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What changed in Tennessee Valley Authority's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Tennessee Valley Authority's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+759 added−842 removedSource: 10-K (2025-11-13) vs 10-K (2024-11-14)

Top changes in Tennessee Valley Authority's 2025 10-K

759 paragraphs added · 842 removed · 598 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

228 edited+61 added−93 removed164 unchanged
Biggest changeTVA's capability provided by PPAs is primarily provided under contracts that expire through 2044 and are described in the table below. 19 Table of Contents Power Purchase Agreements (1) At September 30, 2024 Type of Facility Location Number of Contracts Contract Capacity (MW) (2) Contract Termination Date Renewable PPAs Operating Solar Tennessee 8 430 2032 - 2044 Solar Alabama 2 302 2037 - 2041 Solar Mississippi 1 150 2044 Total Operating Solar 11 882 Wind Tennessee 1 25 2025 Wind Iowa 2 299 2030 - 2031 Wind Kansas 2 366 2032 - 2033 Wind Illinois 3 550 2032 - 2033 Total Operating Wind 8 1,240 Hydroelectric Tennessee, Kentucky, and North Carolina 2 779 2035 and upon three years' notice Landfill Gas Tennessee 1 5 2031 Subtotal Operating 22 2,906 Contract Renewable Resources (3) 300 Total Renewable Operating PPAs 3,206 Contracted (not yet online) Solar (4) 21 2,802 Total Renewable Contracted PPAs 21 2,802 Nonrenewable PPAs Operating Diesel Tennessee 4 59 2028 - 2032 Diesel Alabama 1 10 2035 Diesel Mississippi 2 46 2028 Total Operating Diesel 7 115 Natural Gas (5) Alabama 3 2,068 2024 - 2033 Natural Gas (5) Georgia 3 646 2024-2025 Natural Gas Illinois 1 479 2028 Natural Gas Missouri 1 50 2025 Natural Gas Pennsylvania 1 500 2028 Total Operating Natural Gas 9 3,743 Coal Georgia 1 250 2026 Coal Mississippi 1 500 2026 Lignite Mississippi 1 440 2032 Total Operating Coal 3 1,190 Battery Storage Mississippi 1 50 2044 Total Nonrenewable Operating PPAs 20 5,098 Contracted (not yet online) Nuclear 1 14 Battery Storage (4) 4 320 Total Nonrenewable Contracted PPAs 5 334 20 Table of Contents Notes (1) TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.
Biggest changePower Purchase Agreements (1) At September 30, 2025 Type of Facility Location Number of Contracts Contract Capacity (MW) (2) Contract Termination Date Operating Coal (3) Georgia 1 250 2026 Coal (3) Mississippi 1 500 2026 Lignite Mississippi 1 440 2032 Total Operating Coal 3 1,190 Natural Gas Alabama 4 1,788 2026 - 2033 Natural Gas Georgia 3 692 2026 - 2028 Natural Gas Illinois 1 479 2028 Natural Gas (4) Missouri 1 50 2026 Natural Gas (4) North Carolina 1 100 2026 Natural Gas Pennsylvania 1 500 2028 Total Operating Natural Gas 11 3,609 Diesel Alabama 1 10 2035 Diesel Mississippi 2 46 2028 Diesel Tennessee 4 59 2028 - 2032 Total Operating Diesel 7 115 Solar Alabama 2 302 2037 - 2041 Solar Kentucky 1 173 2045 Solar Mississippi 2 350 2044 - 2045 Solar Tennessee 10 613 2032 - 2045 Total Operating Solar 15 1,438 Wind Iowa 2 159 2030 - 2031 Wind Illinois 3 450 2032 - 2033 Wind Kansas 2 311 2032 - 2033 Total Operating Wind 7 920 Biomass Tennessee 1 5 2031 Biomass Mississippi 1 25 2028 Total Operating Biomass 2 30 Hydroelectric Tennessee, Kentucky, and North Carolina 2 779 2035 and upon three years' notice Battery Storage Mississippi 2 100 2044 - 2045 Subtotal Operating 49 8,181 Contract Renewable Resources (5) 301 Total Operating PPAs 8,482 Contracted (not yet online) Nuclear 1 50 Solar 31 2,528 Battery 3 270 Total Contracted (not yet online) PPAs 35 2,848 Notes (1) TVA acquires RECs in connection with certain purchased power transactions and sells some of these RECs to customers.
It is not clear whether this approach will be adopted nationwide or how the BTA standard would be applied to TVA's hydroelectric facilities; accordingly, the specific impacts to TVA from the Region 10 permits cannot be determined at this time. Hydrothermal Discharges. EPA and many states continue to focus regulatory attention on potential effects of hydrothermal discharges.
It is not clear whether this approach will be adopted nationwide or how the BTA standard would be applied to TVA's hydroelectric facilities; accordingly, the specific impacts to TVA from the Region 10 and Region 1 permits cannot be determined at this time. Hydrothermal Discharges. EPA and many states continue to focus regulatory attention on potential effects of hydrothermal discharges.
This rule is expected to significantly impact wastewater treatment options at coal combustion facilities with waste streams that operate past 2028. This rule establishes more stringent technology-based effluent limitations for four waste streams: flue gas desulfurization (“FGD”) wastewater, bottom ash transport water (“BATW”), combustion residual leachate (“CRL”), and legacy wastewater.
This rule is expected to significantly impact wastewater treatment options at coal combustion facilities with waste streams that operate past CY 2028. This rule establishes more stringent technology-based effluent limitations for four waste streams: flue gas desulfurization (“FGD”) wastewater, bottom ash transport water (“BATW”), combustion residual leachate (“CRL”), and legacy wastewater.
As a Balancing Authority, Distribution Provider, Generator Owner, Generator Operator, Planning Coordinator, Reliability Coordinator, Resource Planner, Transmission Owner, Transmission Operator, Transmission Planner, and Transmission Service Provider, as those terms are defined for purposes of North American Electric Reliability Corporation ("NERC") regulations, TVA is also subject to federal reliability standards that are set forth by the NERC and approved by FERC.
As a Balancing Authority, Distribution Provider, Generator Owner, Generator Operator, Planning Coordinator, Reliability Coordinator, Resource Planner, Transmission Owner, Transmission Operator, Transmission Planner, and Transmission Service Provider, as those terms are defined for purposes of North American Electric Reliability Corporation ("NERC") regulations, TVA is also subject to federal reliability standards that are set forth by NERC and approved by FERC.
TVA is expanding its portfolio and plans to invest more than $1.5 billion in its energy efficiency and demand response programs from 2024 – 2028. Over this five-year period, TVA anticipates approximately 2,200 gigawatt hours of net incremental energy efficiency savings and expects to have over 2,200 MW of demand response portfolio capacity in 2028.
TVA is expanding its portfolio and plans to invest more than $1.5 billion in its energy efficiency and demand response programs from 2024 – 2028. Over this five-year period, TVA anticipates approximately 1,600 gigawatt hours of net incremental energy efficiency savings and expects to have over 2,200 MW of demand response portfolio capacity in 2028.
In reaching its decision, the Court rejected the “significant nexus” standard for determining the jurisdiction of the CWA that was articulated by Justice Kennedy in the Court’s Rapanos decision. The result of this decision is that fewer waters will be subject to CWA permitting or other restrictions. In response to the Sackett v.
In reaching its decision, the Court rejected the “significant nexus” standard for determining the jurisdiction of the CWA that was articulated by Justice Kennedy in the Court’s Rapanos decision. The likely result of this decision is that fewer waters will be subject to CWA permitting or other restrictions. In response to the Sackett v.
Revised flexibility agreements were made available to LPCs in August 2023. These revised agreements permit projects to be located anywhere in TVA's service area, connected either to the LPC distribution system or to TVA's transmission system, and make it easier for LPCs to partner on projects.
Revised flexibility agreements were made available to LPCs in 2023. These revised agreements permit projects to be located anywhere in TVA's service area, connected either to the LPC distribution system or to TVA's transmission system, and make it easier for LPCs to partner on projects.
In addition, the FPA provides FERC with authority (1) to order refunds of excessive prices on short-term sales (transactions lasting 31 days or less) by all market participants, including TVA, in price gouging situations if such sales are through an independent system operator or regional transmission organization under a FERC-approved tariff; (2) to issue regulations requiring the reporting, on a timely basis, of information about the availability and prices of wholesale power and transmission service by all market participants, including TVA; (3) to investigate electric industry practices, including TVA's operations that are subject to FERC's jurisdiction; and (4) to impose civil penalties of up to $1 million per day for each violation of the provisions of the FPA discussed in the prior paragraph that are applicable to TVA.
In addition, the FPA provides FERC with authority (1) to order refunds of excessive prices on short-term sales (transactions lasting 31 days or less) by all market participants, including TVA, in price gouging situations if such sales are through an independent system operator or regional transmission organization under a FERC-approved tariff; (2) to issue regulations requiring the reporting, on a timely basis, of information about the availability and prices of wholesale power and transmission service by all market participants, including TVA; (3) to investigate electric industry practices, including TVA's operations that are subject to FERC's jurisdiction; and (4) to impose civil penalties of up to $1 million per day for each violation of 25 Table of Contents the provisions of the FPA discussed in the prior paragraph that are applicable to TVA.
Wilbur Hydroelectric Facility Units 1-3 were in long-term outage and unavailable for service at September 30, 2024. The amount of electricity that TVA is able to generate from its hydroelectric plants depends on a number of factors, including the amount of precipitation and runoff, initial water levels, generating unit availability, and the need for water for competing water management objectives.
Wilbur Hydroelectric Facility Units 1-3 were in long-term outage and unavailable for service at September 30, 2025. The amount of electricity that TVA is able to generate from its hydroelectric plants depends on a number of factors, including the amount of precipitation and runoff, initial water levels, generating unit availability, and the need for water for competing water management objectives.
Power generating facilities operated by TVA at September 30, 2024, included three nuclear sites, 18 natural gas and/or oil-fired sites, four coal-fired sites, 29 conventional hydroelectric sites, one pumped-storage hydroelectric site, one diesel generator site, and nine operating solar installations. See Item 2, Properties — Generating Properties — Net Capability for a discussion of the units at these facilities.
Power generating facilities operated by TVA at September 30, 2025, included three nuclear sites, 18 natural gas and/or oil-fired sites, four coal-fired sites, 29 conventional hydroelectric sites, one pumped-storage hydroelectric site, one diesel generator site, and nine operating solar installations. See Item 2, Properties — Generating Properties — Net Capability for a discussion of the units at these facilities.
To resolve alleged New Source Review claims, TVA committed under the Environmental Agreements to, among other things, take now-completed actions regarding coal-fired units and invest $290 million in certain TVA environmental projects. See Note 22 — Commitments and Contingencies — Legal Proceedings — Environmental Agreements , which discussion is incorporated herein by reference. Acid Rain Program.
To resolve alleged New Source Review claims, TVA committed under the Environmental Agreements to, among other things, take now-completed actions regarding coal-fired units and invest $290 million in certain TVA environmental projects. See Note 23 — Commitments and Contingencies — Legal Proceedings — Environmental Agreements , which discussion is incorporated herein by reference. Acid Rain Program.
Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues for 2024. TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments.
Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues for 2025. TVA and LPCs continue to work together to meet the changing needs of consumers around the Tennessee Valley. TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments.
Coal-Fired At September 30, 2024, TVA had four coal-fired plants consisting of 24 active units, accounting for 5,815 MW of summer net capability. TVA considers units to be in an active state when the unit is generating, available for service, or temporarily unavailable due to equipment failures, inspections, or repairs.
Coal-Fired At September 30, 2025, TVA had four coal-fired plants consisting of 24 active units, accounting for 5,815 MW of summer net capability. TVA considers units to be in an active state when the unit is generating, available for service, or temporarily unavailable due to equipment failures, inspections, or repairs.
To comply with CSAPR, TVA power plants must obtain one NO x allowance for every ton of NO x emitted during the ozone season. Under a revised version of CSAPR (the "Revised CSAPR Update Rule"), the Shawnee Fossil Plant ("Shawnee") facility is subject to reduced ozone-season NO x allowances and has been required to use most of its allowance inventory.
To comply with CSAPR, TVA power plants must obtain one NO x allowance for every ton of NO x emitted during the ozone season. Under a revised version of CSAPR (the "Revised CSAPR Update Rule"), the Shawnee facility is subject to reduced ozone-season NO x allowances and has been required to use most of its allowance inventory.
To reduce NO x emissions, TVA operates SCRs on 18 coal-fired units, operates low-NO x burners or low-NO x combustion systems on 20 units, optimized combustion on all 24 units, and operates NO x control equipment year round when units are operating (except during start-up, shutdown, and maintenance periods). TVA has also retired 35 of 59 coal-fired units.
To reduce NO x emissions, TVA operates SCRs on 21 coal-fired units, operates low-NO x burners or low-NO x combustion systems on 20 units, optimized combustion on all 24 units, and operates NO x control equipment year round when units are operating (except during start-up, shutdown, and maintenance periods). TVA has also retired 35 of 59 coal-fired units.
TVA is continuing to evaluate the rules and their impact on its operations, including the cost and timing estimates of related projects. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities and Note 13 — Asset Retirement Obligations.
TVA is continuing to evaluate the rules and their impact on its operations, including the cost and timing estimates of related projects. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities and Note 14 — Asset Retirement Obligations.
Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. As of September 30, 2024, 148 LPCs had signed the Partnership Agreement with TVA.
Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. As of September 30, 2025, 148 LPCs had signed the Partnership Agreement with TVA.
Likewise, the Mississippi Public Service Commission adopted an energy efficiency rule applying to electric and natural gas providers in the state, and TVA is supplying information on participation in TVA's energy efficiency programs to support the covered Mississippi LPCs. 34 Table of Contents Water Quality Control Developments Waters of the United States .
Likewise, the Mississippi Public Service Commission adopted an energy efficiency rule applying to electric and natural gas providers in the state, and TVA is supplying information on participation in TVA's energy efficiency programs to support the covered Mississippi LPCs. 30 Table of Contents Water Quality Control Developments Waters of the United States .
These rates are revised from time to time, subject to TVA approval, to reflect changes in costs, including changes in the wholesale cost of power. TVA also regulates LPC policies for customer deposits, termination of service for non-payment, providing information to consumers, and billing through a service practice policy framework.
These rates are revised from time to time, subject to TVA approval, to reflect changes in costs, including changes in the wholesale cost of power. TVA also regulates LPC policies for customer deposits, termination of service for non-payment, provision of information to consumers, and billing through a service practice policy framework.
The rule also establishes a new subcategory for CRL called unmanaged CRL, which includes discharges of CRL that the permitting authority determines are the functional equivalent 35 Table of Contents of direct discharges of CRL or groundwater that meets the definition of CRL that is pumped to the surface and discharged to the waters of the United States.
The rule also establishes a new subcategory for 31 Table of Contents CRL called unmanaged CRL, which includes discharges of CRL that the permitting authority determines are the functional equivalent of direct discharges of CRL or groundwater that meets the definition of CRL that is pumped to the surface and discharged to the waters of the United States.
Hiwassee Hydro Unit 2 has a unique reversible turbine/generator that acts as a pump and a turbine enhancing TVA's ability to balance baseload generation. At September 30, 2024, Hiwassee Hydro Unit 2 accounted for 86 MW of the conventional hydroelectric summer net capability.
Hiwassee Hydro Unit 2 has a unique reversible turbine/generator that acts as a pump and a turbine enhancing TVA's ability to balance baseload generation. At September 30, 2025, Hiwassee Hydro Unit 2 accounted for 86 MW of the conventional hydroelectric summer net capability.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Fiber Optic Network. New energy management systems and energy storage technologies present opportunities for more sophisticated and integrated operation of the entire grid.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Fiber Optic Network. New energy management systems and energy storage technologies present opportunities for more sophisticated and integrated operation of the entire grid.
(3) These estimates do not include expenditures expected to be incurred after 2029. (4) Includes known costs necessary for both federal and state compliance with the CCR rule, including requirements for the closure of facilities, post-closure maintenance, monitoring, and inspections.
(3) These estimates do not include expenditures expected to be incurred after 2030. (4) Includes known costs necessary for both federal and state compliance with the CCR rule, including requirements for the closure of facilities, post-closure maintenance, monitoring, and inspections.
The goal of the Green Invest Program is to meet the long-term sustainability needs of customers at scale. TVA procures the needed renewable supply through a diversified approach, which could include a competitive procurement process, strategic partnerships, or construction of renewable facilities to meet these needs.
The goal of the Green Invest Program is to meet the long-term sustainability needs of customers. TVA procures the needed renewable supply through a diversified approach, which could include a competitive procurement process, strategic partnerships, or construction of renewable facilities to meet these needs.
TVA's economic development incentive programs offer competitive incentives to new and existing power customers in certain business sectors that make multi-year commitments to invest in the Tennessee Valley. See Note 17 — Revenue — Contract Balances — Economic Development Incentives for total incentives recorded.
TVA's economic development incentive programs offer competitive incentives to new and existing power customers in certain business sectors that make multi-year commitments to invest in the Tennessee Valley. See Note 18 — Revenue — Contract Balances — Economic Development Incentives for total incentives recorded.
In 2024, TVA monitored forecasted needs and utilized purchased allowances for the Shawnee facility. A longer-term compliance strategy for the facility is being developed that may include installing NO x control upgrades, incorporating operational changes, and continuing to purchase allowances.
In 2025, TVA monitored forecasted needs and utilized purchased allowances for the Shawnee facility. A longer-term compliance strategy for the facility is being developed that may include installing NO x control upgrades, incorporating operational changes, and continuing to purchase allowances.
(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance, and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall CO 2 emission rates and baseline reductions from historical levels are based on short tons.
(2) Emissions data is consistent with Edison Electric Institute Environmental, Social, Governance, and Sustainability Report standards, which are based on metric tons ("MTs"), whereas overall carbon dioxide ("CO 2 ") emission rates and baseline reductions from historical levels are based on short tons.
“Positions” are calculated by adding (1) the number of full-time, on-site employees and/or independent contractors at the facility, (2) the total number of full-time work-from-home employees and independent contractors who reside in the TVA service territory and who spend 100% of their work time on facility-related matters, and (3) the total hours worked on facility-related matters by (a) full-time and part-time on-site employees at the facility and (b) full-time and part-time work-from-home employees who reside in the TVA service territory and who spend less than 100% of their work time on facility-related matters, divided by the number of work hours of such employees based on a 40 hour work week.
“Positions” are calculated by adding (1) the number of full-time, 24 Table of Contents on-site employees and/or independent contractors at the facility, (2) the total number of full-time work-from-home employees and independent contractors who reside in the TVA service territory and who spend 100% of their work time on facility-related matters, and (3) the total hours worked on facility-related matters by (a) full-time and part-time on-site employees at the facility and (b) full-time and part-time work-from-home employees who reside in the TVA service territory and who spend less than 100% of their work time on facility-related matters, divided by the number of work hours of such employees based on a 40 hour work week.
See Note 23 — Related Parties . TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment in 2014; therefore, the repayment of this amount is no longer a component of rate setting.
See Note 24 — Related Parties . TVA fulfilled its requirement to repay $1.0 billion of the Power Program Appropriation Investment in 2014; therefore, the repayment of this amount is no longer a component of rate setting.
See Fuel Supply — Nuclear Fuel below for a discussion of spent nuclear fuel and low-level radioactive waste and Note 22 — Commitments and Contingencies — Contingencies for a discussion of TVA's nuclear decommissioning liabilities and the related trust and nuclear insurance, which discussions are incorporated herein by reference.
See Fuel Supply — Nuclear Fuel below for a discussion of spent nuclear fuel and low-level radioactive waste and Note 23 — Commitments and Contingencies — Contingencies for a discussion of TVA's nuclear decommissioning liabilities and the related trust and nuclear insurance, which discussions are incorporated herein by reference.
Criminal penalties may also result from such violations. Furthermore, while not required to do so, TVA has elected to implement various FERC orders and regulations pertaining to public utilities on a voluntary basis to the extent that they are consistent with TVA's obligations under the TVA Act. Finally, on July 28, 2023, FERC issued Order No. 2023.
Criminal penalties may also result from such violations. Furthermore, while not required to do so, TVA has elected to implement various FERC orders and regulations pertaining to public utilities on a voluntary basis to the extent that they are consistent with TVA's obligations under the TVA Act. Finally, in 2023, FERC issued Order No. 2023.
Under the rule, beginning with the 2023 ozone season, power plants in 22 states, including Alabama, Kentucky, and Mississippi, are required to participate in a NO x 30 Table of Contents trading program. Over time, the emission budgets will decline based on the level of reductions achievable through phased installation of emissions controls at power plants starting in 2024.
Under the rule, beginning with the 2023 ozone season, power plants in 22 states, including Alabama, Kentucky, and Mississippi, are required to participate in a NO x trading program. Over time, the emission budgets will decline based on the level of reductions achievable through phased installation of emissions controls at power plants starting in 2024.
Base load CC gas plants subject to the rule would be required by January 1, 2032, to control 90 percent of the GHG emissions, most likely through carbon capture and storage. EPA did not finalize guidelines for GHG emissions from existing fossil fuel-fired stationary combustion turbine EGUs in this rulemaking. The rule is subject to legal challenges.
Base load CC gas plants subject to the rule would be required by January 1, 2032, to control 90 percent of the GHG emissions, most likely through carbon capture and storage. EPA did not finalize guidelines for GHG emissions from existing fossil fuel-fired stationary combustion turbine EGUs in this rulemaking.
If the challenges are not successful, the rule could require TVA to refurbish existing pollution control equipment at some of its coal-fired units, and the cost of such refurbishments could be substantial. Environmental Agreements.
If the challenges are not successful, the rule could require TVA to refurbish existing pollution control equipment at some of its coal-fired units, and the cost of such refurbishments could be substantial.
The following table shows TVA's generation and purchased power by generating source as a percentage of all electric power generated and purchased (based on kilowatt hours ("kWh")) for the periods indicated: Total Power Supply by Generating Source For the years ended September 30 Generation Resource (1) 2024 2023 2022 Nuclear 39% 42% 39% Natural gas and/or oil-fired 23% 22% 22% Coal-fired 13% 13% 13% Hydroelectric 7% 8% 8% Purchased power 18% 15% 18% Note (1) TVA's non-hydro renewable resources from TVA facilities are less than one percent for all periods shown, and therefore are not represented on the table above.
The following table shows TVA's generation and purchased power by generating source as a percentage of all electric power generated and purchased (based on kilowatt hours ("kWh")) for the periods indicated: Total Power Supply by Generating Source For the years ended September 30 Generation Resource (1) 2025 2024 2023 Nuclear 33% 39% 42% Natural gas and/or oil-fired 24% 23% 22% Coal-fired 15% 13% 13% Hydroelectric 8% 7% 8% Purchased power 20% 18% 15% Note (1) TVA's non-hydro renewable resources from TVA facilities are less than one percent for all periods shown, and therefore are not represented on the table above.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities and — Allen Groundwater Investigation and Note 13 — Asset Retirement Obligations.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Coal Combustion Residuals — Coal Combustion Residuals Facilities and — Allen Groundwater Investigation and Note 14 — Asset Retirement Obligations.
Department of Energy ("DOE") facilities and military installations, which accounted for approximately one percent of TVA's total operating revenues in 2024. 11 Table of Contents Other Revenue Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, Renewable Energy Certificate ("REC") sales, and certain other ancillary goods or services.
Department of Energy ("DOE") facilities and military installations, which accounted for approximately one percent of TVA's total operating revenues in 2025. 10 Table of Contents Other Revenue Other revenue consists primarily of wheeling and network transmission charges, sales of excess steam that is a by-product of power production, delivery point charges for interconnection points between TVA and the customer, Renewable Energy Certificate ("REC") sales, and certain other ancillary goods or services.
TVA has a Hydro Life Extension Program which focuses on recovering and preserving TVA's extensive hydroelectric fleet, improving efficiency and flexibility, and ensuring long-term reliability of this vital clean energy asset. As part of this program, TVA is working to add additional carbon free capacity to some of its existing hydroelectric units.
TVA has a Hydro Life Extension Program which focuses on recovering and preserving TVA's extensive hydroelectric fleet, improving efficiency and flexibility, and ensuring long-term reliability of this vital energy asset. As part of this program, TVA is working to add additional capacity to some of its existing hydroelectric units.
See Environmental Matters below and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges. 29 Table of Contents States The Supremacy Clause of the U.S. Constitution prohibits states, without federal legislative consent, from regulating the manner in which the federal government conducts its activities.
See Environmental Matters below and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges. States The Supremacy Clause of the U.S. Constitution prohibits states, without federal legislative consent, from regulating the manner in which the federal government conducts its activities.
TVA must consider executive actions within the context of statutory requirements imposed by Congress when carrying out its mission such as the TVA Act, which requires power to be sold at rates as low as feasible, and the Energy Policy Act of 1992, which requires the use of least-cost resource planning.
TVA must consider executive actions within the context of statutory requirements imposed by Congress when carrying out its mission such as the TVA Act, which requires power to be sold 29 Table of Contents at rates as low as feasible, and the Energy Policy Act of 1992, which requires the use of least-cost resource planning.
The program analyzes, evaluates, and manages risks through a systematic and thorough process that facilitates decision-making for the safety of a structure, identifying necessary actions to reduce risk, including remediation projects, and prioritization of actions for TVA's river 15 Table of Contents dams. Prioritization is driven by reducing risk to the public and asset preservation.
The program analyzes, evaluates, and manages risks through a systematic and thorough process that facilitates decision-making for the safety of a structure, identifying necessary actions to reduce risk, including remediation projects, and prioritization of actions for TVA's river dams. Prioritization is driven by reducing risk to the public and asset preservation.
Pursuant to its Transmission Service Guidelines, TVA offers transmission services to eligible customers to transmit wholesale power in a manner that is comparable to TVA's own use of the transmission system. TVA has also adopted and operates in accordance with its published Transmission Standards of Conduct and separates its transmission function from its 23 Table of Contents power marketing function.
Pursuant to its Transmission Service Guidelines, TVA offers transmission services to eligible customers to transmit wholesale power in a manner that is comparable to TVA's own use of the transmission system. TVA has also adopted and operates in accordance with its published Transmission Standards of Conduct and separates its transmission function from its power marketing function.
Converting uranium to nuclear fuel generally involves four stages: the mining and milling of uranium ore to produce uranium concentrates; the conversion of uranium concentrates to uranium hexafluoride gas; the enrichment of uranium hexafluoride; and the fabrication of the enriched uranium hexafluoride into fuel assemblies.
Nuclear Fuel Current Fuel Supply . Converting uranium to nuclear fuel generally involves four stages: the mining and milling of uranium ore to produce uranium concentrates; the conversion of uranium concentrates to uranium hexafluoride gas; the enrichment of uranium hexafluoride; and the fabrication of the enriched uranium hexafluoride into fuel assemblies.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Fiber Optic Network. Finally, TVA and other utility companies are facing an evolving marketplace of increased competition driven by customer choice and behavior.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Fiber Optic Network. Finally, TVA and other utility companies are facing an evolving marketplace of increased competition driven by customer choice and behavior.
Other Customers Revenues from directly served industrial customers accounted for approximately seven percent of TVA's total operating revenues in 2024. Contracts with these customers are subject to termination by the customer or TVA upon a minimum notice period that varies according to a number of factors, including the customer's contract demand and the period of time service has been provided.
Other Customers Revenues from directly served industrial customers accounted for approximately eight percent of TVA's total operating revenues in 2025. Contracts with these customers are subject to termination by the customer or TVA upon a minimum notice period that varies according to a number of factors, including the customer's contract demand and the period of time service has been provided.
The majority of these contractors are managed by TVA suppliers that are providing services to TVA and primarily provide construction, maintenance, and modification work on TVA property and facilities as well as supplemental staffing for projects in support of various business needs. 40 Table of Contents
The majority of these contractors are managed by TVA suppliers that are providing services to TVA and primarily provide construction, maintenance, and modification work on TVA property and facilities as well as supplemental staffing for projects in support of various business needs.
In November 2022, the TVA Board approved the opportunity for TVA to explore the development of an additional utility-scale solar project, contingent on successfully completing environmental reviews under NEPA and other applicable laws and obtaining the necessary state permits.
In November 2022, the TVA Board approved the opportunity for TVA to explore the development of a utility-scale solar project, contingent on successfully completing environmental reviews under NEPA and other applicable laws and obtaining the necessary state permits.
Under some conditions, retrofitting a unit with additional equipment to better control SO 2 and NO x emissions can adversely affect opacity emissions, and TVA and other utilities have addressed this issue. The evaluation of utilities' compliance with opacity requirements is coming under increased scrutiny, especially during periods of startup, shutdown, and malfunction ("SSM").
Under some conditions, retrofitting a unit with additional equipment to better control SO 2 and NO x emissions can adversely affect opacity emissions, and TVA and other utilities have addressed this issue. The evaluation of utilities' compliance with opacity requirements has come under increased scrutiny, especially during periods of startup, shutdown, and malfunction ("SSM").
During the year ended September 30, 2024, participants purchased approximately 694,000 RECs through the Green Flex Program. TVA tracks its renewable energy commitments and claims through the management of RECs. The RECs, which each represent one megawatt-hour ("MWh") of renewable energy generation, are principally associated with wind, solar, biomass, and low-impact hydroelectric.
During the year ended September 30, 2025, participants purchased approximately 792,000 RECs through the Green Flex Program. TVA tracks its renewable energy commitments and claims through the management of RECs. The RECs, which each represent one megawatt-hour ("MWh") of renewable energy generation, are principally associated with wind, solar, biomass, and low-impact hydroelectric.
To recover the cost of providing long-term, on-site storage for spent nuclear fuel, TVA filed a breach of contract suit against the U.S. in the U.S. Court of Federal Claims in 2001. As a result of this lawsuit and related agreements, TVA has collected approximately $483 million through 2024. Tritium-Related Services.
To recover the cost of providing long-term, on-site storage for spent nuclear fuel, TVA filed a breach of contract suit against the U.S. in the U.S. Court of Federal Claims in 2001. As a result of this lawsuit and related agreements, TVA has collected approximately $517 million through 2025. Tritium-Related Services.
Other revenue accounted for approximately two percent of TVA's total operating revenues in 2024. Rates Rate Authority The TVA Act gives the TVA Board sole responsibility for establishing the rates TVA charges for power. These rates are not subject to judicial review or to review or approval by any state or other federal regulatory body.
Other revenue accounted for approximately one percent of TVA's total operating revenues in 2025. Rates Rate Authority The TVA Act gives the TVA Board sole responsibility for establishing the rates TVA charges for power. These rates are not subject to judicial review or to review or approval by any state or other federal regulatory body.
On September 30, 2024, TVA's estimated liability for required cleanup and similar environmental work for those sites for which sufficient information was available to develop a cost estimate was approximately $15 million and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.
On September 30, 2025, TVA's estimated liability for required cleanup and similar environmental work for those sites for which sufficient information was available to develop a cost estimate was approximately $8 million and was included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.
The growing interest by customers in generating their own power through DER has the potential to lead to a reduction in the load served by TVA as well as cause TVA to re-evaluate how it operates the overall grid system to continue to provide highly reliable power at affordable 24 Table of Contents rates.
The growing interest by customers in generating their own power through DER has the potential to lead to a reduction in the load served by TVA as well as cause TVA to re-evaluate how it operates the overall grid system to continue to provide highly reliable power at affordable rates.
The strength of TVA lies in the collective power from the diverse knowledge, experiences, and perspectives that its employees bring from a variety of backgrounds. TVA recruits talent primarily from across the Tennessee Valley region and utilizes a talent framework to deliver enterprise workforce needs supporting attraction, selection, development, engagement, and performance.
Talent Attracting and Retaining Talent. The strength of TVA lies in the collective knowledge, experiences, and perspectives that its employees bring from a variety of backgrounds. TVA recruits talent primarily from across the Tennessee Valley region and utilizes a talent framework to deliver enterprise workforce needs supporting attraction, selection, development, engagement, and performance.
In 2019, EPA finalized its denial of New York's petition. The State of New York filed a petition in the D.C. Circuit for judicial review of EPA's denial of the petition, and in July 2020, the D.C. Circuit vacated EPA's denial of the petition and remanded the petition to EPA for reconsideration.
In 2019, EPA finalized its denial of New York's petition. The State of New York filed a petition in the D.C. Circuit for judicial review of EPA's denial of the petition, and in July 2020, the D.C. Circuit vacated EPA's 28 Table of Contents denial of the petition and remanded the petition to EPA for reconsideration.
TVA's review of the final rule indicates that the rule offers adequate flexibility for cost-effective compliance. The required compliance timeframe is linked to plant-specific NPDES permit renewal cycles (i.e., technology retrofits), and compliance activities have begun and are expected to continue through the 2028 - 2030 timeframe.
TVA's experience with the final rule indicates that the rule offers adequate flexibility for cost-effective compliance. The required compliance timeframe is linked to plant-specific NPDES permit renewal cycles (i.e., technology retrofits), and compliance activities have begun and are expected to continue through the 2028 - 2030 timeframe.
TVA's safety program is based on the fundamentals of a safety management system, which includes management commitment, employee engagement, hazard recognition and control, worksite analysis, contractor safety management, training, review, and continuous improvement.
Safety is one of TVA’s core values. TVA's safety program is based on the fundamentals of a safety management system, which includes management commitment, employee engagement, hazard recognition and control, worksite analysis, contractor safety management, training, review, and continuous improvement.
At September 30, 2024, TVA's hydroelectric fleet consisted of 29 conventional hydroelectric dams throughout the Tennessee River system with 109 conventional hydroelectric units (106 active units and three units in long-term outage and unavailable for service), that accounted for 3,757 MW of summer net capability.
At September 30, 2025, TVA's hydroelectric fleet consisted of 29 conventional hydroelectric dams throughout the Tennessee River system with 109 conventional hydroelectric units (106 active units and three units in long-term outage and unavailable for service), that accounted for 3,783 MW of summer net capability.
At September 30, 2024, 61 of the combustion turbine assets were dual-fuel capable, and TVA has fuel oil stored on each of these sites as a backup to natural gas. TVA purchases natural gas from multiple suppliers on a daily, monthly, seasonal, and term basis.
At September 30, 2025, 56 of the combustion turbine assets were dual-fuel capable, and TVA has fuel oil stored on each of these sites as a backup to natural gas. TVA purchases natural gas from multiple suppliers on a daily, monthly, seasonal, and term basis.
In addition, EPA has recently interpreted its CCR Rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.
In addition, in 2024, EPA interpreted its CCR Rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.
Particulate Emissions. To reduce particulate emissions of air pollutants, TVA has equipped all of its coal-fired units with scrubbers, mechanical collectors, electrostatic precipitators, and/or bag houses. Greenhouse Gas Emissions .
To reduce particulate emissions of air pollutants, TVA has equipped all of its coal-fired units with scrubbers, mechanical collectors, electrostatic precipitators, and/or bag houses. 33 Table of Contents Greenhouse Gas Emissions .
Revised flexibility agreements were made available to LPCs in August 2023. These revised agreements permit projects to be located anywhere in TVA's service area, connected either to the LPC distribution system or to TVA's transmission system, and make it easier for LPCs to partner on projects. As of September 30, 2024, 102 LPCs had signed a Power Supply Flexibility Agreement.
Revised flexibility agreements were made available to LPCs in 2023. These revised agreements permit projects to be located anywhere in TVA's service area, connected either to the LPC distribution system or to TVA's transmission system, and make it easier for LPCs to partner on projects. As of September 30, 2025, 109 LPCs had signed a Power Supply Flexibility Agreement.
These contractual relationships are important steps in the early stages of evaluation as TVA considers the economic feasibility of advanced nuclear reactors. These contractual relationships are also intended to leverage innovations to improve advanced nuclear designs, streamline licensing pathways, find efficiencies in construction methods, and optimize operating expenses.
These relationships are important steps in the early stages of evaluation as TVA considers the economic feasibility of advanced nuclear reactors and seeks to leverage innovations to improve advanced nuclear designs, streamline licensing pathways, find efficiencies in construction methods, and optimize operating expenses.
In April 2021, the Biden Administration announced its GHG NDCs for 2030 under the Paris Agreement, and these NDCs establish a new target for the U.S. to achieve a 50 to 52 percent reduction from 2005 levels in economy-wide net GHG pollution in 2030.
Previously, in April 2021, the Biden Administration announced its GHG NDCs for 2030 under the Paris Agreement, and these NDCs established a new target for the U.S. to achieve a 50 to 52 percent reduction from 2005 levels in economy-wide net GHG pollution in 2030. Litigation .
See Note 17 — Revenue for details regarding revenues by state for each of the last three years. 10 Table of Contents Customers TVA is primarily a wholesaler of power, selling power to LPCs that then resell power to their customers at retail rates.
See Note 18 — Revenue for details regarding revenues by state for each of the last three years. 9 Table of Contents Customers TVA is primarily a wholesaler of power, selling power to LPCs that then resell power to their customers at retail rates.
On May 9, 2024, EPA published a final rule that (1) repeals the Affordable Clean Energy Rule addressing GHG emissions from existing fossil fuel-fired electric generation units (“EGUs”), (2) establishes guidelines for GHG emissions from existing fossil-fuel fired steam generating EGUs, (3) finalizes revisions to the New Source Performance Standards (“NSPS”) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs, and (4) finalizes revisions to the NSPS for GHG emissions from fossil fuel-fired steam generating EGUs that undertake a large modification.
On May 9, 2024, EPA published a final rule that (1) repealed the Affordable Clean Energy Rule addressing GHG emissions from existing fossil fuel-fired electric generation units (“EGUs”), (2) established guidelines for GHG emissions from existing fossil-fuel fired steam generating EGUs, (3) finalized revisions to the New Source Performance Standards (“NSPS”) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs, and (4) finalized revisions to the NSPS for GHG emissions from fossil fuel-fired steam generating EGUs that undertake a large modification.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Financial Results — Operating Revenues and Note 17 — Revenue for details regarding TVA's operating revenues. Local Power Company Customers Revenues from LPCs accounted for approximately 90 percent of TVA's total operating revenues for 2024.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Financial Results — Operating Revenues and Note 18 — Revenue for details regarding TVA's operating revenues. Local Power Company Customers Revenues from LPCs accounted for approximately 90 percent of TVA's total operating revenues for 2025.
In-person and online learning events are offered and encouraged, and TVA also provides tuition reimbursement opportunities for academic programs aligned with TVA’s business and workforce development needs. Leadership Development and Succession Planning. TVA encourages and motivates employees to seek development and leadership opportunities.
In-person and online learning events are offered and encouraged, and TVA also provides tuition reimbursement opportunities for academic programs aligned with TVA’s business and workforce development needs. 34 Table of Contents Leadership Development and Succession Planning. TVA encourages and motivates employees to seek development and leadership opportunities.
This provision is referred to as the "fence" because it bounds TVA's sales activities, essentially limiting TVA to power sales within a defined service area. Note (1) TVA Locations shown here are in service as of September 30, 2024 .
This provision is referred to as the "fence" because it bounds TVA's sales activities, essentially limiting TVA to power sales within a defined service area. Note (1) TVA locations shown here were in service as of September 30, 2025.
TVA uses contracts of various lengths and terms to meet the projected natural gas needs of its natural gas fleet. During 2024, TVA arranged for the transportation of natural gas on eight separate pipelines, with approximately 69 percent being transported on two pipelines.
TVA uses contracts of various lengths and terms to meet the projected natural gas needs of its natural gas fleet. During 2025, TVA arranged for the transportation of natural gas on eight separate pipelines, with approximately 65 percent being transported on two pipelines.
Natural Gas and Fuel Oil During 2024, TVA purchased a significant amount of its natural gas requirements from a variety of suppliers under contracts with terms of up to five years and purchased substantially all of its fuel oil requirements on the spot market .
Natural Gas and Fuel Oil During 2025, TVA purchased a significant amount of its natural gas requirements from a variety of suppliers under contracts with terms of up to 10 years and purchased substantially all of its fuel oil requirements on the spot market .
Since TVA is an agency and instrumentality of the U.S., securities issued or guaranteed by TVA are "exempted securities" under the Securities Act of 1933, as amended (the "Securities Act"), and may be offered and sold without registration under the Securities Act.
Since TVA is an agency and instrumentality of the U.S., securities issued or guaranteed by TVA are "exempted securities" under the Securities Act of 1933, as amended (the "Securities Act"), and may be offered and sold without registration under the Securities Act. In addition, securities issued or guaranteed by TVA are "exempted securities" and "government securities" under the Exchange Act.
TVA is committed to investing in the future of nuclear and continues to evaluate the licensing and design of emerging nuclear technologies, such as advanced light water SMRs and advanced non-light water reactors, as part of technology innovation efforts aimed at developing the energy system of the future, one of TVA's strategic elements of Operational Excellence.
TVA continues to evaluate the licensing and design of emerging nuclear technologies, such as advanced light water SMRs, advanced non-light water reactors, and fusion technology, as part of technology innovation efforts aimed at developing the energy system of the future, one of TVA's strategic elements of Operational Excellence.
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Optimum Energy Portfolio — Natural Gas-Fired Units for a discussion of ongoing projects at certain natural gas-fired facilities .
See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Initiatives and Challenges — Capacity — Natural Gas-Fired Units for a discussion of ongoing projects at certain natural gas-fired facilities .
The 20 MW battery system was installed in the first quarter of 2024, and the site is progressing toward construction completion with the expectation to begin testing and commissioning by the first quarter of 2025. TVA is also evaluating a battery energy storage system utilizing grid-forming inverters.
The 20 MW battery system was installed in the first quarter of 2024, and the site is progressing toward construction completion with the expectation to begin testing and commissioning by the second quarter of 2026. TVA is also evaluating battery energy storage systems utilizing grid-forming inverters.
Community Energy Portfolio TVA continues to make investments in its community energy portfolio, consisting of energy efficiency, demand response, renewable, and resiliency programs, as part of its commitment to meet the Tennessee Valley’s growing energy needs and to support a decarbonized and more resilient grid.
See Community Energy Portfolio below . 16 Table of Contents Community Energy Portfolio TVA continues to make investments in its community energy portfolio, consisting of energy efficiency, demand response, renewable, and resiliency programs, as part of its commitment to meet the Tennessee Valley’s growing energy needs and to support a decarbonized and more resilient grid.
TVA could be impacted by higher market prices as a result of general market impacts resulting from the new law and other potential trade restrictions; however, at this time TVA's nuclear fuel is obtained predominantly through long-term contracts.
TVA could be impacted by higher market prices as a result of general market impacts resulting from potential trade restrictions; however, at this time TVA's nuclear fuel is obtained predominantly through long-term contracts.
These amounts are forward-looking and subject to various uncertainties. See Forward-Looking Information and Item 1A, Risk Factors. In 2024, TVA invested $173 million in its energy efficiency and demand response programs.
These amounts are forward-looking and subject to various uncertainties. See Forward-Looking Information and Item 1A, Risk Factors. In 2025, TVA invested $242 million in its energy efficiency and demand response programs.
TVA utilizes natural gas storage services at eight facilities with a total capacity of 7.8 billion per cubic feet ("Bcf") of firm service and 7.3 Bcf of interruptible service to manage the daily balancing requirements of the eight pipelines used by TVA, with approximately 52 percent of the total storage capacity being maintained at two facilities.
TVA utilizes natural gas storage services at eight facilities with a total capacity of 8.3 billion cubic feet ("Bcf") of firm service and 6.5 Bcf of interruptible service to manage the daily balancing requirements of the eight pipelines used by TVA, with approximately 56 percent of the total storage capacity being maintained at two facilities.
Although runoff for 2024 was below normal due to fewer significant rain events, the winter and spring timing of above normal rainfall during the period supported TVA's objective to generate low-cost hydroelectric power while also meeting its river system commitments, including flood mitigation, which is estimated to have prevented damages across the Tennessee Valley of approximately $406 million in 2024 and $10.1 billion over TVA's recorded history.
Although runoff for 2025 was below normal due to fewer significant rain events, the winter and spring timing of above normal rainfall during the period supported TVA's objective to generate low-cost hydroelectric power while also meeting 23 Table of Contents its river system commitments, including flood mitigation, which is estimated to have prevented damages across the Tennessee Valley of approximately $90 million in 2025 and $10.2 billion over TVA's recorded history.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch cancellation or delays may result from, among other things, changes in market conditions, changes in laws or regulations, unanticipatedly high environmental remediation costs, lack of productivity, human error, supply chain challenges, regional health emergencies, the failure to schedule activities properly, TVA's inability to obtain the necessary regulatory approvals or licenses, TVA's decision to cancel construction of a facility or cancel another type of project, including due to delays, cost overruns, changes in customer preferences, or changes in requirements applicable to how TVA conducts construction, repair, or closure activities.
Biggest changeCost increases, cancellation, or delays may result from, among other things, changes in market conditions; changes in laws or regulations that, among other things, may make it more expensive or difficult for TVA to build or operate natural gas-fired plants; unanticipatedly high environmental remediation costs; lack of productivity; human error; supply chain challenges; regional health emergencies; the failure to schedule activities properly; inability to obtain the necessary regulatory approvals, permits, or licenses, including approval from federal and state regulators for construction and 38 Table of Contents operation of new natural gas assets and attendant infrastructure (e.g., pipelines or transmission facilities); stakeholder opposition; insolvency of TVA's suppliers or other counterparties; changes in customer preferences; changes in requirements applicable to how TVA conducts construction, repair, or closure activities; and legal challenges which, among other things, may come in the form of direct legal challenges to TVA projects or through challenges to TVA's environmental reviews or the attempts of TVA or third parties to obtain necessary licenses and permits.
If FERC were to limit the application of the anti-cherrypicking provision or if federal legislation were to eliminate or limit the application of the anti-cherrypicking provision without corresponding legislative modifications to the territorial limitations imposed by the fence, TVA could face increased competition and may lose some of its customers. TVA may become subject to additional NERC requirements.
If FERC were to limit the application of the anti-cherrypicking provision, or if federal legislation were to eliminate or limit its application, without corresponding legislative modifications to the territorial limitations imposed by the fence, TVA could face increased competition and lose some of its customers. TVA may become subject to additional NERC requirements.
An inadequate supply of water in the Tennessee River system and Cumberland River system could negatively impact TVA's cash flows, results of operations, and financial condition, including potentially reducing generation at TVA's hydroelectric plants, which may require TVA to increase reliance on more expensive generation sources or purchase more energy in the market likely at higher costs; negatively affecting generation at coal-fired and nuclear plants, which depend on water from the river systems near which they are located for cooling and for use in boilers where water is converted into steam to drive turbines; or negatively affecting generation at TVA's gas-fired facilities not located near a river, which nonetheless require alternative sources of water, such as from wells or local utility companies.
An inadequate supply of water in the Tennessee River system or Cumberland River system could negatively impact TVA's cash flows, results of operations, and financial condition, including potentially reducing generation at TVA's hydroelectric plants, which may require TVA to increase reliance on more expensive generation sources or purchase more energy in the market, likely at higher costs; negatively affecting generation at coal-fired and nuclear plants, which depend on water from the river systems near which they are located for cooling and for use in boilers where water is converted into steam to drive turbines; or negatively affecting generation at TVA's gas-fired facilities not located near a river, which nonetheless require alternative sources of water, such as from wells or local utility companies.
Weather may have a material adverse effect on TVA’s cash flows, results of operations, and financial condition, including through the following non-exclusive foreseeable scenarios: • Extreme temperatures may increase the demand for power and require TVA to purchase power at high prices to meet customer demand, whereas unusually mild weather may result in decreased demand for power and lead to reduced electricity sales. • Periods of either high or low levels of rainfall may impede river traffic, impacting barge deliveries of critical items such as coal and equipment for power facilities. • High river water temperatures in the summer may limit TVA's ability to use water from the Tennessee or Cumberland River systems for cooling at certain of TVA's generating facilities, thereby limiting its ability to operate these generating facilities.
Weather may have a material adverse effect on TVA’s cash flows, results of operations, and financial condition, including through the following non-exclusive foreseeable scenarios: • Extreme temperatures may increase the demand for power and require TVA to purchase power at high prices to meet customer demand, whereas unusually mild weather may result in decreased demand for power and lead to reduced electricity sales. • Periods of either high or low levels of rainfall may impede river traffic, impacting barge deliveries of critical items such as coal and equipment for power facilities. • High river water temperatures in the summer may limit TVA's ability to use water from the Tennessee River system or Cumberland River system for cooling at certain of TVA's generating facilities, thereby limiting its ability to operate these generating facilities.
These attacks could pose health and safety risks, significantly disable or destroy TVA assets, interfere with TVA's operations, result in additional regulatory or security requirements or litigation, increase the costs of nuclear licensing or compliance, and otherwise negatively affect TVA's cash flows, results of operations, and financial condition.
These attacks could pose health and safety risks, significantly disable or destroy TVA assets, interfere with TVA's operations, result in additional regulatory or security requirements or litigation, increase the costs of nuclear licensing or compliance, and otherwise negatively affect TVA's reputation, cash flows, results of operations, and financial condition.
In addition, although TVA is not required to make contributions to the ART, it may choose to do so, particularly if TVA's estimates of its non-nuclear asset retirement obligation liabilities were to increase. TVA may also choose to make contributions to the SERP, DCP, and RP from time to time. Interest Rate Risk .
In addition, although TVA is not required to make contributions to the ART, it may choose to do so, particularly if TVA's estimates of its non-nuclear asset retirement obligation liabilities increase. TVA may also choose to make contributions to the SERP, DCP, and RP from time to time. Interest Rate Risk .
The aging of TVA's physical infrastructures and systems may increase the risk of accidents, especially if not properly maintained. TVA's service reliability could be affected by problems at other utilities or at TVA facilities, or by the increase in intermittent sources of power.
The aging of TVA's physical infrastructures and systems may increase the risk and consequences of accidents, especially if not properly maintained. TVA's service reliability could be affected by problems at other utilities or at TVA facilities, or by the increase in intermittent sources of power.
Further, a nuclear incident at one of TVA's facilities could have significant consequences including loss of life, damage to the environment, damage to or loss of the facility, and damage to non-TVA property.
Further, a nuclear incident at one of TVA's facilities could have significant consequences including loss of life, damage to the environment, damage to or loss of the facility, and damage to non-TVA property and TVA's reputation.
In addition, approaching or reaching the debt ceiling may lead to increased legislative or regulatory oversight of TVA's activities and could lead to negative rating actions by credit rating agencies.
In addition, approaching or reaching TVA's debt ceiling may lead to increased legislative or regulatory oversight of TVA's activities and could lead to negative rating actions by credit rating agencies.
Many of TVA's assets, including generation, transmission, navigation, and flood control assets, have been operating for several decades and have been in nearly constant service since they were completed. As such, they require regular maintenance, repair, and replacement in order to continue uninterrupted operation. Additionally, certain of TVA's newer assets utilize advanced technology that could experience technical or operating issues.
Many of TVA's assets, including generation, transmission, navigation, and flood control assets, have been operating for several decades and have been in nearly constant service since they were completed. As such, they require regular maintenance, repair, and replacement in order to continue uninterrupted operation. Additionally, some of TVA's newer assets utilize advanced technology that could experience technical or operating issues.
Events that affect the supply or quality of water from the Tennessee River system and Cumberland River system, or elsewhere, may interfere with TVA's ability to generate power.
Events that affect the supply or quality of water from the Tennessee River system or Cumberland River system, or elsewhere, may interfere with TVA's ability to generate power.
Any deterioration in TVA's reputation may harm TVA's relationships with its customers and stakeholders, may increase its cost of doing business, may interfere with its ability to attract and retain a qualified, inclusive, and diverse workforce, may impact TVA's ability to raise debt capital, and may potentially lead to the enactment of new laws and regulations, or the modification of existing laws and regulations, that negatively affect the way TVA conducts its business.
Any deterioration in TVA's reputation may harm TVA's relationships with its customers and stakeholders, may increase its cost of doing business, may interfere with its ability to attract and retain a qualified workforce, may impact TVA's ability to raise debt capital, and may potentially lead to the enactment of new laws and regulations, or the modification of existing laws and regulations, that negatively affect the way TVA conducts its business.
The inability to attract and retain an appropriately qualified, diverse, and inclusive workforce could adversely affect TVA's ability to, among other things, operate and maintain generation and transmission facilities, complete large construction projects, and successfully implement its continuous improvement initiatives. Changes in the membership of the TVA Board and TVA senior management could impact how TVA operates.
The inability to attract and retain an appropriately qualified workforce could adversely affect TVA's ability to, among other things, operate and maintain generation and transmission facilities, complete large construction projects, and successfully implement its continuous improvement initiatives. Changes in the membership of the TVA Board and TVA senior management could impact how TVA operates.
In response, TVA may be required to, among other things, change its generation mix or change how it conducts its operations. • Extreme weather conditions or damage resulting from storms or other catastrophic events could stress TVA's transmission and distribution systems, communication systems, and technology, including information technology, resulting in increased restoration, maintenance, and capital costs and reduced reliability, and may 52 Table of Contents even result in events such as the failure of a dam or an incident at a coal-fired, gas-fired, or nuclear plant or a CCR facility.
In response, TVA may be required to, among other things, change its generation mix or change how it conducts its operations. • Extreme weather conditions or damage resulting from storms or other catastrophic events could stress TVA's transmission and distribution systems, communication systems, and technology, including information technology, resulting in increased restoration, maintenance, and capital costs and reduced reliability, and may even result in events such as the failure of a dam or an incident at a coal-fired, gas-fired, or nuclear plant or a CCR facility.
TVA is subject to federal reliability standards set forth by NERC and approved by FERC. TVA recognizes that reliability standards and expectations continue to become more complex and stringent for transmission systems. If TVA fails to comply with the mandatory reliability standards, TVA could be subject to increased compliance obligations, sanctions or both.
TVA is subject to federal reliability standards set forth by NERC and approved by FERC. TVA recognizes that reliability standards and expectations continue to become more complex and stringent for transmission systems. If TVA fails to comply with the mandatory reliability standards, TVA could be subject to increased compliance obligations, sanctions for failure to comply with NERC requirements, or both.
TVA's cash flows, results of operations, and financial condition may be adversely affected, either directly or indirectly, by catastrophic events such as fires, earthquakes, explosions, solar events, electromagnetic pulses, geomagnetic disturbances, droughts, floods, hurricanes, tornadoes, polar vortexes, icing events, pipeline explosions, or other casualty events, wars, national emergencies, terrorist activities, pandemics or epidemics, widespread public health crises, geopolitical conflicts, or other similar destructive or disruptive events.
TVA's cash flows, results of operations, and financial condition may be adversely affected, either directly or indirectly, by catastrophic events such as fires, earthquakes, explosions, solar events, electromagnetic pulses, geomagnetic disturbances, droughts, floods, hurricanes, tornadoes, polar vortexes, icing events, pipeline explosions, or other casualty events, wars, national emergencies, terrorist activities, pandemics or epidemics, widespread public health 47 Table of Contents crises, geopolitical conflicts, or other similar destructive or disruptive events.
Many third parties on which TVA relies for services, including for transferring funds to non-TVA entities or receiving delivery of products in the ordinary course of business, are heavily computerized and use assets such as information technology and networking systems.
TVA relies on many third parties for services, including for transferring funds to non-TVA entities or receiving delivery of products in the ordinary course of business, that are heavily computerized and use assets such as information technology and networking systems.
HUMAN CAPITAL AND MANAGEMENT RISKS Failure to attract and retain an appropriately qualified, diverse, and inclusive workforce may negatively affect TVA's results of operations. TVA's business depends on its ability to recruit and retain key executive officers as well as skilled professional and technical employees.
HUMAN CAPITAL AND MANAGEMENT RISKS Failure to attract and retain an appropriately qualified workforce may negatively affect TVA's results of operations. TVA's business depends on its ability to recruit and retain key executive officers as well as skilled professional and technical employees.
The licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor, per incident.
The licensee of each U.S. nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor, per incident.
TVA's reputation could be harmed by a variety of factors, including failure of a generating asset or supporting infrastructure; failure to effectively manage land and other natural resources entrusted to TVA; real or perceived violations of environmental regulations, including those related to climate change; real or perceived issues with TVA's safety culture or work environment; inability to meet its human capital management goals; inability to meet its carbon reduction 54 Table of Contents aspirations; inability to keep its electricity rates stable; involvement in a class-action or other high-profile lawsuit; significant delays in construction projects; occurrence of or responses to cyber attacks or security vulnerabilities; acts or omissions of TVA management or acts or omissions of a contractor or other third-party working with or for TVA, which actually or perceivably reflect negatively on TVA; measures taken to offset reductions in demand or to supply rising demand; or a significant dispute with one of TVA's customers.
TVA's reputation could be harmed by a variety of factors, including failure of a generating asset or supporting infrastructure; failure to effectively manage land and other natural resources entrusted to TVA; real or perceived violations of environmental regulations, including those related to climate change; real or perceived issues with TVA's safety culture or work environment; inability to meet its human capital management goals; inability to keep its electricity rates stable; involvement in a class-action or other high-profile lawsuit; significant delays in construction projects; occurrence of or responses to cyber attacks or security vulnerabilities; acts or omissions of TVA management or acts or omissions of a contractor or other third-party working with or for TVA, which actually or perceivably reflect negatively on TVA; measures taken to offset reductions in demand or to supply rising demand; or a significant dispute with one of TVA's customers.
The costs of providing benefits depend upon a number of factors, including, but not limited to, provisions of the plan; changing experience and assumptions related to terminations, retirements, and mortality; rates of increase in compensation levels; rates of return on plan assets; discount rates used in determining future benefit obligations and required funding levels; optional forms of benefit payments selected; future government regulation; and levels of contributions made to the plan.
The costs of providing benefits depend upon a number of factors, including provisions of the plan; changing experience and assumptions related to terminations, retirements, and mortality; rates of increase in compensation levels; rates of return on plan assets; discount rates used in determining future benefit obligations and required funding levels; optional forms of benefit payments selected; future government regulation; and levels of contributions made to the plan.
ITEM 1A. RISK FACTORS The risk factors described below, as well as the other information included in this Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (the "Annual Report"), should be carefully considered.
ITEM 1A. RISK FACTORS The risk factors described below, as well as the other information included in this Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the "Annual Report"), should be carefully considered.
The importance of having access to the debt markets is enhanced by the fact that TVA, unlike most utilities, relies almost entirely on debt capital, since as a governmental instrumentality, TVA cannot issue equity securities.
The importance of having access to the debt markets is enhanced by the fact that TVA, unlike most utilities, relies almost entirely on debt capital, since as a governmental entity, TVA cannot issue equity securities.
Net power proceeds are the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and payments to states and counties in lieu of taxes, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any 51 Table of Contents power facility or interest therein.
Net power proceeds are the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and payments to states and counties in lieu of taxes, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein.
Examples of circumstances that may disrupt, or materially increase the cost of, the future delivery of fuel, purchased power, contracted services, or other critical supplies include but are not limited to cyber attacks; war or physical attacks, including the wars in Ukraine and Israel; political developments, international trade restrictions or tariffs, or legal actions; mine closures or reduced mine production; increase in demand for power by other power systems which reduces the amount of power that is available for purchase by TVA; increases in fuel exports; environmental regulations affecting TVA's suppliers; transportation or delivery constraints; the failure of suppliers to timely deliver the services or supplies to TVA at budgeted costs due to force majeure events, forced outages not caused by force majeure events, opportunistic non-performance or intentional defaults by suppliers; shortages of raw materials; supply chain difficulties; increased cost of components and labor; strikes or work stoppages; inflation; availability of personnel being impacted by regional health emergencies; or similar events.
Examples of circumstances that may disrupt, or materially increase the cost of, the future delivery of fuel, purchased power, contracted services, or critical supplies include cyber attacks; war or physical attacks; political developments, international trade restrictions or tariffs, or legal actions; mine closures or reduced mine production; increase in demand for power by other power systems which reduces the amount of power that is available for purchase by TVA; increases in fuel exports; environmental regulations affecting TVA's suppliers; transportation or delivery constraints; the failure of suppliers to timely deliver the services or supplies to TVA at budgeted costs due to force majeure events, forced outages not caused by force majeure events, or opportunistic non-performance or intentional defaults by suppliers; shortages of raw materials; supply chain difficulties; increased cost of components and labor; strikes or work stoppages; inflation; availability of personnel being impacted by regional health emergencies; or similar events.
The anti-cherrypicking provision precludes FERC from ordering TVA to transmit power for others if that power would be consumed within the TVA service area. State service territory laws limit unregulated third parties’ ability to sell electricity to consumers. From time to time, there have been efforts to circumvent the protection of the anti-cherrypicking provision.
The anti-cherrypicking provision precludes FERC from ordering TVA to transmit power for others if that power would be consumed within the TVA service area. State 37 Table of Contents service territory laws limit unregulated third parties’ ability to sell electricity to consumers. From time to time, there have been efforts to circumvent the protection of the anti-cherrypicking provision.
In such a case, a cyber attack could compromise sensitive data, significantly disrupt operations, require additional expenditures for 47 Table of Contents cybersecurity, negatively affect TVA’s cash flows, results of operations, financial condition, and reputation, and pose health and safety risks to TVA personnel and the customers and communities that TVA serves.
In such a case, a cyber attack could compromise sensitive data, significantly disrupt operations, require additional expenditures for cybersecurity, negatively affect TVA’s cash flows, results of operations, financial condition, and reputation, and pose health and safety risks to TVA personnel and the customers and communities that TVA serves.
TVA purchases coal, uranium, natural gas, fuel oil, and electricity from a number of suppliers. TVA contracts for conversion of uranium into nuclear fuel and purchases other items, such as anhydrous ammonia, liquid oxygen, or replacement parts that are critical to the operation of certain generation assets.
TVA purchases coal, uranium, natural gas, fuel oil, and electricity from a number of suppliers. TVA contracts for conversion of uranium into nuclear fuel and purchases other items, such as anhydrous ammonia, liquid oxygen, or replacement parts that are critical to the operation of some of its generation assets.
Although the plan has been frozen to new participants since July 1, 2014, TVA's payment obligation under the pension plan is substantial, and changes in any one or more of these factors could cause TVA's benefit expenditures under the plan to increase and significantly exceed TVA's planned contributions.
Although the plan has been frozen to new participants since July 1, 2014, TVA's payment obligation under the pension plan is substantial, and changes in any one or more of these factors could cause TVA's benefit expenditures under the plan to 43 Table of Contents increase and significantly exceed TVA's planned contributions.
Moreover, federal legislation could impose revenue-raising measures on the nuclear industry to pay claims exceeding the limit for a single incident under the Price-Anderson Act.
Moreover, federal legislation could impose revenue-raising measures on the U.S. nuclear industry to pay claims exceeding the limit for a single incident under the Price-Anderson Act.
TVA uses regulatory accounting to defer certain costs. To qualify for regulatory accounting, costs must meet certain accounting criteria and be approved for regulatory accounting treatment by the TVA Board in its capacity as TVA's regulator.
To qualify for regulatory accounting, costs must meet certain accounting criteria and be approved for regulatory accounting treatment by the TVA Board in its capacity as TVA's regulator.
Further, the availability or price of insurance may be impacted by TVA's acts or omissions, such as a failure to properly maintain a facility, or events outside of TVA's control, such 44 Table of Contents as an equipment manufacturer's inability to meet a guideline, specification, or requirement. Decommissioning Costs .
Further, the availability or price of insurance may be impacted by TVA's acts or omissions, such as a failure to properly maintain a facility, or events outside of TVA's control, such as an equipment manufacturer's inability to meet a guideline, specification, or requirement. Decommissioning Costs .
Accordingly, problems at other utilities as well as at TVA's facilities, including disruptions or black-outs caused by an event such as a severe storm, generator or transmission facility outage on a neighboring system, or the actions of a neighboring utility, may cause interruptions in TVA's service to its customers, 46 Table of Contents increase congestion on the transmission grid, or reduce service reliability.
Accordingly, problems at other utilities as well as at TVA's facilities, including disruptions or black-outs caused by an event such as a severe storm, wildfires, a generator or transmission facility outage on a neighboring system, or the actions of a neighboring utility, may cause interruptions in TVA's service to its customers, increase congestion on the transmission grid, or reduce service reliability.
A single generating facility could cost hundreds of millions of dollars or even billions depending on the fuel type, and TVA's ability to use new debt to fund strategic capital investments will decrease as TVA's debt increases and as the cost of projects increases.
A single generating facility could cost hundreds of millions of dollars or even billions depending on its planned size and fuel type, and TVA's ability to use new debt to fund strategic capital investments will decrease as TVA's debt increases and as the cost of projects increases.
Key characteristics of TVA’s business defined by legislation include (1) the TVA Board's ratemaking authority; (2) the current competitive environment, which is defined by the fence and the anti-cherrypicking provision; and (3) TVA’s status as a corporate agency and instrumentality of the United States.
Key characteristics of TVA’s business established by statute include (1) the TVA Board's ratemaking authority; (2) the current competitive environment, which is defined by the fence and the anti-cherrypicking provision; and (3) TVA’s status as a corporate agency and instrumentality of the United States.
TVA's transmission facilities are directly interconnected with the transmission facilities of neighboring utilities and are thus part of the larger interstate power transmission grid. Certain of TVA's generation and transmission assets are critical to maintaining reliability of the transmission system. Additionally, TVA uses assets that belong to third parties to transmit power and maintain reliability.
TVA's transmission facilities are directly interconnected with the transmission facilities of neighboring utilities and are part of the larger interstate power transmission grid. Some of TVA's generation and transmission assets are critical to maintaining reliability of the transmission system. Additionally, TVA uses assets that belong to third parties to transmit power and maintain reliability.
The increasing installation of intermittent sources of power, such as wind and solar, as well as the retirement of coal-fired plants, may place additional strain on TVA's and neighboring systems, and additional transmission upgrades may be required to maintain reliability.
The increasing installation of intermittent sources of power, such as wind and solar, as well as the retirement of dispatchable generation resources, such as coal-fired plants, may place additional strain on TVA's and neighboring systems, and additional transmission upgrades may be required to maintain reliability.
TVA, together with owners of TVA securities, may be impacted by downgrades of TVA's credit ratings. TVA’s current credit ratings are not based solely on its underlying business or financial condition but are based to a large extent on TVA's status as a wholly-owned government corporation and the legislation that defines TVA’s business structure.
TVA, together with owners of TVA securities, may be impacted by downgrades of TVA's credit ratings. TVA’s current credit ratings are not based solely on its underlying business or financial condition but are based to a large extent on TVA's status as a wholly-owned government corporation and the laws that define TVA’s business structure.
TVA also purchases power from other power producers when the purchase of such power is appropriate due to economic opportunities or operational concerns.
TVA also purchases power from other power producers when the purchase of such power is appropriate due to economic opportunities or operational limitations.
If the value of the investments held in the NDT or the pension fund were to either decrease or fail to increase in accordance with assumed rates of return, TVA may be required to make substantial contributions to these funds.
If the value of the investments held in the NDT or the pension plan assets were to either decrease or fail to increase in accordance with assumed rates of return, TVA may be required to make substantial contributions to these funds.
Although TVA cannot predict the outcome of the individual matters in which TVA is involved or will become involved, the resolution of 42 Table of Contents these matters could require TVA to make expenditures in excess of established reserves and in substantial amounts.
Although TVA cannot predict the outcome of the individual matters in which TVA is involved or will become involved, the resolution of these matters could require TVA to make expenditures in excess of established reserves and in substantial amounts.
If these assets or their supporting infrastructure were to fail to operate as planned, if necessary repairs or upgrades were delayed or could not be completed as quickly as anticipated, or if necessary spare parts were unavailable, TVA: • 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 generation or 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, may be required to pay higher premiums for coverage, or may have to make certain repairs or upgrades to maintain insurance or to avoid higher premiums; • May be unable to operate the assets for a significant period of time or in the same manner as previously operated; and/or • May not be able to meet its contractual obligations to deliver power.
If these assets or their supporting infrastructure fail to operate as planned, if necessary repairs or upgrades are delayed or cannot be completed as quickly as anticipated, or if necessary spare parts are unavailable, TVA: • 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 generation or 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 achieve reliability standards; 40 Table of Contents • May be unable to maintain insurance on affected facilities, may be required to pay higher premiums for coverage, or may have to make certain repairs or upgrades to maintain insurance or to avoid higher premiums; • May be unable to operate the assets for a significant period of time or in the same manner as previously operated; and/or • May not be able to meet its contractual obligations to deliver power.
Global conflicts and terrorism, as well as any retaliatory military action by the United States and its allies, may have an adverse effect on TVA through increased political, economic, and financial market instability and volatility in the prices for natural gas and oil.
Global conflicts and terrorism, such as those in Ukraine and Israel, as well as any retaliatory military action by the United States and its allies, may have an adverse effect on TVA through increased political, economic, and financial market instability and volatility in the prices for natural gas and oil.
In determining TVA’s power generation assets should consist of a mix of nuclear, coal-fired, natural gas-fired, and renewable power sources, including hydroelectric, TVA considered various factors, including the anticipated availability of its nuclear units, the availability of non-nuclear facilities, the forecasted cost of natural gas and coal, the forecasted demand for electricity, its carbon reduction aspirations, and environmental compliance including the expense of adding air pollution controls to its coal-fired units.
For example, in determining TVA’s power generation assets should consist of a mix of nuclear, coal-fired, natural gas-fired, and renewable power sources, including hydroelectric, TVA considered various factors, including the anticipated availability of its nuclear units, the availability of non-nuclear facilities, the forecasted cost of natural gas and coal, the forecasted demand for electricity, and environmental compliance requirements, including the expense of adding air pollution controls to its coal-fired units.
A downgrade below a contractual threshold may specifically prevent TVA from borrowing under four credit facilities totaling $2.7 billion or posting letters of credit as collateral under these facilities. As of September 30, 2024, there were $566 million of letters of credit outstanding under these facilities.
A downgrade below a contractual threshold may specifically prevent TVA from borrowing under four credit facilities totaling $2.7 billion or posting letters of credit as collateral under these facilities. As of September 30, 2025, there were $498 million of letters of credit outstanding under these facilities.
If any of these assumptions materially change or are impacted by subsequent events, TVA's generation mix may not address its operational needs in the most efficient and cost-effective manner. Additionally, reallocating the mix of power generation assets from the planned mix may result in additional capital and operational expense.
If any of these assumptions prove to be materially inaccurate or are impacted by subsequent events, TVA's generation mix may not address its operational needs in the most efficient and cost-effective manner. Additionally, reallocating the mix of power generation assets from the planned mix may result in additional capital and operational expense.
If Congress takes any action that 49 Table of Contents effectively alters any of these characteristics, TVA's credit ratings could be downgraded. Although TVA Bonds are not obligations of the United States, TVA, as a corporate agency and instrumentality of the United States, may be impacted by a downgrade of the United States’ sovereign credit ratings.
If Congress takes any action that effectively alters any of these characteristics, TVA's credit ratings could be downgraded. Although TVA Bonds are not obligations of or guaranteed by the United States, TVA, as a corporate agency and instrumentality of the United States, may be impacted by a downgrade of the United States’ sovereign credit ratings.
As a governmental entity, TVA has certain legal requirements that prevent it from responding as quickly to potential changes in the market or requests from current or potential customers as might be desired or in comparison to other utilities.
As a governmental entity, TVA has legal obligations that prevent it from responding as quickly to potential changes in the market or requests from current or prospective customers as might be desired or in comparison to other utilities.
Because of TVA's status as a government corporation and TVA's role as the primary power provider for its service territory, individuals, groups, or nation states may target TVA with physical attacks or threats of such attacks.
Because of TVA's status as a governmental entity and TVA's role as the primary power provider for its service territory, individuals, groups, or nation states may target TVA with physical attacks or threats of such attacks.
For a discussion of certain current material legal proceedings, see Note 22 — Commitments and Contingencies — Legal Proceedings .
For a discussion of certain current material legal proceedings, see Note 23 — Commitments and Contingencies — Legal Proceedings .
If one of TVA's suppliers were to fail to perform under the terms of its contract with TVA, TVA might have to purchase replacement fuel, power, or other critical supplies, perhaps at a significantly higher price than TVA is entitled to pay under the contract. TVA may not be able to recover this difference from the original supplier.
If one of TVA's suppliers were to fail to perform under the terms of its contract with TVA, TVA might have to purchase replacement fuel, power, or critical supplies, perhaps at a higher price. TVA may not be able to recover this difference from the original supplier.
These may include, but are not limited to, the following: • A divestment or forced sale of TVA assets, which could trigger change of control provisions in certain material contracts, in addition to other costs and potential business disruptions; • A revocation of the TVA Board’s sole authority to set electricity rates under the TVA Act, which could result in material adverse impacts on TVA’s ability to meet financial obligations; • A restriction on TVA accessing or controlling its funds that are on deposit in its U.S.
These may include the following: • A divestment or forced sale of TVA assets, which could trigger change of control provisions in some material contracts, in addition to other costs and potential business disruptions, as well as the potential privatization of TVA; • A revocation of the TVA Board’s sole authority to set electricity rates under the TVA Act, which could result in material adverse impacts on TVA’s ability to meet financial obligations; • A restriction on TVA accessing, controlling, or disbursing its funds that are on deposit in its U.S.
The value of the U.S. dollar compared with other currencies has fluctuated widely in recent years, including as a result of changes in political and economic conditions. If not effectively managed, foreign currency exposure could negatively impact TVA's counterparty risk, cash flows, results of operations, and financial condition. The market for TVA Bonds might be limited.
The value of the U.S. dollar compared with other currencies has fluctuated widely in recent years, including as a result of changes in political and economic conditions. If not effectively managed, foreign currency exposure could negatively impact TVA's counterparty risk, cash flows, results of operations, and financial condition.
Although TVA carries certain types of nuclear insurance, the amount that TVA is required to pay in connection with a nuclear incident could significantly exceed the amount of coverage provided by insurance.
Although TVA carries some types of nuclear insurance, the amount that TVA is required to pay in connection with a nuclear incident in the United States could significantly exceed the amount of coverage provided by insurance.
Treasury account; • A lowering of TVA’s debt ceiling from the $30.0 billion outstanding provided for in the TVA Act, which could inhibit TVA’s ability to raise capital necessary for essential business functions or for investing in carbon free technologies; • A restriction on TVA’s authority to manage the Tennessee River system with power system operations, which could negatively impact TVA’s operations of certain electric generation facilities; and • A limitation on TVA’s ability to pay its CEO or other employees competitive wages, which could negatively impact TVA’s ability to hire and retain talent needed to effectively fulfill TVA’s mission.
Treasury account; • A lowering of TVA’s debt ceiling from the $30.0 billion outstanding provided for in the TVA Act, which could inhibit TVA’s ability to raise capital necessary for essential business functions; • A restriction on TVA’s authority to manage the Tennessee River system with power system operations, which could negatively impact TVA’s operations of some electric generation facilities; and • A limitation on TVA’s ability to pay its Chief Executive Officer ("CEO"), key officers, or other employees competitive wages, which could negatively impact TVA’s ability to hire and retain talent needed to effectively fulfill TVA’s mission.
Such uncertainties include customer energy-efficiency programs that are designed to reduce energy demand; energy-efficiency efforts by customers not related to TVA’s energy-efficiency programs; increased customer use of DER, such as solar panels and other technologies, as well as the use of energy storage technologies; and macroeconomic factors impacting economic growth or contraction within TVA’s service territory, which could affect energy demand.
Such uncertainties include customer energy-efficiency programs that are designed to reduce energy demand; energy-efficiency efforts by customers not related to TVA’s energy-efficiency programs; increased customer use of DER, such as solar panels and other technologies, as well as the use of energy storage technologies; inability of TVA's LPCs and directly served customers to pay their power bills; and macroeconomic factors impacting economic growth or contraction within TVA’s service territory, which could affect energy demand.
Future acts of terrorism could be directed against companies operating in fuel and energy transportation and distribution, which may adversely affect TVA’s ability to do business. TVA may experience increased costs to implement increased security, including additional plant security and security personnel.
Future acts of terrorism could be directed against companies operating in fuel and energy transportation and distribution, which may adversely affect the operation of TVA’s business. TVA may experience increased costs to implement enhanced security measures, including additional plant security and security personnel.
This occurrence may restrict TVA's ability to raise debt capital to acquire new power program assets or maintain existing ones, to carry out upgrades or improvements to existing assets or build new ones, to purchase power under long-term PPAs, or to meet regulatory requirements.
This occurrence may restrict TVA's ability to raise debt capital to acquire new power program assets or maintain existing ones, to carry out upgrades or improvements to existing assets or build new ones, or to meet regulatory requirements.
In addition, following a physical attack or threat, TVA may incur increased costs for added security measures, including additional physical plant security and security personnel, increased capability, or other necessary measures. TVA's assets or their supporting infrastructure may not operate as planned.
In addition, following a physical attack or threat, TVA may incur increased costs for added security measures, including additional physical plant security and security personnel, increased capability, or other necessary measures and potentially be responsible for resulting damages to others. TVA's assets or their supporting infrastructure may not operate as planned.
REGULATORY, LEGISLATIVE, AND LEGAL RISKS TVA may become subject to additional environmental regulations or may be required to expend significant funds in the future to comply with current regulations.
REGULATORY, LEGISLATIVE, AND LEGAL RISKS TVA may become subject to new environmental laws, regulations, or orders or may be required to expend significant funds in the future to comply with current laws, regulations, or orders. TVA is subject to significant environmental laws, regulations, and orders.
Moreover, EPA's new CCR rule will likely require TVA to incur significant additional costs with implementing closure, and EPA has recently interpreted its CCR rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.
Moreover, EPA's revised CCR rule may require TVA to incur significant additional costs with implementing closure, and EPA interpreted its CCR rule in a way that could challenge TVA's predominant closure methodology for many units, thereby potentially creating significant additional costs with implementing closure.
TVA employs extensive cyber safeguards and works with industry specialists and relevant governmental authorities to deter, stop, or mitigate cyber attacks. Despite implementation of these security measures, TVA's facilities and information infrastructure may be subject to or vulnerable to disability, failures, or unauthorized access.
These attacks may be carried out by individuals, groups, or even nation states. TVA employs extensive cyber safeguards and works with industry specialists and relevant governmental authorities to deter, stop, or mitigate cyber attacks. Despite implementation of these security measures, TVA's facilities and information infrastructure may be subject to or vulnerable to disability, failures, or unauthorized access.
These pressures may reduce the demand for TVA power. If TVA does not or cannot adapt to this pressure by adequately changing its business model, TVA's financial condition and results of operations could be negatively affected. TVA's reputation may be negatively impacted. As with any company, TVA's reputation is a vital element of its ability to effectively conduct its business.
If TVA does not or cannot adapt to this pressure by adequately changing its business model, TVA's cash flows, financial condition, and results of operations could be negatively affected. TVA's reputation may be negatively impacted. As with any company, TVA's reputation is a vital element of its ability to effectively conduct its business.
Among other projects, TVA is building new natural gas-fired generation facilities, seeking to improve the reliability and resiliency of its transmission system, undertaking repairs at certain hydroelectric facilities and dams, and closing some coal-fired plants and their supporting infrastructure.
Among other projects, TVA is building new natural gas-fired generation facilities, seeking to improve the reliability and resiliency of its transmission system, undertaking repairs at certain hydroelectric facilities and dams, and closing CCR facilities.
The ultimate resolution of matters relating to CCR obligations could have a material adverse effect on TVA's cash flows, results of operation, and financial condition. TVA relies on certain assumptions about the future that may prove inaccurate, including when determining the appropriate mix of generation assets. TVA uses certain assumptions that are presently justifiable to develop its future plans.
The ultimate resolution of matters relating to CCR obligations could have a material adverse effect on TVA's cash flows, results of operation, and financial condition. TVA relies on certain assumptions about the future that may prove inaccurate, including when determining the appropriate mix of generation assets and when and to what extent to update its transmission system.
Availability of Components. Nuclear facilities require specialized components and access to intellectual property for operation. As the number of reliable suppliers of such components decreases and access to intellectual property is reduced, the availability of the components and access to the intellectual property also will likely decrease.
As the number of reliable suppliers of such components decreases and access to intellectual property is reduced, the availability of the components and access to the intellectual property also will likely decrease.
For example, TVA is required to comply with the National Environmental Policy Act ("NEPA"), which requires environmental reviews to be completed before TVA decides to pursue certain projects. The delay in responding to requests could damage relationships with current customers, deter potential customers from moving into TVA's service territory, or damage TVA's reputation.
For example, TVA is required to comply with NEPA, which requires environmental reviews to be completed before TVA decides to pursue certain projects. The delay in responding to requests could damage relationships with current customers, limit TVA's ability to take action to execute on its plans quickly, deter potential customers from moving into TVA's service territory, or damage TVA's reputation.
Moreover, some investors may no longer be able to hold TVA securities after specified dates if TVA's performance on certain metrics fails to meet investor requirements on metrics such as the carbon intensity, carbon emissions, or operation of thermal coal-fired or natural gas-fired assets. In addition, legal limitations may affect the ability of banks and others to invest in Bonds.
Moreover, some investors may no longer be able to hold TVA securities after specified dates if TVA's performance on certain metrics fails to meet investor requirements on metrics such as the carbon intensity, carbon emissions, or operation of thermal coal-fired, natural gas-fired assets, or nuclear.
The additional proceedings could involve, among other things, challenges to TVA’s CCR facilities, challenges to TVA's natural gas-fired plants and related pipelines, suits asserting nuisance claims under state law related to coal-fired plants, challenges to the anti-cherrypicking provision, challenges under NEPA, challenges under the Freedom of Information Act, and challenges to TVA’s authority to set rates and enter into contracts.
The additional proceedings could involve, among other things, challenges to TVA’s CCR facilities, challenges to TVA's natural gas-fired plants and related pipelines, suits asserting nuisance claims under state law related to coal-fired plants, challenges under NEPA, challenges under the Freedom of Information Act, tort actions arising from accidents on TVA's property, challenges to TVA's immunity to certain actions, and challenges to TVA’s authority to set rates and enter into contracts.
Additionally, the theft, damage, or improper disclosure of sensitive data may subject TVA to penalties and claims from third parties or increased governmental oversight. Cyber attacks on third parties or the failure of their technology infrastructure could interfere with or harm TVA.
Additionally, the theft, damage, or improper disclosure of sensitive data may subject TVA to penalties and claims from third parties or increased governmental oversight. These claims could negatively affect TVA's cash flows, results of operations, financial condition, and reputation. Cyber attacks on third parties or the failure of their technology infrastructure could interfere with or harm TVA.
TVA relies on information technology systems, including the internet and cloud systems, to support a variety of business processes and activities and to store sensitive data. Some of TVA’s information technology systems may be dependent upon cloud service providers.
Any significant failure or malfunction of such information technology systems may result in disruptions of TVA’s operations. TVA relies on information technology systems, including the internet and cloud systems, to support a variety of business processes and activities and to store sensitive data. Some of TVA’s information technology systems may be dependent upon cloud service providers.
For example, national banks may purchase TVA Bonds for their own accounts in an amount not to exceed 10 percent of unimpaired capital and surplus.
In addition, legal limitations may affect the ability of banks and others to invest in Bonds. For example, national banks may purchase TVA Bonds for their own accounts in an amount not to exceed 10 percent of unimpaired capital and surplus.
Similarly, resolution of any such proceedings may require TVA to change its business practices or procedures, incur additional capital or operational expense, change how it operates its fossil-fueled units, cease construction of new natural gas-fired plants, reduce emissions to a greater extent or at a faster pace than TVA had planned, close existing CCR facilities sooner than planned, close existing CCR facilities using a different methodology than planned, build new CCR facilities sooner than planned, build new CCR facilities that were not planned, cease operation of some coal-fired units, adjust its rates, or terminate or modify contracts.
Similarly, resolution of any such proceedings may require TVA to change its business practices or procedures, incur additional capital or operational costs, change how it operates its fossil-fueled units, cease construction of new natural gas-fired plants, reduce emissions to a greater extent or at a faster pace than TVA had planned, comply with new or additional requirements related to CCR management, cease operation of some coal-fired units, adjust its rates, or terminate or modify contracts.
TVA's governmental status may interfere with its ability to quickly respond to the needs of its current or potential customers or to act solely in the interest of its ratepayers.
TVA's governmental status may interfere with its ability to quickly respond to the needs of its current or prospective customers or to act solely in the interest of its ratepayers and may impose additional obligations on TVA.
TVA manages CCR in dedicated, protective facilities operated by TVA. TVA has closed some of these facilities and is in the process of closing others. Many of these facilities do not have liners, as they were constructed prior to the requirement that such facilities be built with liners.
TVA has closed some of these facilities and is in the process of closing others. Many of these facilities do not have liners, as they were constructed prior to the requirement that such facilities be built with liners. TVA has been ordered by TDEC to undertake investigations at all CCR facilities in Tennessee.
The design of any system of financial controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. 53 Table of Contents TVA may be unable to use regulatory accounting for some or all costs.
The design of any system of financial controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
As a result, power curtailments, brownouts, or even blackouts could occur. Global conflicts, terrorist activities, or military actions could adversely affect TVA’s business.
As a result, power curtailments, brownouts, or even blackouts could occur that could negatively impact TVA's reputation. 41 Table of Contents Global conflicts, terrorist activities, or military actions could adversely affect TVA’s business.
Further, limitations on global trade resulting from future and past pandemics and global conflicts, or other limitations on global shipping, such as international trade restrictions or sanctions, could materially decrease the availability or increase the cost of necessary or desired equipment. Cost of Nuclear Fuel.
Further, limitations on global trade resulting from pandemics, trade wars, tariffs, sanctions, military conflicts, or other limitations on global commerce could materially decrease the availability or increase the cost of necessary or desired equipment. Cost of Nuclear Fuel.
TVA may have difficulty adapting its business model to changes in the utility industry and customer preferences. The traditional business model for power production, selling power from centrally located plants, is facing pressure from a variety of sources, including the potential for self-generation by current or potential customers, new technologies such as energy storage, and increased energy efficiency.
The traditional business model for power production, selling power from centrally located plants requiring extensive transmission networks, is facing pressure from a variety of sources, including the potential for self-generation by current or potential customers, new technologies such as energy storage, and increased energy efficiency. These pressures may reduce the demand for TVA power.
Additionally, TVA may fail to fully capitalize on new technology, including AI, due to cybersecurity risk aversion or unique regulations applicable to TVA, leading to a loss in competitive edge or inability to efficiently solve future problems. TVA is subject to a variety of market risks that may negatively affect TVA's cash flows, results of operations, and financial condition.
Additionally, TVA may fail to fully capitalize on new technology, including AI, due to cybersecurity risk aversion or unique regulations applicable to TVA, leading to a loss in competitive edge or inability to efficiently solve future problems.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe risk committee oversees a subordinate committee that provides comprehensive risk oversight of TVA’s security, artificial intelligence, privacy, and technology risks consistent with TVA’s mission, strategic imperatives, and approved financial and operational plans. 55 Table of Contents TVA’s governance, oversight, execution, and support activities include quarterly Enterprise Risk and Assurance updates to the Audit Committee, an annual alignment with TVA’s broader risk management framework and business planning initiatives, and tactical and intentional initiatives focused on reducing risk, increasing maturity, and helping ensure regulatory compliance and adherence.
Biggest changeTVA’s governance, oversight, execution, and support activities include quarterly Enterprise Risk and Assurance updates to the Audit Committee, an annual alignment with TVA’s broader risk management framework and business planning initiatives, and tactical and intentional initiatives focused on reducing risk, increasing maturity, and helping ensure regulatory compliance and adherence.
These programs are based on principles from the National Institute of Standards and Technology and certain regulatory standards that are designed to protect against cybersecurity incidents, including the North American Electric Reliability Corporation Critical Infrastructure Protection Standards and Nuclear Regulatory Commission cybersecurity standards, and are periodically assessed by third-party experts.
These programs are based on principles from the National Institute of Standards and Technology and certain regulatory standards that are designed to protect against cybersecurity incidents, including the North 49 Table of Contents American Electric Reliability Corporation Critical Infrastructure Protection Standards and Nuclear Regulatory Commission cybersecurity standards, and are periodically assessed by third-party experts.
Reporting to the Audit Committee and the TVA Board is the risk counsel comprised of TVA’s top leaders and the Chief Risk Officer (“CRO”), which is responsible for the highest level of management oversight of risk at TVA.
Reporting to the Audit Committee and the TVA Board is the risk council comprised of TVA’s top leaders and the Chief Risk Officer (“CRO”), which is responsible for the highest level of management oversight of risk at TVA.
The risk committee’s primary purpose is to oversee TVA’s management of enterprise-wide risks with policy implications reported to the TVA Board or a designated TVA Board committee.
The risk council’s primary purpose is to oversee TVA’s management of enterprise-wide risks with policy implications reported to the TVA Board or a designated TVA Board committee. The risk council oversees a subordinate committee that provides comprehensive risk oversight of TVA’s security, artificial intelligence, privacy, and technology risks consistent with TVA’s mission, strategic imperatives, and approved financial and operational plans.

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(3) As of September 30, 2024, TVA had two idled units at Allen CT Facility (Units 17 and 18) and three units that were in long-term outage and unavailable for service at Wilbur Hydroelectric Facility (Units 1-3).
Biggest change(9) As of September 30, 2025, TVA had three units that were in long-term outage and unavailable for service at Wilbur Hydroelectric Facility (Units 1-3). These units are included in their respective locations in the table above; however, the capability from these units is excluded. (10) Includes 86 MW of summer net capability associated with Hiwassee Hydro Unit 2.
The Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution") prohibits TVA (1) from mortgaging any part of its power properties and (2) from disposing of all or any substantial portion of these properties unless TVA provides for a continuance of the interest, principal, and sinking fund payments due and to become due on all outstanding Bonds, or for the retirement of such Bonds. 58 Table of Contents
The Basic Tennessee Valley Authority Power Bond Resolution adopted by the TVA Board on October 6, 1960, as amended on September 28, 1976, October 17, 1989, and March 25, 1992 (the "Basic Resolution") prohibits TVA (1) from mortgaging any part of its power properties and (2) from disposing of all or any substantial portion of these properties unless TVA provides for a continuance of the interest, principal, and sinking fund payments due and to become due on all outstanding Bonds, or for the retirement of such Bonds.
Additionally, TVA manages over 153 agreements for commercial recreation (such as campgrounds and marinas). As part of its stewardship responsibilities, TVA approval is required to be obtained before any obstruction affecting navigation, flood control, or public lands can be constructed across, along, or in the Tennessee River and its tributaries.
Additionally, TVA manages 154 agreements for commercial recreation (such as campgrounds and marinas). As part of its stewardship responsibilities, TVA approval is required to be obtained before any obstruction affecting navigation, flood control, or public lands can be constructed across, along, or in the Tennessee River and its tributaries.
Generating Properties At September 30, 2024, TVA-operated generating assets consisted of seven nuclear units, 24 active coal-fired units, 70 simple-cycle gas units (68 active units and two idled units), one cogeneration unit, 14 combined-cycle gas power blocks, 109 conventional hydroelectric units (106 active units and three units in long-term outage and unavailable for service), four pumped-storage hydroelectric units, five diesel generator units, and nine operating solar installations.
Generating Properties At September 30, 2025, TVA-operated generating assets consisted of seven nuclear units, 24 active coal-fired units, 68 simple-cycle gas units, one cogeneration unit, 10 aeroderivative units, 14 combined-cycle gas power blocks, 109 conventional hydroelectric units (106 active units and three units in long-term outage and unavailable for service), four pumped-storage hydroelectric units, five diesel generator units, and nine operating solar installations.
See Item 1, Business — Power Supply and Load Management Resources — Power Purchase and Other Agreements for information on TVA's renewable and nonrenewable power purchase contracts by resource type and location. 56 Table of Contents The following table summarizes TVA's summer net capability in MW at September 30, 2024: SUMMER NET CAPABILITY At September 30, 2024 Source of Capability Location Number of Units Summer Net Capability (MW) Date First Unit Placed in Service (CY) Date Last Unit Placed in Service (CY) TVA-Operated Generating Facilities Nuclear Browns Ferry Alabama 3 3,662 1974 1977 Sequoyah Tennessee 2 2,292 1981 1982 Watts Bar Tennessee 2 2,278 1996 2016 Total Nuclear 7 8,232 Coal-Fired Cumberland Tennessee 2 2,470 1973 1973 Gallatin Tennessee 4 976 1956 1959 Kingston Tennessee 9 1,298 1954 1955 Shawnee Kentucky 9 1,071 1953 1955 Total Coal-Fired 24 5,815 Natural Gas and/or Oil-Fired (1)(2) Simple-Cycle Combustion Turbine Allen (3) Tennessee 4 92 1971 1972 Brownsville Tennessee 4 425 1999 1999 Colbert Alabama 11 1,041 1972 2023 Gallatin Tennessee 8 534 1975 2000 Gleason Tennessee 3 463 2000 2000 Johnsonville Tennessee 13 708 1975 2000 Kemper Mississippi 4 273 2002 2002 Lagoon Creek Tennessee 12 844 2001 2002 Marshall County Kentucky 8 571 2002 2002 Paradise Kentucky 3 681 2023 2023 Subtotal Simple-Cycle Combustion Turbine 70 5,632 Combined-Cycle Combustion Turbine Ackerman (4) Mississippi 1 713 2007 2007 Allen (5) Tennessee 1 1,106 2018 2018 Caledonia (6) Mississippi 3 819 2003 2003 John Sevier (7) Tennessee 1 871 2012 2012 Lagoon Creek (8) Tennessee 1 596 2010 2010 Magnolia Mississippi 3 951 2003 2003 Paradise (9) Kentucky 1 1,100 2017 2017 Southaven Mississippi 3 802 2003 2003 Subtotal Combined-Cycle Combustion Turbine 14 6,958 Co-Generation Johnsonville Tennessee 1 66 1975 2000 Total Natural Gas and/or Oil-Fired 85 12,656 Hydroelectric Conventional Plants Alabama 36 1,169 1925 1962 Georgia 2 37 1931 1956 Kentucky 5 225 1944 1948 North Carolina 6 478 1940 1956 Tennessee (3)(10) 60 1,848 1912 1972 Pumped-Storage (11) Tennessee 4 1,715 1978 1979 Total Hydroelectric 113 5,472 Diesel Generator Meridian Mississippi 5 9 1998 1998 TVA Non-hydro Renewable Resources (12) 1 TVA Other Nonrenewable Resources (12) 5 Total TVA-Operated Generating Facilities Summer Net Capability 32,190 Notes (1) See Generating Properties above for a discussion of TVA-operated natural gas and/or oil-fired facilities subject to leaseback and long-term lease arrangements.
See Item 1, Business — Power Supply and Load Management Resources — Power Purchase and Other Agreements for information on TVA's renewable and nonrenewable power purchase contracts by resource type and location. 51 Table of Contents The following table summarizes TVA's summer net capability in MW at September 30, 2025: SUMMER NET CAPABILITY At September 30, 2025 Source of Capability Location Number of Units Summer Net Capability (MW) Date First Unit Placed in Service (CY) Date Last Unit Placed in Service (CY) TVA-Operated Generating Facilities Nuclear Browns Ferry Alabama 3 3,662 1974 1977 Sequoyah Tennessee 2 2,292 1981 1982 Watts Bar Tennessee 2 2,348 1996 2016 Total Nuclear 7 8,302 Coal-Fired Cumberland Tennessee 2 2,470 1973 1973 Gallatin Tennessee 4 976 1956 1959 Kingston Tennessee 9 1,298 1954 1955 Shawnee Kentucky 9 1,071 1953 1955 Total Coal-Fired 24 5,815 Natural Gas and/or Oil-Fired (1) Simple-Cycle Combustion Turbine Allen Tennessee 2 92 1971 1972 Brownsville Tennessee 4 425 1999 1999 Colbert Alabama 11 998 1972 2023 Gallatin Tennessee 8 534 1975 2000 Gleason Tennessee 3 463 2000 2000 Johnsonville (2) Tennessee 13 208 1975 2000 Kemper Mississippi 4 273 2002 2002 Lagoon Creek Tennessee 12 844 2001 2002 Marshall County Kentucky 8 571 2002 2002 Paradise Kentucky 3 681 2023 2023 Subtotal Simple-Cycle Combustion Turbine 68 5,089 Combined-Cycle Combustion Turbine Ackerman (3) Mississippi 1 713 2007 2007 Allen (4) Tennessee 1 1,106 2018 2018 Caledonia (5) Mississippi 3 819 2003 2003 John Sevier (6) Tennessee 1 871 2012 2012 Lagoon Creek (7) Tennessee 1 596 2010 2010 Magnolia Mississippi 3 951 2003 2003 Paradise (8) Kentucky 1 1,100 2017 2017 Southaven Mississippi 3 802 2003 2003 Subtotal Combined-Cycle Combustion Turbine 14 6,958 Co-Generation Johnsonville Tennessee 1 66 1975 2000 Aeroderivative Combustion Turbine Johnsonville Tennessee 10 530 2025 2025 Total Natural Gas and/or Oil-Fired 93 12,643 Hydroelectric Conventional Plants Alabama 36 1,170 1925 1962 Georgia 2 37 1931 1956 Kentucky 5 224 1944 1948 North Carolina 6 478 1940 1956 Tennessee (9)(10) 60 1,874 1912 1972 Pumped-Storage (11) Tennessee 4 1,715 1978 1979 Total Hydroelectric 113 5,498 Diesel Generator Meridian Mississippi 5 9 1998 1998 TVA Non-hydro Renewable Resources (12) 1 Total TVA-Operated Generating Facilities Summer Net Capability 32,268 Notes (1) See Generating Properties above for a discussion of TVA-operated natural gas and/or oil-fired facilities subject to leaseback and long-term lease arrangements.
Natural Resource Stewardship Properties TVA operates and maintains 49 dams and manages approximately 11,000 miles of reservoir shoreline, 293,000 acres of reservoir land, 650,000 surface acres of reservoir water, and approximately 148 public recreation areas throughout the Tennessee Valley, including campgrounds, day-use areas, and boat launching ramps.
Public Land Management Reservoir Properties TVA operates and maintains 49 dams and manages approximately 11,000 miles of reservoir shoreline, 293,000 acres of reservoir land, 650,000 surface acres of reservoir water, and approximately 150 public recreation areas throughout the Tennessee Valley, including campgrounds, day-use areas, and boat launching ramps.
Transmission Properties TVA's transmission system interconnects with systems of surrounding utilities and, at September 30, 2024, consisted primarily of approximately 2,500 circuit miles of 500 kilovolt, 12,000 circuit miles of 161 kilovolt, and 1,900 circuit miles of other voltage transmission lines; 5,196 miles of fiber optic lines; 583 transmission substations, power switchyards, and switching stations; and 1,351 customer connection points (customer, generation, and interconnection).
Transmission Properties TVA's transmission system interconnects with systems of surrounding utilities and, at September 30, 2025, consisted primarily of approximately 2,500 circuit miles of 500 kilovolt, 12,100 circuit miles of 161 kilovolt, and 1,900 circuit miles of other voltage transmission lines; 5,445 miles of fiber optic lines; 590 transmission substations, power switchyards, and switching stations; and 1,361 customer connection points (customer, generation, and interconnection).
(6) Caledonia Combined Cycle Plant ("Caledonia CC") is currently a leased facility operated by TVA. (7) John Sevier Combined Cycle Facility ("John Sevier CCF") is a single steam cycle unit driven by three gas turbines (3x1 configuration). (8) Lagoon Creek Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration).
(6) John Sevier Combined Cycle Facility ("John Sevier CCF") is a single steam cycle unit driven by three gas turbines (3x1 configuration). (7) Lagoon Creek Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (8) Paradise Combined Cycle Facility is a single steam cycle unit driven by three gas turbines (3x1 configuration).
(11) See Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage for a discussion of Raccoon Mountain Pumped-Storage Plant. (12) TVA owns approximately one MW of renewable solar capability among nine operating solar installations, and Allen Combined Cycle Facility has five MW of nonrenewable biomass capability.
See Item 1, Business — Power Supply and Load Management Resources — Renewable Energy Resources — Conventional Hydroelectric Dam s. (11) See Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage for a discussion of Raccoon Mountain Pumped-Storage Plant. (12) TVA owns approximately one MW of renewable solar capability among nine operating solar installations.
Summer net capability as presented in the table below reflects the expected output of individual resources at TVA’s anticipated summer demand peak. The summation of those individual resources does not include the real-time bulk electrical system operating constraints previously noted. See also Item 1A, Risk Factors — Operational Risks and Risks Related to the Environment and Catastrophic Events.
Summer net capability as presented in the table below reflects the expected output of individual resources at 50 Table of Contents TVA’s anticipated summer demand peak. The summation of those individual resources does not include the real-time bulk electrical system operating constraints previously noted.
For a discussion of these assets, see Item 1, Business — Power Supply and Load Management Resources . Net Capability Net capability is defined as the ability of an electric system, generating unit, or other system component to carry or generate power for a specified time period.
Net Capability Net capability is defined as the ability of an electric system, generating unit, or other system component to carry or generate power for a specified time period.
As of September 30, 2024, four of the combined-cycle power blocks were leased to special purpose entities ("SPEs") and leased back to TVA under long-term leases. See Note 11 — Variable Interest Entities and Note 14 — Debt and Other Obligations — Lease/Leasebacks . In addition, TVA is leasing the three Caledonia combined-cycle power blocks under a long-term lease.
As of September 30, 2025, four of the combined-cycle power blocks and 10 aeroderivative units were leased to special purpose entities ("SPEs") and leased back to TVA under long-term leases. See Note 12 — Variable Interest Entities and Note 15 — Debt and Other Obligations — Lease/Leasebacks .
These units are included in their respective locations in the table above; however, the capability from these units is excluded. 57 Table of Contents (4) Ackerman Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (5) Allen Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration).
(3) Ackerman Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). 52 Table of Contents (4) Allen Combined Cycle Facility is a single steam cycle unit driven by two gas turbines (2x1 configuration). (5) Caledonia Combined Cycle Plant ("Caledonia CC") is currently a leased facility operated by TVA.
In addition to the TVA-operated generating facilities presented in the table below, TVA also has 8,304 MWs of operating capacity available through PPAs. At September 30, 2024, these contracts were comprised of 3,206 MWs of renewable PPAs and 5,098 MWs of nonrenewable PPAs.
See also Item 1A, Risk Factors — Operational Risks and Risks Related to the Environment and Catastrophic Events. In addition to the TVA-operated generating facilities presented in the table below, TVA also has 8,482 MWs of operating capacity available through PPAs.
Removed
(2) As of September 30, 2024, 92 MW of peak firing short-term capability of simple-cycle combustion turbine units was not operational and would require additional investment for dependable use; therefore, this short-term capability is not presented in the table above.
Added
In addition, TVA is leasing the three Caledonia combined-cycle power blocks under a long-term lease. For a discussion of these assets, see Item 1, Business — Power Supply and Load Management Resources .
Removed
(9) Paradise Combined Cycle Facility is a single steam cycle unit driven by three gas turbines (3x1 configuration). (10) Includes 86 MW of summer net capability associated with Hiwassee Hydro Unit 2. See Item 1, Business — Power Supply and Load Management Resources — Renewable Energy Resources — Conventional Hydroelectric Dam s.
Added
(2) As of September 30, 2025, TVA had 10 idled units at Johnsonville Combustion Turbine Facility (Units 1-10). These units are included in their respective locations in the table above; however, the capacity from these units is excluded.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor a discussion of Legal Proceedings involving TVA, see Note 22 — Commitments and Contingencies — Legal Proceedings, which discussion is incorporated by reference into this Item 3. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 59 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Not applicable.
Biggest changeFor a discussion of Legal Proceedings involving TVA, see Note 23 — Commitments and Contingencies — Legal Proceedings, which discussion is incorporated by reference into this Item 3. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 53 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Not applicable.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................................................... 60 Business and Mission......................................................................................................................................................................................................................... 60 Executive Overview............................................................................................................................................................................................................................ 63 Results of Operations......................................................................................................................................................................................................................... 65 Liquidity and Capital Resources......................................................................................................................................................................................................... 70 Key Initiatives and Challenges........................................................................................................................................................................................................... 75 Critical Accounting Estimates.............................................................................................................................................................................................................. 83 New Accounting Standards and Interpretations................................................................................................................................................................................. 89 Legislative and Regulatory Matters.................................................................................................................................................................................................... 89 Environmental Matters....................................................................................................................................................................................................................... 89 Legal Proceedings.............................................................................................................................................................................................................................. 89 Risk Management Activities............................................................................................................................................................................................................... 89 ITEM 7A.
Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................................................... 54 Business and Mission......................................................................................................................................................................................................................... 54 Executive Overview............................................................................................................................................................................................................................ 56 Results of Operations......................................................................................................................................................................................................................... 57 Liquidity and Capital Resources......................................................................................................................................................................................................... 63 Key Initiatives and Challenges........................................................................................................................................................................................................... 67 Critical Accounting Estimates .............................................................................................................................................................................................................. 73 New Accounting Standards and Interpretations ................................................................................................................................................................................. 79 Legislative and Regulatory Matters .................................................................................................................................................................................................... 79 Environmental Matters....................................................................................................................................................................................................................... 79 Legal Proceedings.............................................................................................................................................................................................................................. 79 Risk Management Activities ............................................................................................................................................................................................................... 79 ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................................................................................................... 92 ITEM 8.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........................................................................................................................... 82 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................................................................................................................................................... 93 Consolidated Balance Sheets............................................................................................................................................................................................................ 94 Consolidated Statements of Operations............................................................................................................................................................................................. 93 Consolidated Statements of Comprehensive Income (Loss)............................................................................................................................................................. 96 Consolidated Statements of Cash Flows........................................................................................................................................................................................... 97 Consolidated Statements of Changes in Proprietary Capital............................................................................................................................................................. 98 Notes to Consolidated Financial Statements..................................................................................................................................................................................... 99 Report of Independent Registered Public Accounting Firm (PCAOB ID 42) ...................................................................................................................................... 160 2 Table of Contents
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .......................................................................................................................................................... 83 Consolidated Statements of Operations ............................................................................................................................................................................................. 83 Consolidated Balance Sheets............................................................................................................................................................................................................ 84 Consolidated Statements of Comprehensive Income (Loss)............................................................................................................................................................. 86 Consolidated Statements of Cash Flows........................................................................................................................................................................................... 87 Consolidated Statements of Changes in Proprietary Capital ............................................................................................................................................................. 88 Notes to Consolidated Financial Statements..................................................................................................................................................................................... 89 Report of Independent Registered Public Accounting Firm (PCAOB ID 42) ...................................................................................................................................... 150 2 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Part III, Item 11, Executive Compensation — Compensation Discussion and Analysis for information regarding how the 2024 measures are calculated. 62 Table of Contents 2024 Corporate Measure Weight Actual Threshold Target Stretch TVA total spending ($ millions) 40% $ 7,496 $ 8,049 $ 7,810 $ 7,570 Load not served (system minutes) 30% 2.3 4.5 4.1 3.2 Annualized nuclear online reliability loss factor (%) 15% 3.22 % 3.00 % 2.00 % 1.00 % Combined cycle equivalent forced outage rate (%) 10% 1.2 % 6.4 % 5.5 % 4.0 % Coal equivalent forced outage rate (%) 5% 4.8 % 18.2 % 15.2 % 8.6 % 2025 Corporate Measure Weight Threshold Target Stretch Strategic Business Unit ("SBU") Controllable / Operating and Maintenance ("O&M") and Base Capital Spend 40% $5,187 $5,061 $4,935 Transmission Performance Indicator 15% 50 100 200 Nuclear Performance Indicator 15% 2.77 2.00 1.23 Power Operations Performance Indicator 15% 50 100 200 Serious Injury Incident Rate 15% 0.04 0.02 0.00 Executive Overview TVA's operating revenues were $12.3 billion and $12.1 billion for the years ended September 30, 2024 and 2023, respectively.
Biggest changeSee Part III, Item 11, Executive Compensation — Compensation Discussion and Analysis for information regarding how the 2025 measures are calculated. 55 Table of Contents 2025 Corporate Measure Weight Actual Threshold Target Stretch Strategic Business Unit ("SBU") Controllable / Operating and Maintenance ("O&M") and Base Capital Spend ($ millions) (1) 40% $4,623 $5,187 $5,061 $4,935 Transmission Performance Indicator (2) 15% 94 50 100 200 Nuclear Performance Indicator (3) 15% 9.84% 2.77% 2.00% 1.23% Power Operations Performance Indicator (4) 15% 193 50 100 200 Serious Injury Incident Rate (5) 15% 0.01 0.04 0.02 0.00 Notes (1) Strategic Business Unit ("SBU") Controllable Operating & Maintenance ("O&M") and Base Capital Spend equals the total Non-Fuel O&M and Base Capital expenses for corporate and operational SBU organizations (excludes Board of Directors).
In 2017, the TVA Board authorized up to $300 million to be spent over the next 10 years, subject to annual budget availability and necessary environmental reviews, to build an enhanced fiber optic network that will better connect TVA's operational assets. Fiber is a vital part of TVA's modern communication infrastructure.
Fiber Optic Network In 2017, the TVA Board authorized up to $300 million to be spent over the next 10 years, subject to annual budget availability and necessary environmental reviews, to build an enhanced fiber optic network that will better connect TVA's operational assets. Fiber is a vital part of TVA's modern communication infrastructure.
Dry generation and dewatering projects . TVA has accomplished the conversion from wet to dry handling of CCR materials at all operating coal plants with the completion of dry generation and/or dewatering projects at Bull Run, Cumberland, Gallatin Fossil Plant ("Gallatin"), Kingston, and Shawnee Fossil Plant ("Shawnee"). Landfills .
TVA has accomplished the conversion from wet to dry handling of CCR materials at all operating coal plants with the completion of dry generation and/or dewatering projects at Bull Run, Cumberland, Gallatin Fossil Plant ("Gallatin"), Kingston, and Shawnee. Landfills .
As a result of the enactment of the final rule, during 2024, TVA recorded additional estimated AROs of $3.1 billion and recorded a corresponding regulatory asset of $3.1 billion due to these AROs being associated with closed sites and asset retirement costs having been fully depreciated.
As a result of the enactment of the final rule, during 2024, TVA recorded additional estimated AROs of $3.1 billion and recorded a corresponding regulatory asset of $3.1 billion due to these AROs being associated with closed sites and asset retirement costs having been fully depreciated.
Discount Rate – TVA uses its incremental borrowing rate over a period consistent with the remaining timeframe until the costs are expected to be incurred to calculate the present value of the weighted estimated cash flows required to satisfy TVA's decommissioning obligations.
Discount Rate – TVA uses its incremental borrowing rate over a period consistent with the remaining timeframe until the costs are expected to be incurred to calculate the present value of the weighted estimated cash flows required to satisfy TVA's decommissioning obligations.
TVA manages risk with commodity derivatives under the FHP by hedging exposure to the price of natural gas.
Commodity Derivatives under the FHP. TVA manages risk with commodity derivatives under the FHP by hedging exposure to the price of natural gas.
Construction of additional lined and dry permitted storage facilities may occur to support future business requirements . CCR facilities closures . TVA is working to close CCR facilities in accordance with federal and state requirements. Closure project schedules and costs are driven by the selected closure methodology (such as closure-in-place or closure-by-removal) and regulatory requirements.
Construction of additional lined and dry permitted storage facilities may occur to support future business requirements . CCR facilities closures . TVA is working to close CCR facilities in accordance with federal and state requirements. Closure project schedules and costs are driven by the selected closure methodology (such as closure-in-place or closure-by-removal) and associated regulatory requirements.
The MD&A includes the following sections: • 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 2024; • Results of Operations — an analysis of TVA's consolidated results of operations for 2023 and 2024; • 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 Estimates — a summary of significant estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes; • 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.
The MD&A includes the following sections: • 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 2025; • Results of Operations — an analysis of TVA's consolidated results of operations for 2024 and 2025; • 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 Estimates — a summary of significant estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes; • 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.
In addition to affecting the amount of interest that TVA receives from its short-term investments, changes in interest rates could affect the value of the investments in its NDT, ART, pension plan, SERP, DCP, and RP. See Risk Management Activities — Investment Price Risk above. Short-Term Debt .
In addition to affecting the amount of interest that TVA receives from its short-term investments, changes in interest rates could affect the value of the investments in its NDT, ART, pension plan assets, SERP, DCP, and RP. See Risk Management Activities — Investment Price Risk above. Short-Term Debt .
Estimates for these amounts and costs after 2029 may change depending on the final closure method selected for each facility. While the conversion portion of the CCR Program is completed, TVA will continue to undertake CCR closure and storage projects, including building new landfill cells under existing permits and closing existing cells once they reach capacity.
Estimates for these amounts and costs after 2030 may change depending on the final closure method selected for each facility. While the conversion portion of the CCR Program is completed, TVA will continue to undertake CCR closure and storage projects, including building new landfill cells under existing permits and closing existing cells once they reach capacity.
TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively. Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues during both the years ended September 30, 2024 and 2023.
TVA's two largest LPCs — Memphis Light, Gas and Water Division ("MLGW") and Nashville Electric Service ("NES") — have contracts with a five-year and a 20-year termination notice period, respectively. Sales to MLGW and NES accounted for nine percent and eight percent, respectively, of TVA's total operating revenues during both the years ended September 30, 2025 and 2024.
However, this equipment could be used at other TVA sites if the final project is not approved. TVA could spend up to an additional $1.4 billion on this potential project. To operate the Cumberland Combined Cycle Plant, TVA has contracted for the transportation of gas from a gas pipeline that will need to be constructed.
However, this equipment could be used at other TVA sites if the final project is not approved. TVA could spend up to an additional $1.2 billion on this potential project. To operate the Cumberland Combined Cycle Plant, TVA has contracted for the transportation of gas from a gas pipeline that will need to be constructed.
Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. As of September 30, 2024, 148 LPCs had signed the 20-year Partnership Agreement with TVA.
Participating LPCs receive benefits including a 3.1 percent wholesale bill credit in exchange for their long-term commitment, which enables TVA to recover its long-term financial commitments over a commensurate period. As of September 30, 2025, 148 LPCs had signed the 20-year Partnership Agreement with TVA.
TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2023) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. All derivative instruments are analyzed individually and are subject to unique risk exposures.
TVA discounts each financial instrument using the historical default rate (as reported by Moody's for CY 1983 to CY 2024) for companies with a similar credit rating over a time period consistent with the remaining term of the contract. All derivative instruments are analyzed individually and are subject to unique risk exposures.
At September 30, 2024 and 2023, the interest rates on all of TVA's outstanding long-term debt were fixed (or subject only to downward adjustment under certain conditions). Accordingly, an immediate one percentage point increase in interest rates would not have affected TVA's interest expense associated with its long-term debt.
Long-Term Debt. At September 30, 2025 and 2024, the interest rates on all of TVA's outstanding long-term debt were fixed (or subject only to downward adjustment under certain conditions). Accordingly, an immediate one percentage point increase in interest rates would not have affected TVA's interest expense associated with its long-term debt.
(4) The numbers above include the change in construction in progress and nuclear fuel expenditures included in Accounts payable and accrued liabilities of $348 million. TVA continually reviews its capital expenditures and financing programs. The amounts shown in the table above are forward-looking amounts based on a number of assumptions and are subject to various uncertainties.
(4) The numbers above include the change in construction in progress and nuclear fuel expenditures included in Accounts payable and accrued liabilities of $283 million. TVA continually reviews its capital expenditures and financing programs. The amounts shown in the table above are forward-looking amounts based on a number of assumptions and are subject to various uncertainties.
The MD&A is provided as a supplement to, and should be read in conjunction with, TVA's consolidated financial statements and the accompanying notes thereto contained in Item 8, Financial Statements and Supplementary Data of this Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (the "Annual Report").
The MD&A is provided as a supplement to, and should be read in conjunction with, TVA's consolidated financial statements and the accompanying notes thereto contained in Item 8, Financial Statements and Supplementary Data of this Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the "Annual Report").
(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the year ended September 30, 2024, and the year ended September 30, 2023. See Part I, Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage for a discussion of Raccoon Mountain Pumped-Storage Plant.
(3) Raccoon Mountain Pumped-Storage Plant net generation is allocated against each TVA-operated generation facility and purchased power type for both the year ended September 30, 2025, and the year ended September 30, 2024. See Part I, Item 1, Business — Power Supply and Load Management Resources — Hydroelectric Pumped-Storage for a discussion of Raccoon Mountain Pumped-Storage Plant.
Additional ad-hoc experience studies are performed as needed to review recent experience and validate recommended changes to the actuarial assumptions used based upon TVA's last experience study in 2023. See Note 20 — Benefit Plans for explanations of changes in assumptions and estimates. Expected Return on Plan Assets .
Additional ad-hoc experience studies are performed as needed to review recent experience and validate recommended changes to the actuarial assumptions used based upon TVA's last experience study in 2023. See Note 21 — Benefit Plans for explanations of changes in assumptions and estimates. Expected Return on Plan Assets .
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. 60 Table of Contents • TVA is not authorized to raise capital by issuing equity securities.
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. 54 Table of Contents • TVA is not authorized to raise capital by issuing equity securities.
For a discussion of certain current material Legal Proceedings, see Note 22 — Commitments and Contingencies — Legal Proceedings , which discussions are incorporated into this Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations . Risk Management Activities TVA is exposed to various market risks.
For a discussion of certain current material Legal Proceedings, see Note 23 — Commitments and Contingencies — Legal Proceedings , which discussions are incorporated into this Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations . Risk Management Activities TVA is exposed to various market risks.
TVA has a designated Enterprise Risk Management ("ERM") organization within its Financial Services organization responsible for (1) establishing enterprise risk management policies and guidelines, (2) developing an enterprise risk profile aligned with TVA's strategic objectives, (3) performing annual risk assessments across all TVA business units, (4) monitoring and reporting on identified enterprise risks and emerging risks, (5) facilitating enterprise risk discussions with the risk subject matter experts across the organization and at the ERC and TVA Board levels, and (6) developing and improving TVA's risk awareness culture.
TVA has a designated Enterprise Risk Management ("ERM") organization within its Finance organization responsible for (1) establishing enterprise risk management policies and guidelines, (2) developing an enterprise risk profile aligned with TVA's strategic objectives, (3) performing annual risk assessments across all TVA business units, (4) monitoring and reporting on identified enterprise risks and emerging risks, (5) facilitating enterprise risk discussions with the risk subject matter experts across the organization and at the ERC and TVA Board levels, and (6) developing and improving TVA's risk awareness culture.
The measures are designed to promote teamwork, encourage high performance behaviors, and motivate TVA employees to achieve goals aligned with TVA's mission and values. The 2024 corporate results compared with targets for these key measures are reflected in the chart below, and the subsequent chart reflects the 2025 approved corporate measures.
The measures are designed to promote teamwork, encourage high performance behaviors, and motivate TVA employees to achieve goals aligned with TVA's mission and values. The 2025 corporate results compared with targets for these key measures are reflected in the chart below, and the subsequent chart reflects the 2026 approved corporate measures.
Department of Homeland Security's Cybersecurity and Infrastructure Security Agency ("CISA"). CISA serves as the agency assisting other federal entities in defending against threats and securing critical infrastructure. The U.S. Computer Emergency Readiness Team functions as a liaison between the U.S. Department of Homeland Security and the public and private sectors to coordinate responses to security threats.
CISA serves as the agency assisting other federal entities in defending against threats and securing critical infrastructure. The U.S. Computer Emergency Readiness Team functions as a liaison between the U.S. Department of Homeland Security and the public and private sectors to coordinate responses to security threats.
The currency and interest rate swaps are classified as Level 2 valuations as the rate curves and interest rates affecting the fair value of the contracts are based on observable data. Commodity Derivatives . TVA enters into commodity contracts for natural gas that require physical delivery of the contracted quantity of the commodity.
The currency and interest rate swaps are classified as Level 2 valuations as the rate curves and interest rates affecting the fair value of the contracts are based on observable data. Commodity Contract Derivatives . TVA enters into certain commodity contract derivatives for natural gas that require physical delivery of the contracted quantity.
TVA's mortality assumptions are based upon actuarial projections in combination with actuarial studies of the actual mortality experience of TVARS's pension and post-retirement benefit plan participants taking into consideration the Society of Actuaries ("SOA") mortality table and projection scales as of September 30, 2024.
TVA's mortality assumptions are based upon actuarial projections in combination with actuarial studies of the actual mortality experience of TVARS's pension and post-retirement benefit plan participants taking into consideration the Society of Actuaries ("SOA") mortality table and projection scales as of September 30, 2025.
TVA uses proceeds from the issuance of discount notes, in addition to other sources of liquidity, to fund short-term cash needs and scheduled maturities of long-term debt. 71 Table of Contents The following table provides additional information regarding TVA's short-term borrowings.
TVA uses proceeds from the issuance of discount notes, in addition to other sources of liquidity, to fund short-term cash needs and scheduled maturities of long-term debt. The following table provides additional information regarding TVA's short-term borrowings.
See Part I, Item 1, Business — Environmental Matters — Cleanup of Solid and Hazardous Wastes — Coal Combustion Residuals, Part I, Item 1A , Risk Factors — Regulatory, Legislative, and Legal Risks , and Note 13 — Asset Retirement Obligations. Allen Groundwater Investigation .
See Part I, Item 1, Business — Environmental Matters — Cleanup of Solid and Hazardous Wastes — Coal Combustion Residuals, Part I, Item 1A , Risk Factors — Regulatory, Legislative, and Legal Risks , and Note 14 — Asset Retirement Obligations. Allen Groundwater Investigation .
A higher COLA increases the pension benefit obligation whereas a lower COLA assumption decreases the obligation. The actual calendar year COLA and the long-term COLA assumption are used to determine the benefit obligation at September 30 and the net periodic benefit costs for the following fiscal year. Mortality .
A higher COLA increases the pension benefit obligation whereas a lower COLA assumption decreases the obligation. The actual CY COLA and the long-term COLA assumption are used to determine the benefit obligation at September 30 and the net periodic benefit costs for the following fiscal year. Mortality .
Other than certain derivative instruments in its trust investment funds, it is TVA's policy to enter into these derivative transactions solely for hedging purposes and not for speculative purposes. See Note 15 — Risk Management Activities and Derivative Transactions .
Other than certain derivative instruments in its trust investment funds, it is TVA's policy to enter into these derivative transactions solely for hedging purposes and not for speculative purposes. See Note 16 — Risk Management Activities and Derivative Transactions .
The natural gas derivative contracts are classified as Level 2 valuations based on market approaches which utilize short-term and mid-term market-quoted prices from an external industry brokerage firm. TVA maintains policies and procedures to value commodity contracts using what is believed to be the best and most relevant data available.
The natural gas commodity contract derivatives are classified as Level 2 valuations based on market approaches which utilize short-term and mid-term market-quoted prices from an external industry brokerage firm. TVA maintains policies and procedures to value commodity contracts using what is believed to be the best and most relevant data available.
TVA has cataloged major short-term and long-term enterprise level risks across the organization. A discussion of significant risks is presented in Part I, Item 1A, Risk Factors. Commodity Price Risk TVA is exposed to effects of market fluctuations in the price of commodities that are critical to its operations, including 89 Table of Contents electricity, coal, and natural gas.
TVA has cataloged major short-term and long-term enterprise level risks across the organization. A discussion of significant risks is presented in Part I, Item 1A, Risk Factors. Commodity Price Risk TVA is exposed to effects of market fluctuations in the price of commodities that are critical to its operations, including electricity, coal, and natural gas.
For these contracts, the lease component is included in lease obligations (see Note 8 — Leases ) and the non-lease component is included in power purchase obligations in the table above. For PPA contracts containing a lease component that have not commenced, the entire commitment amount is included in the table above.
For these contracts, the lease component is included in lease obligations (see Note 9 — Leases ) and the non-lease component is included in power purchase obligations in the table above. For PPA contracts containing a lease component that have not commenced, the entire commitment amount is included in the table above.
Net power proceeds are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalents, but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein.
Net power proceeds are defined as the remainder of TVA's gross power revenues after deducting the costs of operating, maintaining, and administering its power properties and tax equivalents, but before deducting depreciation accruals or other charges representing the amortization of 63 Table of Contents capital expenditures, plus the net proceeds from the sale or other disposition of any power facility or interest therein.
The bondholder protection test for the five-year period ended September 30, 2020, was calculated after the end of 2020, and TVA met the test's requirements. TVA must next meet the bondholder protection test for the five-year period ending September 30, 2025, and expects to meet the test.
The bondholder protection test for the five-year period ended September 30, 2025, was calculated after the end of 2025, and TVA met the test's requirements. TVA must next meet the bondholder protection test for the five-year period ending September 30, 2030, and expects to meet the test.
The GAC also reduces the impact of weather variability to the overall rate structure. 66 Table of Contents TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts automatically renew each year and have a 20-year termination notice.
The GAC also reduces the impact of weather variability to the overall rate structure. TVA has a Partnership Agreement option that better aligns the length of LPC power contracts with TVA's long-term commitments. Under the partnership arrangement, the LPC power contracts automatically renew each year and have a 20-year termination notice.
(3) Includes commitments to purchase nuclear fuel, coal, and natural gas, as well as related transportation and storage services. 74 Table of Contents (4) Primarily includes long-term service contracts, contracts that contain minimum purchase levels for the purchase of limestone along with related storage and transportation, and contractual obligations related to TVA's load control program. EnergyRight ® Program.
(3) Includes commitments to purchase nuclear fuel, coal, and natural gas, as well as related transportation and storage services. (4) Primarily includes long-term service contracts, contracts that contain minimum purchase levels for the purchase of limestone along with related storage and transportation, and contractual obligations related to TVA's load control program. EnergyRight ® Program.
See Note 20 — Benefit Plans — Fair Value Measurements for disclosure of fair value measurements for investments held by the TVA Retirement System ("TVARS") that support TVA's qualified defined benefit pension plan. Pricing .
See Note 21 — Benefit Plans — Fair Value Measurements for disclosure of fair value measurements for investments held by the TVA Retirement System ("TVARS") that support TVA's qualified defined benefit pension plan. Pricing .
These market risks include risks related to commodity prices, investment prices, interest rates, currency exchange rates, inflation, and counterparty credit and performance risk. To help manage certain of these risks, TVA has entered into various derivative transactions, including commodity option contracts, forward contracts, swaps, swaptions, futures, and options on futures.
These market risks include risks related to commodity prices, investment prices, interest rates, currency exchange rates, inflation, and counterparty credit and performance risk. To help manage certain of these risks, TVA has entered into various derivative transactions, including commodity option contracts, forward contracts, 79 Table of Contents swaps, swaptions, futures, and options on futures.
At September 30, 2024 and 2023, an immediate 10 percent decrease in the value of the RP accounts would have reduced the value of the accounts by less than $1 million. Interest Rate Risk TVA's interest rate risk is related primarily to its short-term investments, short-term debt, long-term debt, and interest rate derivatives. Investments.
At both September 30, 2025 and 2024, an immediate 10 percent decrease in the value of the RP accounts would have reduced the value of the accounts by less than $1 million. Interest Rate Risk TVA's interest rate risk is related primarily to its short-term investments, short-term debt, long-term debt, and interest rate derivatives. Investments.
Based on the results of the ACM, TVA is required to select a remedy as soon as feasible. TVA has selected remedies for two of its plants: a groundwater pump and treat system at the Allen East Ash Disposal Area and monitored natural attenuation at Shawnee.
Based on the results of the ACM, TVA is required to 71 Table of Contents select a remedy as soon as feasible. TVA has selected remedies for two of its plants: a groundwater pump and treat system at the Allen East Ash Disposal Area and monitored natural attenuation at Shawnee.
In determining the fair value of its financial instruments, TVA considers the source of observable market data inputs, liquidity of the instrument, credit risk, and risk of nonperformance of itself or the counterparty to the contract. The conditions and criteria used to assess these factors are described below. Sources of Market Assumptions.
In determining the fair value of its financial instruments, TVA considers the source of observable market data inputs, liquidity of the instrument, credit risk, and risk of nonperformance of itself or the counterparty to the contract. The conditions and criteria used to assess these factors are described below. 76 Table of Contents Sources of Market Assumptions.
Other factors TVA considers when determining whether a market is active or inactive include the presence of government or regulatory control over pricing that could make it difficult to establish a market-based price upon entering into a transaction. 86 Table of Contents Nonperformance Risk .
Other factors TVA considers when determining whether a market is active or inactive include the presence of government or regulatory control over pricing that could make it difficult to establish a market-based price upon entering into a transaction. Nonperformance Risk .
Risk Governance The Enterprise Risk Council ("ERC") is responsible for the highest level of risk oversight at TVA and is also responsible for communicating enterprise-wide risks with policy implications to the TVA Board or a designated TVA Board committee. The ERC is comprised of the Senior Management Council and the Chief Risk Officer ("CRO") who acts as Chair.
Risk Governance The Enterprise Risk Council ("ERC") is responsible for the highest level of risk oversight at TVA and is also responsible for communicating enterprise-wide risks with policy implications to the TVA Board or a designated TVA Board committee. The ERC is comprised of the Executive Council and the Chief Risk Officer ("CRO"), who acts as Chair.
TVA's critical accounting policies are discussed in Note 1 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. TVA believes that its most critical accounting estimates relate to AROs, fair value measurements, and pension and other post-retirement benefits.
TVA's critical accounting policies are discussed in Note 1 — Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. 73 Table of Contents TVA believes that its most critical accounting estimates relate to AROs, fair value measurements, and pension and other post-retirement benefits.
Additionally, TVA's two issues of Bonds denominated in British pounds sterling are hedged by currency swap agreements. If not effectively managed, foreign currency exposure could negatively impact TVA's counterparty risk, cash flows, results of operations, and financial condition. 91 Table of Contents
Additionally, TVA's two issues of Bonds denominated in British pounds sterling are hedged by currency swap agreements. If not effectively managed, foreign currency exposure could negatively impact TVA's counterparty risk, cash flows, results of operations, and financial condition.
The assets in the NDT, ART, SERP, DCP, and RP are generally measured at fair value based on quoted market prices or other observable market data such as interest rate indices. These investments are primarily U.S. and international equities, real estate investment trusts, fixed income investments, high-yield fixed income investments, U.S.
The assets in the NDT, ART, SERP, DCP, and RP are generally measured at fair value based on 75 Table of Contents quoted market prices or other observable market data such as interest rate indices. These investments are primarily U.S. and international equities, real estate investment trusts, fixed income investments, high-yield fixed income investments, U.S.
Investment Price Risk TVA's investment price risk relates primarily to investments in TVA's NDT, ART, pension fund, SERP, DCP, and RP. Nuclear Decommissioning Trust. The NDT is generally designed to achieve a return in line with overall equity and debt market performance.
Investment Price Risk TVA's investment price risk relates primarily to investments in TVA's NDT, ART, pension plan assets, SERP, DCP, and RP. Nuclear Decommissioning Trust. The NDT is generally designed to achieve a return in line with overall equity and debt market performance.
The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loan receivable that has been in default for 180 days or more or that TVA has determined is uncollectible. At September 30, 2024, the total carrying amount of the loans receivable, net of discount, was $56 million.
The loans receivable are then transferred to a third-party bank with which TVA has agreed to repay in full any loan receivable that has been in default for 180 days or more or that TVA has determined is uncollectible. At September 30, 2025, the total carrying amount of the loans receivable, net of discount, was $57 million.
The timing and level of cash flows from operations can be affected by the weather, changes in working capital, commodity price fluctuations, outages, and other project expenses. Net cash flows provided by operating activities increased $131 million for the year ended September 30, 2024, as compared to the same period of the prior year.
The timing and level of cash flows from operations can be affected by the weather, changes in working capital, commodity price fluctuations, outages, and other project expenses. Net cash flows provided by operating activities increased $321 million for the year ended September 30, 2025, as compared to the same period of the prior year.
At September 30, 2024 and 2023, an immediate 10 percent decrease in the price of the investments in the trust would have reduced the value of the trust by $333 million and $279 million, respectively. Asset Retirement Trust. The ART is presently invested to achieve a return in line with overall equity and debt market performance.
At September 30, 2025 and 2024, an immediate 10 percent decrease in the price of the investments in the trust would have reduced the value of the trust by $371 million and $333 million, respectively. Asset Retirement Trust. The ART is presently invested to achieve a return in line with overall equity and debt market performance.
See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in TVA's Annual Report on Form 10-K for the year ended September 30, 2023, filed with the Securities and Exchange Commission ("SEC") on November 14, 2023, for a discussion of variance drivers for the year ended September 30, 2023, as compared to the year ended September 30, 2022.
See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in TVA's Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission ("SEC") on November 13, 2024, for a discussion of variance drivers for the year ended September 30, 2024, as compared to the year ended September 30, 2023.
A 10 percent change in TVA's forecasted costs for non-nuclear decommissioning activities at September 30, 2024, would have affected the liability by approximately $699 million. Fair Value Measurements Investments. Investment funds are comprised of equity securities and debt securities and are classified as trading.
A 10 percent change in TVA's forecasted costs for non-nuclear decommissioning activities at September 30, 2025, would have affected the liability by approximately $644 million. Fair Value Measurements Investments. Investment funds are comprised of equity securities and debt securities and are classified as trading.
Business and Mission Business TVA operates the nation's largest public power system. At September 30, 2024, TVA had 61 directly served customers, which include seven federal agency customers, and 153 local power company customers ("LPCs") that serve approximately 10 million people in parts of seven southeastern states.
Business and Mission Business TVA operates the nation's largest public power system. At September 30, 2025, TVA had 62 directly served customers, which include seven federal agency customers, and 153 local power company customers ("LPCs") that serve approximately 10 million people in parts of seven southeastern states.
See Note 15 — Risk Management Activities and Derivative Transactions — Other Derivative Instruments — Collateral for a discussion of collateral related to TVA's derivative liabilities.
See Note 16 — Risk Management Activities and Derivative Transactions — Other Derivative Instruments — Collateral for a discussion of collateral related to TVA's derivative liabilities.
The model matches the present value of the projected benefit payments to the market value of the theoretical settlement bond portfolio with any resulting excess funds 87 Table of Contents presumed to be reinvested and used to meet successive year benefit payments.
The model matches the present value of the projected benefit payments to the market value of the theoretical settlement bond portfolio with any resulting excess funds presumed to be reinvested and used to meet successive year benefit payments.
Legal Proceedings From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. As of September 30, 2024, TVA had accrued approximately $10 million with respect to Legal Proceedings.
Legal Proceedings From time to time, TVA is party to or otherwise involved in lawsuits, claims, proceedings, investigations, and other legal matters ("Legal Proceedings") that have arisen in the ordinary course of conducting its activities. As of September 30, 2025, TVA had accrued approximately $11 million with respect to Legal Proceedings.
The new fiber optic lines will improve the reliability and resiliency of the generation and transmission system while enabling the system to better accommodate distributed energy resources ("DER") as they enter the market.
The new fiber optic lines will improve the 70 Table of Contents reliability and resiliency of the generation and transmission system while enabling the system to better accommodate distributed energy resources ("DER") as they enter the market.
These costs are predominantly CCR closure, CCR post-closure care and 84 Table of Contents monitoring, and plant powerhouse asbestos removal. CCR closure estimates are primarily closure-in-place except for specific ponds located at Allen and Gallatin, which are closure-by-removal. CCR post-closure care and monitoring primarily includes costs for grounds maintenance, cover system and mechanical maintenance, inspections, and groundwater monitoring costs.
These costs are predominantly CCR closure, CCR post-closure care and monitoring, and plant powerhouse asbestos removal. CCR closure estimates are primarily closure-in-place except for specific ponds located at Allen and Gallatin, which are closure-by-removal. CCR post-closure care and monitoring primarily includes costs for grounds maintenance, cover system and mechanical maintenance, inspections, and groundwater monitoring costs.
TVA's mission focuses on three key areas: ENERGY ENVIRONMENT ECONOMIC DEVELOPMENT • Energy — Delivering reliable, low cost, clean energy; • Environment — Caring for the region's natural resources; and • Economic Development — Creating sustainable economic growth. 61 Table of Contents While TVA's mission has not changed since it was established in 1933, the climate in which TVA operates continues to evolve.
TVA's mission focuses on three key areas: ENERGY ENVIRONMENT ECONOMIC DEVELOPMENT • Energy — Delivering reliable and low cost energy; • Environment — Caring for the region's natural resources; and • Economic Development — Creating sustainable economic growth. While TVA's mission has not changed since it was established in 1933, the climate in which TVA operates continues to evolve.
An immediate 10 percent decline in the market price of natural gas on September 30, 2024 and 2023, would have resulted in a decrease of approximately $72 million and $127 million, respectively, in the fair value of TVA's natural gas derivative instruments under the FHP.
An immediate 10 percent decline in the market price of natural gas on September 30, 2025 and 2024, would have resulted in a decrease of approximately $106 million and $72 million, respectively, in the fair value of TVA's natural gas derivative instruments under the FHP.
Executives may alternatively choose to have their balances adjusted based on the return of certain mutual funds. At both September 30, 2024 and 2023, an immediate 10 percent decrease in the value of the deferred compensation accounts would have reduced the value of the accounts by $2 million. 90 Table of Contents Restoration Plan .
Executives may alternatively choose to have their balances adjusted based on the return of certain mutual funds. At both September 30, 2025 and 2024, an immediate 10 percent decrease in the value of the deferred compensation accounts would have reduced the value of the accounts by $2 million. Restoration Plan .
The new digital system will have higher capacity and speed for communications with the TVA grid and for inputs from monitoring equipment, will network the new control center with existing locations, and will enable better remote visibility and control to help mitigate reliability implications of climate change. The system is expected to be complete in CY 2027.
The new digital system will have higher capacity and speed for communications with the TVA grid and for inputs from monitoring equipment, will network the new control center with existing locations, and will enable better remote visibility and control to help mitigate reliability challenges. The system is expected to be complete in CY 2027.
(2) Includes average balances of long-term power bonds, debt of VIEs, and discount notes. (3) Includes interest on long-term power bonds, debt of VIEs, and discount notes. Total interest expense increased $10 million for the year ended September 30, 2024, as compared to the prior year.
(2) Includes average balances of long-term power bonds, debt of VIEs, and discount notes. (3) Includes interest on long-term power bonds, debt of VIEs, and discount notes. Total interest expense increased $130 million for the year ended September 30, 2025, as compared to the prior year.
(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia CC, which is currently a leased facility operated by TVA. Generation from Caledonia Combined Cycle Plant (" Caledonia CC") was 4,798 million kWh and 4,030 million kWh for the years ended September 30, 2024 and 2023, respectively.
(4) Purchased power (natural gas and/or oil-fired) includes generation from Caledonia CC, which is currently a leased facility operated by TVA. Generation from Caledonia Combined Cycle Plant ("Caledonia CC") was 5,464 million kWh and 4,798 million kWh for the years ended September 30, 2025 and 2024, respectively.
TVA plans to retire the nine coal-fired units at Kingston by the end of CY 2027 and replace the retired generation with an energy complex that includes 1,500 MW of natural gas, 100 MW of battery storage, and 3-4 MW of solar. See Natural Gas-Fired Units below.
TVA plans to retire the nine coal-fired units at Kingston by the end of CY 2027 and replace the retired generation with an energy complex that includes at least 1,500 MW of natural gas, 100 MW of battery storage, and 3-4 MW of solar. See Natural Gas-Fired Units above. Hydroelectric Pumped-Storage.
TVA's Putable Automatic Rate Reset Securities ("PARRS") are traded on the NYSE under the exchange symbols "TVC" and "TVE." Other bonds listed on the NYSE are assigned various symbols by the exchange, which may be noted on the NYSE's website.
TVA's Putable Automatic Rate Reset Securities ("PARRS") are traded on the NYSE under the exchange symbols "TVC" and "TVE." Other bonds listed on the NYSE are assigned various 64 Table of Contents symbols by the exchange, which may be noted on the NYSE's website.
The generation for 2024 includes 137 million kWh of pre-commercial generation at Paradise CTs 5-7. (2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table above.
The generation for 2024 includes 137 thousand kWh of pre-commercial generation at Paradise CT Units 5-7. (2) Generation from TVA-owned renewable resources (non-hydroelectric) is less than one percent for all periods shown and therefore is not represented in the table above.
At September 30, 2024 and 2023, an immediate 10 percent decrease in the value of the net assets of the fund would have reduced the value of the fund by approximately $867 million and $813 million, respectively. Supplemental Executive Retirement Plan .
At September 30, 2025 and 2024, an immediate 10 percent decrease in the value of the net assets of the fund would have reduced the value of the fund by approximately $859 million and $867 million, respectively. Supplemental Executive Retirement Plan .
For additional information about TVA debt issuance activity and debt instruments issued and outstanding at September 30, 2024 and 2023, including rates, maturities, outstanding principal amounts, and redemption features, see Note 14 — Debt and Other Obligations — Debt Securities Activity and Debt Outstanding .
For additional information about TVA debt issuance activity and debt instruments issued and outstanding at September 30, 2025 and 2024, including rates, maturities, outstanding principal amounts, and redemption features, see Note 15 — Debt and Other Obligations — Debt Securities Activity and Debt Outstanding .
There are no readily available quoted exchange prices for these investments. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. See Note 16 — Fair Value Measurements — Valuation Techniques for a discussion of valuation levels of the investments. 85 Table of Contents Plan Investments .
There are no readily available quoted exchange prices for these investments. The fair value of these investments is based on information provided by the investment managers. These investments are valued on a quarterly basis. See Note 17 — Fair Value Measurements — Valuation Techniques for a discussion of valuation levels of the investments. Plan Investments .
The application of CVAs resulted in a less than $1 million decrease in the fair value of assets and a $1 million decrease in the fair value of liabilities at September 30, 2024. Collateral.
The application of CVAs resulted in a less than $1 million decrease in the fair value of assets and a $3 million decrease in the fair value of liabilities at September 30, 2025. Collateral.
At September 30, 2024 and 2023, an immediate 10 percent decrease in the value of the SERP investments would have reduced the value of the investments by $10 million and $8 million, respectively. Deferred Compensation Plan. The DCP is designed to provide participants with the ability to defer compensation to future periods.
At both September 30, 2025 and 2024, an immediate 10 percent decrease in the value of the SERP investments would have reduced the value of the investments by $10 million. Deferred Compensation Plan. The DCP is designed to provide participants with the ability to defer compensation to future periods.
TVA may also utilize available funding through the Inflation Reduction Act and the BIL, other federal funding opportunities, or other third-party financing arrangements. Estimated capital expenditures only include expenditures that are currently planned.
TVA may also utilize available funding through the IRA and the BIL, other federal funding opportunities, or other third-party financing arrangements. Estimated capital expenditures only include expenditures that are currently planned.
See Note 10 — Regulatory Assets and Liabilities and Note 15 — Risk Management Activities and Derivative Transactions for explanations of changes in estimates. Currency and Interest Rate Derivatives . TVA has two currency swaps and two "fixed for floating" interest rate swaps.
See Note 11 — Regulatory Assets and Liabilities and Note 16 — Risk Management Activities and Derivative Transactions for explanations of changes in estimates. Currency and Interest Rate Derivatives . TVA has two currency swaps and two "fixed for floating" interest rate swaps.
Cash, cash equivalents, and restricted cash totaled $523 million and $521 million at September 30, 2024 and 2023, respectively. A summary of cash flow components for the years ended September 30 follows: Cash provided by (used in): Operating Activities . TVA's cash flows from operations are primarily driven by sales of electricity, fuel expense, and operating and maintenance expense.
Cash, cash equivalents, and restricted cash totaled $1.6 billion and $523 million at September 30, 2025 and 2024, respectively. A summary of cash flow components for the years ended September 30 follows: Cash provided by (used in): Operating Activities . TVA's cash flows from operations are primarily driven by sales of electricity, fuel expense, and operating and maintenance expense.
This risk is somewhat mitigated by the fact that TVA's debt portfolio is diversified in terms of maturities and has a long average life. At September 30, 2024 and 2023, the average life of TVA's debt portfolio was 13.96 years and 14.43 years, respectively.
This risk is somewhat mitigated by the fact that TVA's debt portfolio is diversified in terms of maturities and has a long average life. At September 30, 2025 and 2024, the average life of TVA's debt portfolio was 13.82 years and 13.96 years, respectively.
At September 30, 2024, the average maturity of long-term power bonds was 13.96 years, and the weighted average interest rate was 4.69 percent. Discount notes have maturities of less than one year. Power bonds and discount notes have a first priority and equal claim of payment out of net power proceeds.
At September 30, 2025, the average maturity of long-term power bonds was 13.82 years, and the weighted average interest rate was 4.87 percent. Discount notes have maturities of less than one year. Power bonds and discount notes have a first priority and equal claim of payment out of net power proceeds.
See Note 23 — Related Parties . The rate test for the one-year period ended September 30, 2024, was calculated after the end of 2024, and TVA met the test's requirements.
See Note 24 — Related Parties . The rate test for the one-year period ended September 30, 2025, was calculated after the end of 2025, and TVA met the test's requirements.
In addition to power bonds and discount notes, TVA had long-term debt associated with certain VIEs outstanding at September 30, 2024. See Lease Financing below, Note 11 — Variable Interest Entities , and Note 14 — Debt and Other Obligations for additional information.
In addition to power bonds and discount notes, TVA had long-term debt associated with certain VIEs outstanding at September 30, 2025. See Lease Financing below, Note 12 — Variable Interest Entities , and Note 15 — Debt and Other Obligations for additional information.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative disclosures about market risk are reported in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Activities , which discussion is incorporated by reference into this Item 7A, Quantitative and Qualitative Disclosures About Market Risk. 92 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and qualitative disclosures about market risk are reported in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management Activities , which discussion is incorporated by reference into this Item 7A, Quantitative and Qualitative Disclosures About Market Risk. 82 Table of Contents

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