Spill clean-up hurts TVA’s numbers
NORTH MISSISSIPPI — The Tennessee Valley Authority (TVA) incurred a net loss of $167 million for the quarter that ended June 30, 2009, compared to a net income of $100 million for the same period in 2008.
The loss was due primarily to expenses related to the Kingston ash spill and a significant decline in sales, according to TVA’s quarterly financial report filed with the Securities and Exchange Commission.
For the first nine months of the 2009 fiscal year, TVA reported a net loss of $339 million, compared to a net income of $243 million for the same period in 2008, also primarily because of Kingston recovery expenses and lower power sales.
Power sales during the three months were down 8.4 percent, compared to the same three-month period in 2008, as power demand, particularly from commercial and industrial customers, continued to decline as a result of the economic downturn.
Total power sales during the nine months decreased by about 7 percent, compared to the same period in 2008.
Operating expenses during the third quarter were $2.4 billion, compared to $2.1 billion in the third quarter of FY 2008. For the first nine months of FY 2009, operating expenses totaled almost $8 billion, an increase of 29 percent over expenses during the first nine months of 2008, primarily because of increased fuel and purchased power expenses and costs associated with the Kingston recovery.
Operating revenues for the third quarter were $2.6 billion, almost the same as the corresponding period last year. Operating revenues for the nine months were approximately $8.6 billion, compared to $7.4 billion for the corresponding period a year ago.
TVA recognized expenses of $933 million related to the Kingston ash spill for the nine months, which included an additional charge of $258 million during the three months. The estimate was revised as work progressed on the recovery and more information became available. The estimate does not include costs that may come from regulatory or legal actions.
TVA’s actual cash expenditures related to Kingston for the nine months totaled $143 million. Without the expenses related to the Kingston recovery, operating expenses for the third quarter would have been flat, compared to the same period in the previous year.
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