KNOXVILLE, Tenn. — Extreme summer and winter temperatures and a slowly improving economy increased demand for electricity from the Tennessee Valley Authority by about 6 percent in fiscal 2010, compared with the previous year, the utility reported Friday in its annual Form 10-K, filed with the Securities and Exchange Commission. TVA also maintained 99.999 percent service reliability for the 11th straight year and reduced its electricity prices by more than 9 percent from 2009 levels.
TVA’s revenues decreased 3.4 percent during the fiscal year, which ended Sept. 30, to $10.9 billion, from the previous year. The $381 million drop resulted mainly from lower prices. TVA also collected less money through the fuel cost adjustment portion of power bills, which changes monthly to reflect the costs of coal, natural gas and other purchases TVA must make to produce electricity for the 9 million people in its seven-state service territory.
“Not many utilities would say they had a good year when revenues were down,” President and CEO Tom Kilgore said. “But TVA did have a good year when we produced more electricity than the year before with lower revenues. Because TVA doesn’t make a profit, one way we measure success is keeping prices low for our customers.”
The average monthly wholesale rate for electricity from TVA during fiscal 2010 was 6.17 cents per kilowatt-hour, compared with 6.8 cents for 2009 — a reduction of 9.3 percent. Local power distributors buy electricity at wholesale rates and then sell it to homes and businesses at retail prices that are consistently below the national average.
“Our fuel costs were less than forecast for part of the fiscal year, which was reflected in lower prices for our customers,” Chief Financial Officer John Thomas said.
TVA is a federal power producer that serves customers in northeast Mississippi as well as six other states.