolidated Balance Sheet and presented these amounts as a reduction to Long-term power bonds, net and Long-term debt of variable interest entities, net.
|
Derivatives and Hedging
|
|
This guidance clarifies that the novation of a derivative contract in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. Hedge accounting relationships could continue as long as all other hedge accounting criteria continue to be met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contracts is considered.
|
|
Prospectively early adopted on April 1, 2016
|
|
The adoption of the standard did not materially impact TVA's financial condition, results of operations, or cash flows.
|
Standard
|
|
Description
|
|
Effective Date for TVA
|
|
Effect on the Financial Statements or Other Significant Matters
|
Revenue Recognition
|
|
This guidance applies to revenue from contracts with customers. The standard requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued a one-year deferral of the effective date. The new effective date allows for either a full retrospective or a modified retrospective application. Early adoption is permitted.
|
|
October 1, 2018
|
|
TVA is currently evaluating the potential impact of these changes on its consolidated financial statements and related disclosures and the application method to be used.
|
Consolidation
|
|
This guidance amends the consolidation analysis for VIEs as well as voting interest entities. The standard reduces the number of consolidation models through the elimination of the indefinite deferral for certain entities that was previously allowed and places more emphasis on risk of loss when determining a controlling financial interest. This guidance allows for either a full retrospective or a modified retrospective application.
|
|
October 1, 2016
|
|
TVA has evaluated the impact of adopting this guidance and expects no material impact on TVA's financial condition, results of operations, or cash flows.
|
Inventory Valuation
|
|
This guidance changes the model used for the subsequent measurement of inventory from the previous lower of cost or market model to the lower of cost or net realizable value. The guidance applies only to inventory valued using methods other than last-in, first out or the retail inventory method (for example, first-in, first-out or average cost). This amendment is intended to simplify the subsequent measurement of inventory. When the standard becomes effective, it will include interim periods within the fiscal year that begins on that date, and will be required to be applied prospectively. Early adoption is permitted.
|
|
October 1, 2017
|
|
TVA is currently evaluating the potential impact of these changes on its consolidated financial statements.
|
Lease Accounting
|
|
This guidance changes the provisions of recognition in both the lessee and lessor accounting models. The standard requires entities that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance (similar to current capital leases) or operating lease. However, unlike current lease accounting rules — which require only capital leases to be recognized on the balance sheet — the new standard will require both types of leases to be recognized on the balance sheet. Operating leases will result in straight-line expense, while finance leases will result in recognition of interest on the lease liability separate from amortization expense. The accounting for the owner of the assets leased by the lessee — also known as lessor accounting — will remain largely unchanged from current lease accounting rules. When the standard becomes effective, it will include interim periods within that fiscal year, and will be required to be applied using a modified retrospective transition. Early adoption is permitted.
|
|
October 1, 2019
|
|
TVA is currently evaluating the potential impact of these changes on its consolidated financial statements and related disclosures.
|
Inventories, Net
At September 30
|
|||||||
|
2016
|
|
2015
|
||||
Materials and supplies inventory
|
$
|
673
|
|
|
$
|
651
|
|
Fuel inventory
|
345
|
|
|
414
|
|
||
Emission allowance inventory, net
|
14
|
|
|
13
|
|
||
Allowance for inventory obsolescence
|
(39
|
)
|
|
(47
|
)
|
||
Inventories, net
|
$
|
993
|
|
|
$
|
1,031
|
|
Net Completed Plant
At September 30
|
|||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Cost
|
|
Accumulated Depreciation
|
|
Net
|
|
Cost
|
|
Accumulated Depreciation
|
|
Net
|
||||||||||||
Coal-fired
|
$
|
15,587
|
|
|
$
|
10,473
|
|
|
$
|
5,114
|
|
|
$
|
15,202
|
|
|
$
|
9,942
|
|
|
$
|
5,260
|
|
Gas and oil-fired
|
3,918
|
|
|
1,267
|
|
|
2,651
|
|
|
3,794
|
|
|
1,194
|
|
|
2,600
|
|
||||||
Nuclear
|
19,280
|
|
|
10,422
|
|
|
8,858
|
|
|
18,920
|
|
|
10,063
|
|
|
8,857
|
|
||||||
Transmission
|
7,061
|
|
|
2,975
|
|
|
4,086
|
|
|
6,803
|
|
|
2,823
|
|
|
3,980
|
|
||||||
Hydroelectric
|
2,891
|
|
|
932
|
|
|
1,959
|
|
|
2,702
|
|
|
911
|
|
|
1,791
|
|
||||||
Other electrical plant
|
1,857
|
|
|
1,126
|
|
|
731
|
|
|
1,678
|
|
|
997
|
|
|
681
|
|
||||||
Subtotal
|
50,594
|
|
|
27,195
|
|
|
23,399
|
|
|
49,099
|
|
|
25,930
|
|
|
23,169
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Multipurpose dams
|
928
|
|
|
379
|
|
|
549
|
|
|
928
|
|
|
371
|
|
|
557
|
|
||||||
Other stewardship
|
42
|
|
|
18
|
|
|
24
|
|
|
42
|
|
|
17
|
|
|
25
|
|
||||||
Subtotal
|
970
|
|
|
397
|
|
|
573
|
|
|
970
|
|
|
388
|
|
|
582
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
51,564
|
|
|
$
|
27,592
|
|
|
$
|
23,972
|
|
|
$
|
50,069
|
|
|
$
|
26,318
|
|
|
$
|
23,751
|
|
Other Long-Term Assets
At September 30
|
|||||||
|
2016
|
|
2015
|
||||
EnergyRight
®
receivables
|
$
|
112
|
|
|
$
|
124
|
|
Loans and other long-term receivables, net
|
136
|
|
|
126
|
|
||
Commodity contract derivative assets
|
3
|
|
|
1
|
|
||
Prepaid capacity payments
|
42
|
|
|
52
|
|
||
Currency swap assets, net
|
—
|
|
|
25
|
|
||
Other
|
93
|
|
|
75
|
|
||
Total other long-term assets
|
$
|
386
|
|
|
$
|
403
|
|
Regulatory Assets and Liabilities
At September 30
|
|||||||
|
2016
|
|
2015
|
||||
Current regulatory assets
|
|
|
|
||||
Deferred nuclear generating units
|
$
|
237
|
|
|
$
|
237
|
|
Unrealized losses on commodity derivatives
|
122
|
|
|
162
|
|
||
Environmental agreements
|
34
|
|
|
47
|
|
||
Environmental cleanup costs – Kingston ash spill
|
42
|
|
|
43
|
|
||
Fuel cost adjustment receivable
|
98
|
|
|
15
|
|
||
Other current regulatory assets
|
3
|
|
|
2
|
|
||
Total current regulatory assets
|
536
|
|
|
506
|
|
||
|
|
|
|
||||
Non-current regulatory assets
|
|
|
|
|
|
||
Deferred pension costs and other post-retirement benefits costs
|
5,385
|
|
|
5,565
|
|
||
Unrealized losses on interest rate derivatives
|
1,547
|
|
|
1,236
|
|
||
Nuclear decommissioning costs
|
938
|
|
|
1,003
|
|
||
Environmental cleanup costs - Kingston ash spill
|
299
|
|
|
348
|
|
||
Non-nuclear decommissioning costs
|
819
|
|
|
828
|
|
||
Deferred nuclear generating units
|
850
|
|
|
1,042
|
|
||
Environmental agreements
|
18
|
|
|
55
|
|
||
Unrealized losses on commodity derivatives
|
56
|
|
|
63
|
|
||
Other non-current regulatory assets
|
252
|
|
|
278
|
|
||
Total non-current regulatory assets
|
10,164
|
|
|
10,418
|
|
||
Total regulatory assets
|
$
|
10,700
|
|
|
$
|
10,924
|
|
|
|
|
|
||||
Current regulatory liabilities
|
|
|
|
|
|
||
Fuel cost adjustment tax equivalents
|
$
|
148
|
|
|
$
|
164
|
|
Unrealized gains on commodity derivatives
|
6
|
|
|
—
|
|
||
Total current regulatory liabilities
|
154
|
|
|
164
|
|
||
Non-current regulatory liabilities
|
|
|
|
|
|
||
Unrealized gains on commodity derivatives
|
3
|
|
|
2
|
|
||
Total non-current regulatory liabilities
|
3
|
|
|
2
|
|
||
Total regulatory liabilities
|
$
|
157
|
|
|
$
|
166
|
|
Summary of Impact of VIEs on Consolidated Balance Sheets
At September 30
|
|||||||
|
2016
|
|
2015
|
||||
Current liabilities
|
|
|
|
|
|||
Accrued interest
|
$
|
11
|
|
|
$
|
12
|
|
Accounts payable and accrued liabilities
|
2
|
|
|
2
|
|
||
Current maturities of long-term debt of variable interest entities
|
35
|
|
|
33
|
|
||
Total current liabilities
|
48
|
|
|
47
|
|
||
Other liabilities
|
|
|
|
||||
Other long-term liabilities
|
33
|
|
|
35
|
|
||
Long-term debt, net
|
|
|
|
||||
Long-term debt of variable interest entities, net
|
1,199
|
|
|
1,233
|
|
||
Total liabilities
|
$
|
1,280
|
|
|
$
|
1,315
|
|
Other Long-Term Liabilities
At September 30
|
|||||||
|
2016
|
|
2015
|
||||
Interest rate swap liabilities
|
$
|
1,938
|
|
|
$
|
1,627
|
|
Capital lease obligations
|
177
|
|
|
100
|
|
||
Currency swap liabilities
|
162
|
|
|
47
|
|
||
EnergyRight® financing obligation
|
130
|
|
|
148
|
|
||
Environmental agreements liability
|
18
|
|
|
55
|
|
||
Membership interests of VIE subject to mandatory redemption
|
33
|
|
|
35
|
|
||
Commodity contract derivative liabilities
|
49
|
|
|
17
|
|
||
Regulatory liabilities
|
3
|
|
|
2
|
|
||
Commodity swap derivative liabilities
|
2
|
|
|
10
|
|
||
Other
|
264
|
|
|
180
|
|
||
Total other long-term liabilities
|
$
|
2,776
|
|
|
$
|
2,221
|
|
|
September 30
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Amount outstanding - discount notes
|
$
|
1,407
|
|
|
$
|
1,034
|
|
|
$
|
596
|
|
|
|
|
|
|
|
||||||
Weighted average interest rate - discount notes
|
0.203
|
%
|
|
0.055
|
%
|
|
0.002
|
%
|
Debt Securities Activity
For the years ended September 30
|
||||||||
|
|
2016
|
|
2015
|
||||
Issues
|
|
|
|
|
||||
2015 Series A
(1)
|
|
$
|
—
|
|
|
$
|
1,000
|
|
Discount on debt issues
|
|
—
|
|
|
(27
|
)
|
||
Total
|
|
$
|
—
|
|
|
$
|
973
|
|
|
|
|
|
|
||||
Acquisitions
|
|
|
|
|
||||
Notes payable
(2)
|
|
$
|
78
|
|
|
$
|
—
|
|
Total
|
|
$
|
78
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Redemptions/Maturities
(3)
|
|
|
|
|
||||
Variable interest entities
|
|
$
|
33
|
|
|
$
|
32
|
|
Notes payable
|
|
3
|
|
|
—
|
|
||
electronotes
®
|
|
47
|
|
|
62
|
|
||
1998 Series D
|
|
—
|
|
|
50
|
|
||
1999 Series A
|
|
—
|
|
|
38
|
|
||
2005 Series B
|
|
—
|
|
|
1,000
|
|
||
2009 Series A
|
|
2
|
|
|
3
|
|
||
2009 Series B
|
|
27
|
|
|
27
|
|
||
Total
|
|
$
|
112
|
|
|
$
|
1,212
|
|
Short-Term Debt
At September 30
|
||||||||||||||
CUSIP or Other Identifier |
|
Maturity |
|
Call/(Put) Date
|
|
Coupon Rate |
|
2016
|
|
2015
|
||||
Short-term debt, net of discounts
|
|
|
|
|
|
|
|
$
|
1,407
|
|
|
$
|
1,034
|
|
Current maturities of long-term debt of variable interest entities issued at par
|
|
|
|
|
|
|
|
35
|
|
|
33
|
|
||
Current maturities of notes payable
|
|
|
|
|
|
|
|
27
|
|
|
—
|
|
||
Current maturities of power bonds issued at par
|
|
|
|
|
|
|
|
|
|
|
||||
880591EE8
|
|
11/15/2015
|
|
|
|
2.250%
|
|
—
|
|
|
2
|
|
||
880591EF5
|
|
12/15/2016
|
|
|
|
3.770%
|
|
28
|
|
|
27
|
|
||
88059TEL1
|
|
11/15/2016
|
|
|
|
2.650%
|
|
3
|
|
|
3
|
|
||
880591DS8
|
|
12/15/2016
|
|
|
|
4.875%
|
|
524
|
|
|
—
|
|
||
880591EA6
|
|
7/18/2017
|
|
|
|
5.500%
|
|
1,000
|
|
|
—
|
|
||
Total current maturities of power bonds issued at par
|
|
|
|
|
|
|
|
1,555
|
|
|
32
|
|
||
Total current debt outstanding, net
|
|
|
|
|
|
|
|
$
|
3,024
|
|
|
$
|
1,099
|
|
Long-Term Debt
(1)
At September 30
|
||||||||||||||||
CUSIP or Other Identifier |
|
Maturity |
|
Coupon
Rate |
|
Call Date
|
|
2016 Par
|
|
2015 Par
|
|
Stock Exchange Listings
|
||||
electronotes
®(2)
|
|
05/15/2020 -
02/15/2043
|
|
2.375 - 4.375%
|
|
2/15/2015 -
02/15/2018
|
|
$
|
278
|
|
|
$
|
325
|
|
|
None
|
880591DS8
|
|
12/15/2016
|
|
4.875%
|
|
|
|
—
|
|
|
524
|
|
|
New York
|
||
880591EA6
|
|
7/18/2017
|
|
5.500%
|
|
|
|
—
|
|
|
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%
|
(3)
|
|
|
260
|
|
|
303
|
|
|
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
(4)
|
|
6/1/2028
|
|
3.550%
|
|
|
|
273
|
|
|
274
|
|
|
New York
|
||
880591409
(4)
|
|
5/1/2029
|
|
3.360%
|
|
|
|
232
|
|
|
232
|
|
|
New York
|
||
880591DM1
|
|
5/1/2030
|
|
7.125%
|
|
|
|
1,000
|
|
|
1,000
|
|
|
New York, Luxembourg
|
||
880591DP4
|
|
6/7/2032
|
|
6.587%
|
(3)
|
|
|
324
|
|
|
378
|
|
|
New York, Luxembourg
|
||
880591DV1
|
|
7/15/2033
|
|
4.700%
|
|
|
|
472
|
|
|
472
|
|
|
New York, Luxembourg
|
||
880591EF5
(5)
|
|
6/15/2034
|
|
3.770%
|
|
|
|
332
|
|
|
360
|
|
|
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%
|
(3)
|
|
|
195
|
|
|
227
|
|
|
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
|
|
|
1,000
|
|
|
New York
|
||
Subtotal
|
|
|
|
|
|
|
|
21,063
|
|
|
22,792
|
|
|
|
Unamortized discounts, premiums, issue costs, and other
|
|
|
|
|
|
|
|
(162
|
)
|
|
(175
|
)
|
|
|
||
Total long-term outstanding power bonds, net
|
|
|
|
|
|
|
|
20,901
|
|
|
22,617
|
|
|
|
||
Long-term debt of variable interest entities, net
|
|
|
|
|
|
|
|
1,199
|
|
|
1,233
|
|
|
|
||
Long-term notes payable
|
|
|
|
|
|
|
|
48
|
|
|
—
|
|
|
|
||
Total long-term debt, net
|
|
|
|
|
|
|
|
$
|
22,148
|
|
|
$
|
23,850
|
|
|
|
Maturities Due in the Year Ending September 30
|
|||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term power bonds, long-term debt of variable interest entities and notes payable including current maturities
(1)
|
$
|
1,617
|
|
|
$
|
1,745
|
|
|
$
|
1,091
|
|
|
$
|
70
|
|
|
$
|
1,901
|
|
|
$
|
17,665
|
|
|
$
|
24,089
|
|
Short-term debt, net of discounts
|
1,407
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,407
|
|
Summary of Long-Term Credit Facilities
At September 30, 2016
(in billions)
|
|||||||||||||||
Maturity Date
|
Facility Limit
|
|
Letters of Credit Outstanding
|
|
Cash Borrowings
|
|
Availability
|
||||||||
February 2020
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
June 2020
|
1.0
|
|
|
0.4
|
|
|
—
|
|
|
0.6
|
|
||||
September 2020
|
1.0
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Total
|
$
|
2.5
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
Summary of Derivative Instruments That Receive Hedge Accounting Treatment (part 1)
Amount of Mark-to-Market Gain (Loss) Recognized in Other Comprehensive Income (Loss)
For the years ended September 30
|
||||||||||||
|
|
|
|
|
|
|
||||||
Derivatives in Cash Flow Hedging Relationship
|
|
Objective of Hedge Transaction
|
|
Accounting for Derivative
Hedging Instrument
|
|
2016
|
|
2015
|
||||
Currency swaps
|
|
To protect against changes in cash flows caused by changes in foreign currency exchange rates (exchange rate risk)
|
|
Unrealized gains and losses are recorded in AOCI and reclassified to interest expense to the extent they are offset by gains and losses on the hedged transaction
|
|
$
|
(139
|
)
|
|
$
|
(72
|
)
|
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
|
|
2016
|
|
2015
|
||||
Currency swaps
|
|
$
|
(129
|
)
|
|
$
|
(65
|
)
|
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
|
|
2016
|
|
2015
|
||||
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.
|
|
$
|
(109
|
)
|
|
$
|
(114
|
)
|
|
|
|
|
|
|
|
|
|
||||
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.
|
|
(94
|
)
|
|
(98
|
)
|
Fair Values of TVA Derivatives
At September 30
|
|||||||||||
|
2016
|
|
2015
|
||||||||
Derivatives That Receive Hedge Accounting Treatment:
|
|||||||||||
|
Balance
|
|
Balance Sheet Presentation
|
|
Balance
|
|
Balance Sheet Presentation
|
||||
Currency swaps
|
|
|
|
|
|
|
|
||||
£200 million Sterling
|
$
|
(82
|
)
|
|
Other long-term liabilities
|
|
$
|
(41
|
)
|
|
Other long-term liabilities
|
£250 million Sterling
|
(41
|
)
|
|
Other long-term liabilities
|
|
25
|
|
|
Other long-term assets
|
||
£150 million Sterling
|
(39
|
)
|
|
Other long-term liabilities
|
|
(6
|
)
|
|
Other long-term liabilities
|
||
|
|
|
|
|
|
|
|
||||
Derivatives That Do Not Receive Hedge Accounting Treatment:
|
|||||||||||
|
Balance
|
|
Balance Sheet Presentation
|
|
Balance
|
|
Balance Sheet Presentation
|
||||
Interest rate swaps
|
|
|
|
|
|
|
|
||||
$1.0 billion notional
|
$
|
(1,387
|
)
|
|
Other long-term liabilities
|
|
$
|
(1,177
|
)
|
|
Other long-term liabilities
|
$476 million notional
|
(539
|
)
|
|
Other long-term liabilities
|
|
(438
|
)
|
|
Other long-term liabilities
|
||
$42 million notional
|
(12
|
)
|
|
Other long-term liabilities
|
|
(12
|
)
|
|
Other long-term liabilities
|
||
Commodity contract derivatives
|
(125
|
)
|
|
Other current assets $6; Other long-term assets $3; Other long-term liabilities $(49); Accounts payable and accrued liabilities $(85)
|
|
(97
|
)
|
|
Other long-term assets $1; Other long-term liabilities $(17); Accounts payable and accrued liabilities $(81)
|
||
FTP
|
|
|
|
|
|
|
|
||||
Derivatives under FTP
(1)
|
(39
|
)
|
|
Other current assets $(30); Other long-term liabilities $(2); Accounts payable and accrued liabilities $(7)
|
|
(116
|
)
|
|
Other current assets $(89); Other long-term liabilities $(10); Accounts payable and accrued liabilities $(17)
|
Currency Swaps Outstanding
At September 30, 2016
|
||||||
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
|
|||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Number of
Contracts
|
|
Notional Amount
|
|
Fair Value (MtM)
|
|
Number of Contracts
|
|
Notional Amount
|
|
Fair Value
(
MtM
)
|
||||
Coal contract derivatives
|
20
|
|
20 million tons
|
|
$
|
(127
|
)
|
|
14
|
|
19 million tons
|
|
$
|
(98
|
)
|
Natural gas contract derivatives
|
39
|
|
148 million mmBtu
|
|
$
|
2
|
|
|
33
|
|
134 million mmBtu
|
|
$
|
1
|
|
Financial Trading Program Realized Gains (Losses)
For the years ended September 30
|
||||||||
|
|
|
|
|
||||
Decrease (increase) in purchased power expense
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
Natural gas
|
|
$
|
(19
|
)
|
|
$
|
(20
|
)
|
|
As of September 30, 2016
|
||||||||||
|
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
|
|
|
|
|
|
||||||
Commodity derivatives under FTP
|
$
|
6
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Total derivatives subject to master netting or similar arrangement
|
6
|
|
|
(6
|
)
|
|
—
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
9
|
|
|
—
|
|
|
9
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
15
|
|
|
$
|
(6
|
)
|
|
$
|
9
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Currency swap(s)
(3)
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
162
|
|
Interest rate swaps
(3)
|
1,938
|
|
|
—
|
|
|
1,938
|
|
|||
Commodity derivatives under FTP
|
45
|
|
|
(36
|
)
|
|
9
|
|
|||
Total derivatives subject to master netting or similar arrangement
|
2,145
|
|
|
(36
|
)
|
|
2,109
|
|
|||
Total derivatives not subject to master netting or similar arrangement
|
134
|
|
|
—
|
|
|
134
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
2,279
|
|
|
$
|
(36
|
)
|
|
$
|
2,243
|
|
|
|
|
|
|
|
||||||
|
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)
|
$
|
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)
(3)
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Interest rate swaps
(3)
|
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
|
|
•
|
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, 2016
|
|||||||||||||||
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
|
$
|
196
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196
|
|
Government debt securities
|
88
|
|
|
36
|
|
|
—
|
|
|
124
|
|
||||
Corporate debt securities
|
—
|
|
|
393
|
|
|
—
|
|
|
393
|
|
||||
Mortgage and asset-backed securities
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
Institutional mutual funds
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
||||
Forward debt securities contracts
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Private equity funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
132
|
|
||||
Private real estate funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
||||
Commingled funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,142
|
|
||||
Total investments
|
376
|
|
|
494
|
|
|
—
|
|
|
2,257
|
|
||||
Currency swap(s)
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity contract derivatives
|
—
|
|
|
5
|
|
|
4
|
|
|
9
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|||||||
Swap contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
376
|
|
|
$
|
499
|
|
|
$
|
4
|
|
|
$
|
2,266
|
|
|
|
|
|
|
|
|
|
||||||||
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)
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
162
|
|
Interest rate swaps
|
—
|
|
|
1,938
|
|
|
—
|
|
|
1,938
|
|
||||
Commodity contract derivatives
|
—
|
|
|
3
|
|
|
131
|
|
|
134
|
|
||||
Commodity derivatives under FTP
(2)
|
|
|
|
|
|
|
|
|
|||||||
Swap contracts
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
—
|
|
|
$
|
2,112
|
|
|
$
|
131
|
|
|
$
|
2,243
|
|
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
|
|
Government debt securities
|
203
|
|
|
31
|
|
|
—
|
|
|
234
|
|
||||
Corporate debt securities
|
—
|
|
|
225
|
|
|
—
|
|
|
225
|
|
||||
Mortgage and asset-backed securities
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
||||
Institutional mutual funds
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||
Forward debt securities contracts
|
—
|
|
|
(59
|
)
|
|
—
|
|
|
(59
|
)
|
||||
Private equity funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
||||
Private real estate funds measured at net asset value
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
||||
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
|
|
|
$
|
276
|
|
|
$
|
—
|
|
|
$
|
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
|
|
Estimated Values of Financial Instruments Not Recorded at Fair Value
|
|||||||||||||||||
|
|
|
At September 30, 2016
|
|
At September 30, 2015
|
||||||||||||
|
Valuation Classification
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
EnergyRight
®
receivables (including current portion)
|
Level 2
|
|
$
|
141
|
|
|
$
|
144
|
|
|
$
|
156
|
|
|
$
|
162
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans and other long-term receivables, net (including current portion)
|
Level 2
|
|
$
|
141
|
|
|
$
|
130
|
|
|
$
|
129
|
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EnergyRight
®
purchase obligation (including current portion)
|
Level 2
|
|
$
|
163
|
|
|
$
|
183
|
|
|
$
|
185
|
|
|
$
|
208
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Unfunded loan commitments
|
Level 2
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Membership interests of variable interest entity subject to mandatory redemption (including current portion)
|
Level 2
|
|
$
|
35
|
|
|
$
|
46
|
|
|
$
|
37
|
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term outstanding power bonds (including current maturities), net
|
Level 2
|
|
$
|
22,456
|
|
|
$
|
28,620
|
|
|
$
|
22,649
|
|
|
$
|
25,468
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt of variable interest entities (including current maturities), net
|
Level 2
|
|
$
|
1,234
|
|
|
$
|
1,468
|
|
|
$
|
1,266
|
|
|
$
|
1,407
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term notes payable (including current maturities)
|
Level 2
|
|
$
|
75
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Summary of Proprietary Capital Activity
At or for the years ended September 30
|
|||||||||||||||
|
2016
|
|
2015
|
||||||||||||
Appropriation Investment
|
Power Program
|
|
Nonpower
Programs
|
|
Power Program
|
|
Nonpower
Programs
|
||||||||
Balance at beginning of year
|
$
|
258
|
|
|
$
|
4,351
|
|
|
$
|
258
|
|
|
$
|
4,351
|
|
Return of power program appropriation investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of year
|
258
|
|
|
4,351
|
|
|
258
|
|
|
4,351
|
|
||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of year
|
6,357
|
|
|
(3,761
|
)
|
|
5,240
|
|
|
(3,750
|
)
|
||||
Net income (expense) for year
|
1,243
|
|
|
(10
|
)
|
|
1,122
|
|
|
(11
|
)
|
||||
Return on power program appropriation investment
|
(6
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Balance at end of year
|
7,594
|
|
|
(3,771
|
)
|
|
6,357
|
|
|
(3,761
|
)
|
||||
Net proprietary capital at September 30
|
$
|
7,852
|
|
|
$
|
580
|
|
|
$
|
6,615
|
|
|
$
|
590
|
|
Obligations and Funded Status
For the years ended September 30
|
|||||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
12,824
|
|
|
$
|
12,265
|
|
|
$
|
657
|
|
|
$
|
652
|
|
Service cost
|
133
|
|
|
130
|
|
|
16
|
|
|
16
|
|
||||
Interest cost
|
564
|
|
|
540
|
|
|
29
|
|
|
29
|
|
||||
Plan participants’ contributions
|
25
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Collections
(1)
|
—
|
|
|
—
|
|
|
92
|
|
|
94
|
|
||||
Actuarial loss (gain)
|
1,188
|
|
|
556
|
|
|
68
|
|
|
3
|
|
||||
Plan change
|
(960
|
)
|
|
—
|
|
|
(158
|
)
|
|
—
|
|
||||
Net transfers from variable fund/401(k) plan
|
7
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||
Expenses paid
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(692
|
)
|
|
(697
|
)
|
|
(133
|
)
|
|
(137
|
)
|
||||
Benefit obligation at end of year
|
13,083
|
|
|
12,824
|
|
|
571
|
|
|
657
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of net plan assets at beginning of year
|
6,797
|
|
|
7,507
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
733
|
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
||||
Plan participants’ contributions
|
25
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Collections
(1)
|
—
|
|
|
—
|
|
|
92
|
|
|
94
|
|
||||
Net transfers from variable fund/401(k) plan
|
7
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
(2)
|
281
|
|
|
282
|
|
|
41
|
|
|
43
|
|
||||
Expenses paid
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(692
|
)
|
|
(697
|
)
|
|
(133
|
)
|
|
(137
|
)
|
||||
Fair value of net plan assets at end of year
|
7,145
|
|
|
6,797
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Funded status
|
$
|
(5,938
|
)
|
|
$
|
(6,027
|
)
|
|
$
|
(571
|
)
|
|
$
|
(657
|
)
|
Amounts Recognized on TVA's Consolidated Balance Sheets
At September 30
|
|||||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Regulatory assets
|
$
|
5,336
|
|
|
$
|
5,425
|
|
|
$
|
49
|
|
|
$
|
140
|
|
Accounts payable and accrued liabilities
|
(5
|
)
|
|
(6
|
)
|
|
(35
|
)
|
|
(37
|
)
|
||||
Pension and post-retirement benefit obligations
(1)
|
(5,933
|
)
|
|
(6,021
|
)
|
|
(536
|
)
|
|
(620
|
)
|
Post-Retirement Benefit Costs Deferred as Regulatory Assets
At September 30
|
|||||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Unrecognized prior service credit
|
$
|
(1,017
|
)
|
|
$
|
(158
|
)
|
|
$
|
(185
|
)
|
|
$
|
(33
|
)
|
Unrecognized net loss
|
5,946
|
|
|
5,355
|
|
|
234
|
|
|
173
|
|
||||
Amount capitalized due to actions of regulator
|
407
|
|
|
228
|
|
|
—
|
|
|
—
|
|
||||
Total regulatory assets
|
$
|
5,336
|
|
|
$
|
5,425
|
|
|
$
|
49
|
|
|
$
|
140
|
|
Components of Net Periodic Benefit Cost
For the years ended September 30
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Service cost
|
$
|
133
|
|
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
18
|
|
Interest cost
|
564
|
|
|
540
|
|
|
558
|
|
|
29
|
|
|
29
|
|
|
32
|
|
||||||
Expected return on plan assets
|
(446
|
)
|
|
(437
|
)
|
|
(435
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
(23
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||||
Recognized net actuarial loss
|
310
|
|
|
299
|
|
|
285
|
|
|
7
|
|
|
9
|
|
|
11
|
|
||||||
Curtailment
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net periodic benefit cost as actuarially determined
|
460
|
|
|
511
|
|
|
517
|
|
|
46
|
|
|
48
|
|
|
55
|
|
||||||
Amount capitalized due to actions of regulator
|
(179
|
)
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net period benefit cost
|
$
|
281
|
|
|
$
|
283
|
|
|
$
|
517
|
|
|
$
|
46
|
|
|
$
|
48
|
|
|
$
|
55
|
|
Actuarial Assumptions
|
|||||||||||
|
Pension Benefits
|
|
Other Post-Retirement Benefits
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Assumptions utilized to determine benefit obligations at September 30
|
|
|
|
|
|
|
|
||||
Discount rate
|
3.65
|
%
|
|
4.50
|
%
|
|
3.70
|
%
|
|
4.65
|
%
|
Rate of compensation increase
|
5.55
|
%
|
|
5.70
|
%
|
|
N/A
|
|
|
N/A
|
|
Pre-Medicare eligible
|
|
|
|
|
|
|
|
||||
Initial health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
6.50
|
%
|
|
7.00
|
%
|
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
|
|
Post-Medicare eligible
|
|
|
|
|
|
|
|
||||
Initial health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
—
|
%
|
|
7.00
|
%
|
Ultimate health care cost trend rate
|
N/A
|
|
|
N/A
|
|
|
4.00
|
%
|
|
5.00
|
%
|
Ultimate trend rate is reached in year beginning
|
N/A
|
|
|
N/A
|
|
|
2021
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
||||
Assumptions utilized to determine net periodic benefit cost for the years ended September 30
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
4.50
|
%
|
|
4.45
|
%
|
|
4.65
|
%
|
|
4.50
|
%
|
Expected return on plan assets
|
7.00
|
%
|
|
7.00
|
%
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
5.70
|
%
|
|
5.70
|
%
|
|
N/A
|
|
|
N/A
|
|
Pre-Medicare eligible
|
|
|
|
|
|
|
|
||||
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
|
|
Post-Medicare eligible
|
|
|
|
|
|
|
|
||||
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
|
|
Asset Holdings of TVARS
At September 30
|
|||||||||
|
|
|
|
Plan Assets at September 30
|
|||||
Asset Category
|
|
Target Allocation
|
|
2016
|
|
2015
|
|||
Global public equity
|
|
39
|
%
|
|
44
|
%
|
|
43
|
%
|
Private equity
|
|
8
|
%
|
|
4
|
%
|
|
5
|
%
|
Safety oriented fixed income
|
|
15
|
%
|
|
18
|
%
|
|
19
|
%
|
Opportunistic fixed income
|
|
15
|
%
|
|
10
|
%
|
|
10
|
%
|
Public real assets
|
|
15
|
%
|
|
15
|
%
|
|
14
|
%
|
Private real assets
|
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
TVA Retirement System
At September 30, 2016
|
|||||||||||||||
|
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
|
$
|
1,847
|
|
|
$
|
1,846
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred securities
|
20
|
|
|
3
|
|
|
17
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate debt securities
|
1,145
|
|
|
—
|
|
|
1,135
|
|
|
10
|
|
||||
Residential mortgage-backed securities
|
181
|
|
|
—
|
|
|
165
|
|
|
16
|
|
||||
Debt securities issued by U.S. Treasury and other U.S. government agencies
|
113
|
|
|
113
|
|
|
—
|
|
|
—
|
|
||||
Debt securities issued by foreign governments
|
332
|
|
|
—
|
|
|
299
|
|
|
33
|
|
||||
Asset-backed securities
|
118
|
|
|
—
|
|
|
87
|
|
|
31
|
|
||||
Debt securities issued by state/local governments
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
44
|
|
|
—
|
|
|
38
|
|
|
6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Commingled funds measured at net asset value
(3)
|
|
|
|
|
|
|
|
|
|||||||
Equity
|
682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Debt
|
653
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodities
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Blended
|
225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Institutional mutual funds
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Cash equivalents and other short-term investments
|
612
|
|
|
41
|
|
|
571
|
|
|
—
|
|
||||
Certificates of deposit
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Private equity measured at net asset value
(3)
|
385
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Private real estate measured at net asset value
(3)
|
568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Treasury bills, U.S. Government notes, and securities held as futures and other derivative collateral
|
13
|
|
|
4
|
|
|
9
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Securities lending commingled funds measured at net asset value
(3)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Futures
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Swaps
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Foreign currency forward receivable
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
$
|
7,293
|
|
|
$
|
2,019
|
|
|
$
|
2,359
|
|
|
$
|
97
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Futures
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward payable
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total return swaps
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Interest rate swaps
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Credit default swaps
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Liabilities
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
14
|
|
|
$
|
—
|
|
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 and other U.S. government agencies
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodities
|
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 measured at net asset value
(3)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Purchased options
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Foreign currency forward receivable
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
$
|
6,964
|
|
|
$
|
2,060
|
|
|
$
|
2,119
|
|
|
$
|
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
|
|
|
$
|
—
|
|
Estimated Future Benefits Payments
At September 30, 2016
|
|||||||
|
Pension
Benefits
(1)
|
|
Other Post-Retirement Benefits
|
||||
2017
|
$
|
770
|
|
|
$
|
35
|
|
2018
|
771
|
|
|
35
|
|
||
2019
|
774
|
|
|
33
|
|
||
2020
|
778
|
|
|
32
|
|
||
2021
|
780
|
|
|
30
|
|
||
2022 - 2026
|
$
|
3,876
|
|
|
$
|
132
|
|
Commitments and Contingencies
Payments due in the years ending September 30
|
||||||||||||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Membership interests of variable interest entity subject to mandatory redemption
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
23
|
|
|
$
|
35
|
|
Lease obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital
(1)
|
|
51
|
|
|
51
|
|
|
50
|
|
|
50
|
|
|
50
|
|
|
564
|
|
|
816
|
|
|||||||
Non-cancelable operating
(2)
|
|
43
|
|
|
32
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
13
|
|
|
163
|
|
|||||||
Purchase obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Power
(3)
|
|
254
|
|
|
265
|
|
|
266
|
|
|
246
|
|
|
244
|
|
|
1,541
|
|
|
2,816
|
|
|||||||
Fuel
(4)
|
|
1,312
|
|
|
917
|
|
|
569
|
|
|
324
|
|
|
327
|
|
|
1,006
|
|
|
4,455
|
|
|||||||
Other
(5)
|
|
88
|
|
|
65
|
|
|
58
|
|
|
47
|
|
|
34
|
|
|
604
|
|
|
896
|
|
|||||||
Unfunded loan commitments
|
|
9
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||||
Payments on other financings
|
|
76
|
|
|
76
|
|
|
75
|
|
|
73
|
|
|
207
|
|
|
26
|
|
|
533
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
|
$
|
1,835
|
|
|
$
|
1,412
|
|
|
$
|
1,045
|
|
|
$
|
768
|
|
|
$
|
890
|
|
|
$
|
3,777
|
|
|
$
|
9,727
|
|
•
|
No adjustments to Mr. Pardee’s compensation were made as he has communicated his intent to retire at the end of the calendar year.
|
•
|
The salary for Mr. Thomas will increase from $592,250 to $610,018. Additionally, Mr. Thomas was awarded a LTP grant of $750,000 effective October 1, 2016, which will vest on September 30, 2019. Mr. Thomas also received a LTR grant of $250,000 effective October 1, 2016, which will vest in three equal increments on September 30, 2017, September 30, 2018, and September 30, 2019, subject to his being employed through such dates.
|
•
|
The salary for Mr. Grimes will increase from $600,000 to $650,000. Additionally, Mr. Grimes was awarded a LTP grant of $750,000 effective October 1, 2016, which will vest on September 30, 2019. Mr. Grimes also received a LTR grant of $260,000 effective October 1, 2016, which will vest in three equal increments on September 30, 2017, September 30, 2018, and September 30, 2019, subject to his being employed through such dates.
|
•
|
The salary for Mr. Skaggs will increase from $471,700 to $495,285. Additionally, Mr. Skaggs was awarded a LTP grant of $750,000 effective October 1, 2016, which will vest on September 30, 2019. Mr. Skaggs also received a LTR grant of $250,000 effective October 1, 2016, which will vest in three equal increments on September 30, 2017, September 30, 2018, and September 30, 2019, subject to his being employed through such dates.
|
Directors
|
Age
|
Year Current Term Began
|
Year Term Expires
|
|
Joe H. Ritch, Chair
|
66
|
2013
|
2016
|
(1)
|
Marilyn A. Brown
|
67
|
2013
|
2017
|
|
V. Lynn Evans
|
63
|
2013
|
2017
|
|
Richard C. Howorth
|
65
|
2015
|
2020
|
|
C. Peter Mahurin
|
78
|
2013
|
2016
|
(1)
|
Michael R. McWherter
|
60
|
2013
|
2016
|
(1)
|
Virginia T. Lodge
|
66
|
2014
|
2019
|
|
Ronald A. Walter
|
67
|
2014
|
2019
|
|
Eric M. Satz
|
47
|
2015
|
2018
|
|
Executive Officers
|
Title
|
Age
|
Employment Commenced
|
William D. Johnson
|
President and Chief Executive Officer
|
62
|
2013
|
Joseph P. Grimes, Jr.
|
Executive Vice President, Generation and Chief Nuclear Officer
|
60
|
2013
|
Charles G. Pardee
|
Executive Vice President and Chief Operating Officer
|
56
|
2013
|
Michael D. Skaggs
|
Executive Vice President, Operations
|
56
|
1994
|
Sherry A. Quirk
|
Executive Vice President and General Counsel
|
62
|
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
|
56
|
1982
|
Janet J. Brewer
|
Senior Vice President and Chief Communications and Marketing Officer
|
57
|
2012
|
Susan E. Collins
|
Senior Vice President and Chief Human Resource Officer
|
50
|
2014
|
Diane T. Wear
|
Vice President and Controller (Principal Accounting Officer)
|
48
|
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.
|
•
|
Improved rate competitiveness;
|
•
|
Held
operating and maintenance ("O&M")
expense flat;
|
•
|
Improved performance of TVA's coal-fired and gas-fired generation units; and
|
•
|
Helped to retain and attract over 72,100 jobs and over $8.3 billion in capital investment to the TVA service area.
|
•
|
Eliminated $1.0 billion in annual expense over the performance period;
|
•
|
Improved reliability; and
|
•
|
Improved customer satisfaction and loyalty, stakeholder perception, and media tone.
|
•
|
The salary for Mr. Pardee increased 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, provided certain performance targets are achieved and he is still employed on this date. Mr. Pardee also received a LTR grant of $200,000 effective October 1, 2015, which will vest in three equal increments on September 30, 2016, 2017, and 2018, subject to his being employed through such dates.
|
•
|
The salary for Mr. Thomas increased 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, provided certain performance targets are achieved and he is still employed on this date. Mr. Thomas also received a LTR grant of $200,000 effective October 1, 2015, which will vest in three equal increments on September 30, 2016, 2017, and 2018, subject to his being employed through such dates.
|
•
|
The salary for Mr. Grimes increased 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, provided certain performance targets are achieved and he is still employed on this date. Mr. Grimes also received a LTR grant of $260,000 effective October 1, 2015, which will vest in three equal increments on September 30, 2016, 2017, and 2018, subject to his being employed through such dates.
|
•
|
The salary for Mr. Skaggs increased 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, provided certain performance targets are achieved and he is still employed on this date. Mr. Skaggs also received a LTR grant of $150,000 effective October 1, 2015, which will vest in three equal increments on September 30, 2016, 2017, and 2018, subject to his being employed through such dates.
|
•
|
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 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 of each Named Executive Officer’s direct compensation opportunity is delivered through performance-based incentive programs.
|
70 % of CEO Compensation Is At Risk
|
55 % of NEO* Compensation Is At Risk
|
|
* Named Executive Officers, excluding CEO
|
•
|
Align the organization’s short- and long-term goals and objectives with compensation opportunity by providing a mix of salary and performance-based short 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 ($160,300 in 2016); and
|
•
|
The CEO will determine the salary and benefits of employees whose annual salary is not greater than Level IV of the Executive Schedule ($160,300 in 2016).
|
•
|
The TVA Board has authorized the CEO to set or adjust compensation for present or future direct reports within compensation ranges of 80 percent to 110 percent of the targeted total direct compensation for comparable positions, 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.
|
DTE Energy Co.
|
NRG Energy, Inc.
|
American Electric Power Co., Inc.
|
Duke Energy Corp.
|
Pacific Gas and Electric Co.
|
Calpine Corp.
|
Edison International
|
PPL Corp.
|
CenterPoint Energy, Inc.
|
Entergy Corp.
|
Public Service Enterprise Group Inc.
|
CMS Energy Corp.
|
Exelon Corp.
|
Sempra Energy
|
Consolidated Edison, Inc.
|
FirstEnergy Corp.
|
Southern Company
|
Dominion Resources, Inc.
|
NextEra Energy, Inc.
|
Xcel Energy Inc.
|
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
|
Individual Performance Multiplier
(0% to 125%)
|
•
|
Safety performance better than top decile;
|
•
|
Strong financial performance driven by O&M efficiency; and
|
•
|
Strong economic development performance.
|
•
|
Mr. Johnson, in consultation with the Committee and with input from individual members of the TVA Board, evaluated the performance of Mr. Pardee during 2016. Mr. Johnson, with input from individual members of the TVA Board, determined that the award for Mr. Pardee would be adjusted downward by five percent because of mixed
|
•
|
Mr. Johnson, in consultation with the Committee and with input from individual members of the TVA Board, evaluated the performance of Mr. Thomas during 2016. Mr. Johnson, with input from individual members of the TVA Board, determined that the award for Mr. Thomas should be adjusted upward by 20 percent based on his strong strategic planning and direction setting and his role in TVA’s outstanding financial performance, including record net income and exceeding O&M objectives and reducing TFO obligations.
|
•
|
Mr. Johnson and Mr. Pardee, TVA’s Executive Vice President and Chief Operating Officer (to whom Mr. Grimes reported), evaluated Mr. Grimes’s performance during 2016. Based on this review, Mr. Johnson determined that Mr. Grimes’s award should be adjusted downward by five percent based on overall nuclear performance, including unit capability and Institute of Nuclear Power Operations Index impacts within the nuclear fleet and regulatory issues.
|
•
|
Mr. Johnson and Mr. Pardee evaluated Mr. Skaggs’s performance during 2016. Based on this review, Mr. Johnson determined that Mr. Skaggs’s award should be adjusted upward by 10 percent based on strong Watts Bar Unit 2 construction performance, and then also adjusted downward by five percent to reflect the impact of nuclear performance and regulatory issues.
|
2016 EAIP Payouts
|
|||||||||||||||
Named Executive Officers
|
|
Salary
|
|
Target EAIP
Incentive
Opportunity
(% of Salary)
|
|
Target
EAIP Payout
|
|
Adjusted Scorecard Results After Application of Corporate Multiplier
|
|
Individual Performance Multiplier
|
|
Actual EAIP Payment
|
|||
William D. Johnson
|
|
$995,000
|
|
150%
|
|
$1,492,500
|
|
105%
|
|
115%
|
|
$1,802,194
|
|||
Charles G. Pardee
|
|
664,350
|
|
|
80%
|
|
531,480
|
|
|
100%
|
|
95%
|
|
504,906
|
|
John M. Thomas, III
|
|
592,250
|
|
|
80%
|
|
473,800
|
|
|
105%
|
|
120%
|
|
596,988
|
|
Joseph P. Grimes, Jr.
|
|
600,000
|
|
|
80%
|
|
480,000
|
|
|
97%
|
|
95%
|
|
442,320
|
|
Michael D. Skaggs
|
|
471,700
|
|
|
70%
|
|
330,190
|
|
|
97%
|
|
105%
|
|
336,299
|
|
|
|
|
•
|
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 performance-based awards under the LTIP) 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"), the Long-Term Retention Incentive Plan ("LTRIP"), or retention awards under the LTIP 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).
|
•
|
Eliminated $1.0 billion in annual expense over the performance period;
|
•
|
Improved reliability; and
|
•
|
Improved customer satisfaction and loyalty, stakeholder perception, and media tone.
|
2014 - 2016 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
|
|
110%
|
$1,915,375
|
|
|||
Charles G. Pardee
|
664,350
|
|
125%
|
830,438
|
|
|
110%
|
913,482
|
|
|
John M. Thomas, III
|
592,250
|
|
120%
|
710,700
|
|
|
110%
|
781,770
|
|
|
Joseph P. Grimes, Jr.
|
600,000
|
|
110%
|
660,000
|
|
|
110%
|
726,000
|
|
|
Michael D. Skaggs
|
471,700
|
|
90%
|
424,530
|
|
|
110%
|
466,983
|
|
|
Performance Measure
|
Weight
|
Threshold
(50%)
|
Target
(100%)
|
Stretch
(150%)
|
Wholesale Rate Excluding Fuel
(1)
|
40%
|
Target + 2%
|
FY 2014 Business Plan for FY 2015 and FY 2016 Rates
FY 2015 Business Plan for FY 2017 Rate
|
Target - 2%
|
Load Not Served
(2)
|
30%
|
(99.999% reliability or better)
|
Top quartile
|
Better than top quartile
|
External Measures
(3)
|
30%
|
79.6
|
87.5
|
94.7
|
|
Performance Measure
|
Weight
|
Threshold
(50%)
|
Target
(100%)
|
Stretch
(150%)
|
Wholesale Rate Excluding Fuel
(1)
|
40%
|
Target + 2%
|
FY 2014 Business Plan for FY 2016 Rate
FY 2015 Business Plan for FY 2017 Rate
FY 2016 Business Plan for FY 2018 Rate
|
Target - 2%
|
Load Not Served
(2)
|
30%
|
(99.999% reliability or better)
|
Top quartile
|
Better than top quartile
|
External Measures
(3)
|
30%
|
80.0
|
88.0
|
95.5
|
|
CEO Peer Group Compensation Comparison
|
||||||||||
Compensation Component
|
TVA CEO Johnson
Actual Compensation
for 2016
|
|
TVA CEO Johnson
Compensation Opportunity for 2016
|
|
2016 Towers Watson Chief Executive Officer Median Market Data
(TVA Peer Group)
(1)
|
|||||
|
|
|
|
|
|
|||||
Base Salary
|
$995,000
|
(2
|
)
|
$995,000
|
|
$1,213,000
|
||||
|
|
|
|
|
|
|
||||
Total Annual Incentive
|
181
|
%
|
(3
|
)
|
150
|
%
|
(3
|
)
|
117
|
%
|
|
|
|
(target)
|
|
|
(target)
|
|
|||
Total Cash Compensation ("TCC")
|
$2,804,848
|
(4)
|
|
$2,487,500
|
|
$2,627,000
|
||||
|
|
|
|
|
|
|||||
Total Long-Term Incentive Compensation
|
212
|
%
|
(5)
|
|
194
|
%
|
(5)
|
|
470
|
%
|
|
|
|
|
(target)
|
|
|
(target)
|
|
||
Total Direct Compensation ("TDC")
|
$4,909,273
|
(4)
|
|
$4,417,800
|
|
|
$8,182,000
|
•
|
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 were 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. Pardee has a CEO-approved Performance Incentive Arrangement ("PIA") that provides additional awards of up to $200,000 per year based on the evaluation of performance that may be subjective and/or based on achievement of defined short-term and/or long-term goals. Under this arrangement, the President and CEO may set and approve goals and the periods of performance for such goals, evaluate performance subjectively and/or with respect to any goals, and approve any award. Mr. Johnson confirmed that Mr. Pardee delivered strong results in
|
Summary Compensation Table
|
||||||||||||||||||||||||||
Name and Principal Position
|
Year
|
Salary
($)
|
|
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
|
2016
|
|
1,002,654
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
3,906,619
|
|
|
|
1,529,186
|
|
|
|
11,925
|
|
|
6,450,384
|
|
President and Chief
|
2015
|
|
998,827
|
|
|
—
|
|
—
|
|
—
|
|
|
3,573,178
|
|
(5)
|
|
1,068,264
|
|
(6)
|
|
761,700
|
|
|
6,401,969
|
|
|
Executive Officer
|
2014
|
|
950,000
|
|
|
—
|
|
—
|
|
—
|
|
|
2,918,500
|
|
(7)
|
|
435,830
|
|
(8)
|
|
311,475
|
|
|
4,615,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Charles G. Pardee
|
2016
|
|
669,460
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
1,685,055
|
|
|
|
769,599
|
|
|
|
211,925
|
|
|
3,336,039
|
|
Executive Vice President
|
2015
|
|
647,481
|
|
|
—
|
|
—
|
|
—
|
|
|
1,511,872
|
|
(9)
|
|
415,889
|
|
(10)
|
|
400,000
|
|
|
2,975,242
|
|
|
and Chief Operating Officer
|
2014
|
|
609,039
|
|
|
—
|
|
—
|
|
—
|
|
|
1,164,875
|
|
(11)
|
|
424,644
|
|
(12)
|
|
211,475
|
|
|
2,410,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
John M. Thomas, III
|
2016
|
|
596,806
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
1,645,425
|
|
|
|
631,252
|
|
|
|
11,925
|
|
|
2,885,408
|
|
Executive Vice President
|
2015
|
|
577,212
|
|
|
—
|
|
—
|
|
—
|
|
|
1,317,900
|
|
(13)
|
|
306,185
|
|
(14)
|
|
411,700
|
|
|
2,612,997
|
|
|
and Chief Financial Officer
|
2014
|
|
539,038
|
|
|
—
|
|
—
|
|
—
|
|
|
1,201,200
|
|
(15)
|
|
349,173
|
|
(16)
|
|
211,475
|
|
|
2,300,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Joseph P. Grimes, Jr.
|
2016
|
|
604,615
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
1,254,987
|
|
|
|
320,593
|
|
|
|
11,925
|
|
|
2,192,120
|
|
Executive Vice President
|
2015
|
|
557,135
|
|
|
—
|
|
—
|
|
—
|
|
|
954,122
|
|
(17)
|
|
268,994
|
|
(18)
|
|
311,700
|
|
|
2,091,951
|
|
|
and Chief Nuclear Officer
|
2014
|
|
535,152
|
|
|
—
|
|
—
|
|
—
|
|
|
729,317
|
|
(19)
|
|
16,907
|
|
(20)
|
|
311,475
|
|
|
1,592,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Michael D. Skaggs
|
2016
|
|
475,328
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
|
853,282
|
|
|
|
864,973
|
|
|
|
161,925
|
|
|
2,355,508
|
|
Senior Vice President,
|
2015
|
|
446,712
|
|
|
—
|
|
—
|
|
—
|
|
|
785,870
|
|
(21)
|
|
503,274
|
|
(22)
|
|
311,700
|
|
|
2,047,556
|
|
|
Watts Bar Nuclear Operations and Construction
|
2014
|
|
425,535
|
|
|
—
|
|
—
|
|
—
|
|
|
744,942
|
|
(23)
|
|
732,916
|
|
(24)
|
|
186,475
|
|
|
2,089,868
|
|
Non-Equity Incentive Plan Compensation
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
William D. Johnson
|
|
Charles G. Pardee
|
|
John M. Thomas, III
|
|
Joseph P. Grimes, Jr.
|
|
Michael D. Skaggs
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
EAIP
|
$
|
1,802,194
|
|
|
$
|
504,906
|
|
|
$
|
596,988
|
|
|
$
|
442,320
|
|
|
$
|
336,299
|
|
ELTIP
|
1,915,375
|
|
|
913,482
|
|
|
781,770
|
|
|
726,000
|
|
|
466,983
|
|
|||||
LTR
|
189,050
|
|
|
66,667
|
|
|
66,667
|
|
|
86,667
|
|
|
50,000
|
|
|||||
PIA/RIA
|
—
|
|
|
200,000
|
|
|
200,000
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,906,619
|
|
|
$
|
1,685,055
|
|
|
$
|
1,645,425
|
|
|
$
|
1,254,987
|
|
|
$
|
853,282
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
William D. Johnson
|
|
Charles G. Pardee
|
|
John M. Thomas, III
|
|
Joseph P. Grimes, Jr.
|
|
Michael D. Skaggs
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase under CBBS
|
$
|
19,235
|
|
|
$
|
19,875
|
|
|
$
|
35,189
|
|
|
$
|
18,646
|
|
|
$
|
48,505
|
|
Increase under SERP
|
1,509,951
|
|
|
749,724
|
|
|
596,063
|
|
|
301,947
|
|
|
816,468
|
|
|||||
Total
|
$
|
1,529,186
|
|
|
$
|
769,599
|
|
|
$
|
631,252
|
|
|
$
|
320,593
|
|
|
$
|
864,973
|
|
All Other Compensation
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
William D. Johnson
|
|
Charles G. Pardee
|
|
John M. Thomas, III
|
|
Joseph P. Grimes, Jr.
|
|
Michael D. Skaggs
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LTDCP Credit
|
$
|
—
|
|
|
$
|
200,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150,000
|
|
401(k) Matching Contribution
|
11,925
|
|
|
11,925
|
|
|
11,925
|
|
|
11,925
|
|
|
11,925
|
|
|||||
Total
|
$
|
11,925
|
|
|
$
|
211,925
|
|
|
$
|
11,925
|
|
|
$
|
11,925
|
|
|
$
|
161,925
|
|
Grants of Plan-Based Awards Table
|
||||||||||||||||
|
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1) |
|
|
||||||||||
Name
|
Plan
|
Threshold
(2)
($)
|
Target
(2)
($)
|
Maximum
(2)
($)
|
|
Threshold
(2)
($)
|
Target
(2)
($)
|
Maximum
(2)
($)
|
|
Performance Period Ending/Vesting Date
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
William D. Johnson
|
EAIP
(3)
|
746,250
|
|
1,492,500
|
|
2,238,750
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
870,625
|
|
1,741,250
|
|
2,611,875
|
|
|
|
|
|
|
09/30/2016
|
|||
|
LTR
(5)
|
—
|
|
189,050
|
|
189,050
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
|
|
|
|
870,625
|
|
1,741,250
|
|
2,611,875
|
|
|
09/30/2017
|
|||
|
LTP
(6)
|
|
|
|
|
1,134,300
|
|
2,268,600
|
|
3,402,900
|
|
|
09/30/2018
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
189,050
|
|
189,050
|
|
|
09/30/2017
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
189,050
|
|
189,050
|
|
|
09/30/2018
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Charles G. Pardee
|
EAIP
(3)
|
265,740
|
|
531,480
|
|
797,220
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
415,219
|
|
830,438
|
|
1,245,657
|
|
|
|
|
|
|
09/30/2016
|
|||
|
LTR
(5)
|
—
|
|
66,667
|
|
66,667
|
|
|
|
|
|
|
09/30/2016
|
|||
|
PIA
(7)
|
—
|
|
—
|
|
200,000
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
|
|
|
|
415,219
|
|
830,438
|
|
1,245,657
|
|
|
09/30/2017
|
|||
|
LTP
(6)
|
|
|
|
|
417,500
|
|
835,000
|
|
1,252,500
|
|
|
09/30/2018
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
66,667
|
|
66,667
|
|
|
09/30/2017
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
66,667
|
|
66,667
|
|
|
09/30/2018
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
John M. Thomas, III
|
EAIP
(3)
|
236,900
|
|
473,800
|
|
710,700
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
355,350
|
|
710,700
|
|
1,066,050
|
|
|
|
|
|
|
09/30/2016
|
|||
|
LTR
(5)
|
—
|
|
66,667
|
|
66,667
|
|
|
|
|
|
|
09/30/2016
|
|||
|
RIA
(8)
|
—
|
|
200,000
|
|
200,000
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
|
|
|
|
366,011
|
|
732,022
|
|
1,098,033
|
|
|
09/30/2017
|
|||
|
LTP
(6)
|
|
|
|
|
357,500
|
|
715,000
|
|
1,072,500
|
|
|
09/30/2018
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
66,667
|
|
66,667
|
|
|
09/30/2017
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
66,667
|
|
66,667
|
|
|
09/30/2018
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Joseph P. Grimes, Jr.
|
EAIP
(3)
|
240,000
|
|
480,000
|
|
720,000
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
330,000
|
|
660,000
|
|
990,000
|
|
|
|
|
|
|
09/30/2016
|
|||
|
LTR
(5)
|
—
|
|
86,667
|
|
86,667
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
|
|
|
|
357,500
|
|
715,000
|
|
1,072,500
|
|
|
09/30/2017
|
|||
|
LTP
(6)
|
|
|
|
|
375,000
|
|
750,000
|
|
1,125,000
|
|
|
09/30/2018
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
86,667
|
|
86,667
|
|
|
09/30/2017
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
86,667
|
|
86,667
|
|
|
09/30/2018
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Michael D. Skaggs
|
EAIP
(3)
|
165,095
|
|
330,190
|
|
495,285
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
212,265
|
|
424,530
|
|
636,795
|
|
|
|
|
|
|
09/30/2016
|
|||
|
LTR
(5)
|
—
|
|
50,000
|
|
50,000
|
|
|
|
|
|
|
09/30/2016
|
|||
|
ELTIP
(4)
|
|
|
|
|
222,879
|
|
445,757
|
|
668,636
|
|
|
09/30/2017
|
|||
|
LTP
(6)
|
|
|
|
|
300,000
|
|
600,000
|
|
900,000
|
|
|
09/30/2018
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
50,000
|
|
50,000
|
|
|
09/30/2017
|
|||
|
LTR
(5)
|
|
|
|
|
—
|
|
50,000
|
|
50,000
|
|
|
09/30/2018
|
|||
|
|
|
|
|
|
|
Long-Term Retention Agreements
|
||||
Name
|
Plan
|
Amount
|
Date of Grant or Credit
|
Vesting Date
|
|
|
|
|
|
William D. Johnson
|
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)
|
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
($)
|
||
|
|
|
|
|
|
||
William D. Johnson
|
Qualified Plan – CBBS
|
3.750
|
(2)
|
71,364
|
|
—
|
|
|
Non-Qualified – SERP Tier 1
|
8.750
|
(2)
|
5,025,311
|
|
—
|
|
Charles G. Pardee
|
Qualified Plan – CBBS
|
3.417
|
(3)
|
74,595
|
|
—
|
|
|
Non-Qualified – SERP Tier 1
|
8.417
|
(3)
|
2,189,700
|
|
—
|
|
John M. Thomas, III
|
Qualified Plan – CBBS
|
10.833
|
|
274,328
|
|
—
|
|
|
Non-Qualified – SERP Tier 1
|
10.833
|
|
2,247,677
|
|
—
|
|
Joseph P. Grimes, Jr.
|
Qualified Plan – CBBS
|
3.083
|
|
56,693
|
|
—
|
|
|
Non-Qualified – SERP Tier 1
|
3.083
|
|
572,103
|
|
—
|
|
Michael D. Skaggs
|
Qualified Plan – CBBS
|
22.583
|
|
539,251
|
|
—
|
|
|
Non-Qualified – SERP Tier 1
|
22.583
|
|
3,827,450
|
|
—
|
|
Nonqualified Deferred Compensation Table
|
|
||||||||||||
Name
|
Executive
Contributions in
2016
($)
|
Registrant
Contributions in
2016
($)
|
|
Aggregate
Earnings in
2016
(1)
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
September 30 2016
(2)
($)
|
|
|||||
William D. Johnson
|
—
|
|
—
|
|
|
101
|
|
306,095
|
|
|
—
|
|
|
Charles G. Pardee
|
—
|
|
200,000
|
|
|
15,578
|
|
—
|
|
|
835,238
|
|
|
John M. Thomas, III
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
Joseph P. Grimes, Jr.
|
—
|
|
—
|
|
|
27,008
|
|
—
|
|
|
585,641
|
|
|
Michael D. Skaggs
|
—
|
|
150,000
|
|
|
227,969
|
|
—
|
|
|
4,179,825
|
|
|
•
|
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
|
|||||||
2016
|
|
Ernst & Young LLP
|
|
$
|
2,700,896
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,700,896
|
|
2015
|
|
Ernst & Young LLP
|
|
2,628,473
|
|
|
—
|
|
|
—
|
|
|
2,628,473
|
|
|||
|
•
|
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, as Amended on August 25, 2016
|
|
|
10.29†
|
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)
|
|
|
10.30†
|
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)
|
|
|
10.31†
|
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)
|
|
|
10.32†
|
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)
|
|
|
10.33†
|
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)
|
|
|
10.34†
|
Long-Term Retention Incentive Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, File No. 000-52313)
|
|
|
10.35†
|
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)
|
|
|
10.36†
|
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)
|
|
|
10.37†
|
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)
|
|
|
10.38†
|
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)
|
|
|
10.39†
|
Offer Letter to Joseph P. Grimes, Jr., Accepted 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)
|
|
|
10.40†
|
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)
|
|
|
10.41†
|
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)
|
|
|
10.42†
|
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)
|
|
|
10.43†
|
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)
|
|
|
10.44†
|
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)
|
|
|
10.45†
|
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)
|
|
|
10.46†
|
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)
|
|
|
10.47†
|
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)
|
|
|
10.48†
|
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)
|
|
|
10.49†
|
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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10.50†
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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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10.51†
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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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|
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10.52†
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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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|
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10.53†
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Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of June 1, 2014 (Incorporated by reference to Exhibit 10.56 to TVA's Annual Report on Form 10-K for the year ended September 30, 2015, File No. 000-52313)
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10.54†
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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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|
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10.55†
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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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|
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10.56†
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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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|
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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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14.2
|
TVA Conflict of Interest Policy,
as amended
(Incorporated by reference to Exhibit 14.2 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
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31.1
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Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Executive Officer
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31.2
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Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Financial Officer
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32.1
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Section 1350 Certification Executed by the Chief Executive Officer
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Date:
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November 14, 2016
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TENNESSEE VALLEY AUTHORITY
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(Registrant)
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By:
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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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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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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 14, 2016
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Michael R. McWherter
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/s/ Eric M. Satz
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Director
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November 14, 2016
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Eric M. Satz
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/s/ Ronald A. Walter
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Director
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November 14, 2016
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Ronald A. Walter
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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)
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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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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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|
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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)
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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)
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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)
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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)
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|
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10.28†
|
TVA Compensation Plan Approved by the TVA Board on May 31, 2007, as Amended on August 25, 2016
|
|
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10.29†
|
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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|
|
10.30†
|
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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|
|
10.31†
|
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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|
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10.32†
|
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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|
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10.33†
|
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)
|
|
|
10.34†
|
Long-Term Retention Incentive Plan (Incorporated by reference to Exhibit 10.1 to TVA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, File No. 000-52313)
|
|
|
10.35†
|
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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|
|
10.36†
|
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)
|
|
|
10.37†
|
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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|
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10.38†
|
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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10.39†
|
Offer Letter to Joseph P. Grimes, Jr., Accepted 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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|
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10.40†
|
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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|
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10.41†
|
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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10.42†
|
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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10.43†
|
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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|
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10.44†
|
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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|
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10.45†
|
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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|
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10.46†
|
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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|
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10.47†
|
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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10.48†
|
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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|
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10.49†
|
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)
|
|
|
10.50†
|
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)
|
|
|
10.51†
|
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)
|
|
|
10.52†
|
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)
|
|
|
10.53†
|
Long-Term Retention Incentive Plan Award Notice for Joseph P. Grimes, Jr., for Award Granted as of June 1, 2014 (Incorporated by reference to Exhibit 10.56 to TVA's Annual Report on Form 10-K for the year ended September 30, 2015, File No. 000-52313)
|
|
|
10.54†
|
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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10.55†
|
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)
|
|
|
10.56†
|
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)
|
|
|
14.2
|
TVA Conflict of Interest Policy, as amended (Incorporated by reference to Exhibit 14.2 to TVA’s Annual Report on Form 10-K for the year ended September 30, 2014, File No. 000-52313)
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Executive Officer
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification Executed by the Chief Financial Officer
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|
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32.1
|
Section 1350 Certification Executed by the Chief Executive Officer
|
|
|
•
|
Specifies all compensation (including salary or any other pay, bonuses, benefits, incentives, and any other form of remuneration) for the Chief Executive Officer (“CEO”) and TVA employees.
|
•
|
Shall be based on an annual survey of the prevailing compensation for similar positions in private industry, including engineering and electric utility companies, publicly owned electric utilities, and Federal, State, and local governments.
|
•
|
Shall provide that education, experience, level of responsibility, geographic differences, and retention and recruitment needs will be taken into account in determining compensation of employees.
|
•
|
The Board shall approve all compensation (including salary or any other pay, bonuses, benefits, incentives, and any other form of remuneration) of all managers and technical personnel that report directly to the CEO (including any adjustment to compensation).
|
•
|
On the recommendation of the CEO, the Board shall approve the salaries of employees whose annual salaries would be in excess of the annual rate payable for positions at Level IV of the Executive schedule.
|
•
|
The CEO shall determine the salary and benefits of employees whose annual salary is not greater than the annual rate payable for positions at Level IV of the Executive schedule.
|
•
|
Compensation is targeted at the median (50th percentile) of the labor market for most positions
|
•
|
Compensation may be targeted above median of the relevant labor market (typically between 50th and 75th percentiles) for certain positions due to market scarcity, recruitment and retention issues, and other business reasons (e.g., Nuclear and Transmission positions)
|
•
|
Published and custom compensation surveys reflecting the relevant labor markets identified for designated positions
|
•
|
Publicly disclosed information from a custom peer group of energy services companies of comparable size and business complexity as reviewed and approved by the Committee from time to time
|
•
|
Test competitiveness of compensation level and opportunity by position
|
•
|
Serve as a point of reference for establishing pay packages for recruiting executives
|
•
|
Determine appropriate adjustments to compensation levels and opportunities to maintain the desired degree of market competitiveness
|
•
|
Recommends the TVA Compensation Plan to provide the framework for TVA Management, the CEO, the People and Performance Committee, and the Board to manage compensation for all TVA employees in a manner which is in compliance with the TVA Act as amended by the Consolidated Appropriations Act, 2005.
|
•
|
Evaluates the performance of the CEO’s direct reports and recommends executive pay adjustments to the People and Performance Committee and the Board as appropriate.
|
•
|
Approves, or delegates to others the authority to approve, all personnel and compensation actions not reserved for Board approval as defined by the delegations in this Plan.
|
•
|
Approves the Retirement System Board's selection of trustees of the Retirement System and the 401(k) Plan and the trust agreements between the System and such trustees and any amendments thereto.
|
•
|
Approves the TVA Retirement System Board's selection of investment managers of the Retirement System and the 401(k) Plan and the investment management agreements between the System and such managers and any amendments thereto.
|
•
|
Receives notice of any amendments to the Rules and the 401(k) Plan Provisions approved by the System Board that do not have a direct cost impact on and that do not increase the liabilities of the Retirement System, elects to veto or not to veto said amendments, and elects whether to waive the remainder of the notice period in which to veto said amendments.
|
•
|
Appoints three members to the Board of Directors of the TVA Retirement System.
|
•
|
Reviews the TVA Compensation Plan that is required by Section 2(g)(1)(F) of the TVA Act and makes recommendations to the full Board for approval.
|
•
|
Reviews total compensation for the CEO and all managers and technical personnel who report directly to the CEO (including employment agreements dealing with such compensation and other matters, to the extent deemed appropriate) and the structure of the Company’s leadership team, including specific quantitative and qualitative goals, and recommends said compensation and goals to the full Board for approval.
|
•
|
Reviews the performance of the CEO and, on an annual basis, reviews a report by the CEO on the performance of the CEO's direct reports.
|
•
|
Monitors and recommends to the Board on an annual basis (on the recommendation of the CEO and as approved by the CEO throughout the year) the salaries of employees whose annual salaries would be in excess of the annual rate payable for positions at Executive Schedule Level IV.
|
•
|
Monitors the Company’s executive compensation to ensure its competitiveness and effectiveness in recruiting and retaining capable executives in service to TVA.
|
•
|
Periodically reviews the compensation and benefits programs for all TVA employees, including retirement benefits, annual opportunities under incentive plans, and other elements of compensation, to ensure prudent management of resources and competitiveness and effectiveness in recruiting and retaining capable executives, managers, and employees.
|
•
|
Reviews and recommends to the full Board TVA’s annual contribution to the TVA Retirement System.
|
•
|
Reviews amendments to the Retirement System Rules and 401(k) Plan Provisions approved by the Systems Board that have a direct cost impact on TVA or that increase the liabilities of the Retirement System and recommends to the full Board whether to elect to veto or not to veto such amendments and whether to waive the remainder of the notice period in which to veto said amendments.
|
•
|
Coordinates with other Board committees as appropriate on any of the roles set out above.
|
•
|
Approves the TVA Compensation Plan and amendments to the plan for all employees, which includes the TVA Compensation Philosophy and relevant labor market.
|
•
|
Approves all compensation (including salary, bonuses, benefits, incentives, and any other form of remuneration) for the CEO and all managers and technical personnel that report directly to the CEO.
|
•
|
Approves on an annual basis, on the recommendation of the People and Performance Committee as approved by the CEO throughout the year, the salaries of employees whose annual salaries would be in excess of the annual rate payable for positions at Executive Schedule Level IV
|
•
|
Approves TVA’s annual contribution to the TVA Retirement System.
|
•
|
Receives notice of any amendments to the Rules and the 401(k) Plan Provisions approved by the System Board that have a direct cost impact on TVA or that increase the liabilities of the Retirement System, elects to veto or not to veto said amendments, and elects whether to waive the remainder of the notice period in which to veto said amendments.
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of the Tennessee Valley Authority;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
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 14, 2016
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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)
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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):
|
a)
|
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)
|
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 14, 2016
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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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|
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/s/ William D. Johnson
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William D. Johnson
|
President and Chief Executive Officer
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November 14, 2016
|
|
|
/s/ John M. Thomas, III
|
John M. Thomas, III
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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November 14, 2016
|
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