Weather boosts TVA’s performance
NORTH MISSISSIPPI — Increased demand, primarily related to colder weather, boosted sales of electricity from the Tennessee Valley Authority (TVA) by nearly 10 percent in the second quarter of the 2010 fiscal year as compared with the same time a year ago.
Sales to industrial customers also increased nearly 12 percent during the period, which ended March 31.
“Economic conditions appear to be improving in some parts of our service area,” said interim CFO John Hoskins. “Still, TVA is managing various challenges including the ongoing cleanup work at Kingston, funding large power system investment projects and helping to inspire industry and job growth in the region.”
TVA reported net income for reinvestment of $430 million in its quarterly report for March 31, 2010, on Form 10-Q filed April 30 with the Securities and Exchange Commission. That compares with a net income for reinvestment of $133 million for the second quarter of the previous fiscal year, which included $150 million in expenses from the Kingston ash spill recovery effort. The TVA board of directors subsequently approved recovering those costs in rates over 15 years.
Despite increased sales, operating revenue for the second quarter fell by 11 percent compared with the same period a year ago to $2.6 billion — a drop of $311 million from the second quarter of 2009. The decrease primarily results from fuel cost adjustments since Oct. 1.
Operating expenses also decreased $628 million from a year ago to $1.9 billion, primarily because of a 51 percent reduction in fuel and purchased power expenses over that time.
Abundant rainfall during the winter also allowed TVA to increase lower-cost hydroelectric power generation by 82 percent compared with the first half of 2009.
TVA expects to meet its capital budget for 2010, Hoskins said, which includes spending for construction of environmental control equipment, new generation and dry storage facilities for coal combustion products.
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