TVA Files 2006 Annual Report with SEC
Operating Revenues Top $9 Billion; Fuel, Purchased Power Costs up 28 Percent
December 15, 2006
TVA today filed its first-ever Form 10-K annual report with the Securities and Exchange Commission, reporting total operating revenues of almost $9.2 billion for the 2006 fiscal year, an increase of 18 percent from the previous year.
While not previously required to file reports with the SEC, TVA has made financial and operational information available to the public in the past and has provided quarterly and annual financial information in a format similar to that of SEC reports in recent years. The Consolidated Appropriations Act that restructured the TVA Board to nine members also requires TVA to file certain financial reports with the SEC beginning with the filing of the 2006 annual report.
In the Form 10-K, TVA reported net income of $329 million for the year that ended Sept. 30, 2006, an increase of $244 million from $85 million in the 2005 fiscal year. Total operating expenses for the year were almost $7.6 billion, an increase of 17 percent from the previous year.
Fuel and purchased power costs in 2006 increased by $732 million, or 28 percent, from the prior year and accounted for nearly 44 percent of TVA’s total operating expenses.
TVA power sales for 2006 totaled more than 176 million kilowatt-hours, an increase of about 3 percent from last year. The increase in power sales along with higher rates contributed significantly to the increase in operating revenues.
“TVA faced several challenges in 2006 including rapidly rising fuel and purchased power costs and lower-than-normal rainfall that reduced our hydro generation,” said TVA President and Chief Executive Officer Tom Kilgore. “Despite the challenges during 2006, we were able to hold the line on costs that are under our control. Operating and maintenance costs rose by less than 1 percent from the previous year.”
“Approval of a quarterly fuel cost adjustment by the TVA Board will allow us to more effectively manage fuel and purchased power costs in the future,” he said.
Looking ahead to 2007, Kilgore said TVA will continue to improve its efforts to control costs and increase efficiencies. He said the addition of generating units, including two peaking plants that TVA plans to purchase and the restart of Browns Ferry Unit 1, should help reduce TVA’s dependence on purchased power to meet growing power demand.
During the summer of 2006, TVA met 16 of the highest daily peak power demands ever, including an all-time record peak power demand of 32,008 megawatts on July 18. The transmission system achieved 99.999 percent reliability in transmitting power to TVA customers for the seventh consecutive year.
TVA fossil plants produced the lowest amount of nitrogen oxide emissions, which contribute to the formation of ozone, since 1995 through continued investment in emissions- control equipment.
TVA also reported that it reduced its total financing obligations by $341 million in 2006, compared to $302 million in 2005. TVA’s total financing obligations were $25.2 billion as of Sept. 30, 2006. Net interest expense for the year was $46 million lower than in 2005.
Investors are encouraged to read the Form 10-K annual report for the year that ended Sept. 30, 2006, which includes financial, operational and descriptive information, including financial statements for the year ended Sept. 30, 2006. The public may read reports or other information that TVA files with the SEC at its Public Reference Room at 100 F St., N.E., Washington, D.C. 20549. TVA’s SEC reports are also available to the public from the SEC, on TVA’s website or by calling TVA toll-free at (888) 882-4975.
TVA is the nation’s largest public power provider and is completely self financed. TVA provides power to large industries and 158 power distributors that serve approximately 8.7 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.
(This release and TVA’s Form 10-K annual report may contain forward-looking statements relating to future events and future performance. An example of a forward-looking statement is the statement in this release that the addition of generation units will help reduce TVA’s dependence on purchased power to meet growing power demand. Although TVA believes that the assumptions underlying the forward-looking statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Some of these factors are discussed on pages 4 and 5 of TVA’s Form 10-K annual report filed with the SEC. )
Media Contact
John Moulton, (865) 632-8048
TVA News Bureau, Knoxville, (865) 632-6000
