Weather boosts TVA’s quarterly revenues
NORTH MISSISSIPPI — Warmer-than-normal weather in the spring and early summer, along with an improving economy, helped boost Tennessee Valley Authority electricity sales by 6 percent in the third quarter of fiscal 2010, compared with the same period a year earlier.
“Average temperatures were nearly five degrees hotter than normal in May and June across our service area,” CFO John Thomas said. “Sales to large industrial customers during the period were up 12 percent over the same time a year ago, indicating some signs of growth in the regional economy.”
TVA’s fiscal third quarter includes the months of April, May and June.
In addition to higher sales, TVA’s rates for electricity were slightly lower during the third quarter than the same period last year. The region experienced a wetter-than-normal fall and above-average rainfall in May, enabling TVA to run lower-cost hydroelectric generation at 36 percent above 2009 output through the first three quarters of the fiscal year.
TVA reported net income for reinvestment of $199 million in its quarterly report for the three months ending June 30, on TVA’s Form 10-Q filed Aug. 2, with the Securities and Exchange Commission. That compares with a net loss of $167 million for the third quarter of the previous fiscal year, which included $258 million in expenses from the Kingston ash spill recovery effort. The TVA board of directors subsequently approved recovering those costs in power rates over 15 years.
Despite increased sales, operating revenue for the third quarter increased by only 1 percent to $2.59 billion — up from $2.57 billion from the third quarter of 2009. Revenue remained nearly flat, mainly because of decreases in the fuel cost adjustment, which reflected reduced expenses for fuel and purchased power. Year-to-date revenues were down 12 percent from the nine-month period a year ago, mainly because of the lower fuel cost adjustment.
Fuel and purchased power expenses for the quarter dropped by nearly 25 percent from the same time a year ago. Operating expenses overall decreased $352 million from a year ago to $2.1 billion. Operating expenses for the first nine months of the fiscal year were also 27 percent lower than the same period a year ago, primarily because of lower fuel and purchased power expenses. Expenses recognized for the Kingston ash spill recovery are not present in the 2010 figures.
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