KNOXVILLE, Tenn. — The Tennessee Valley Authority reported a net loss of $37 million for the first three months of fiscal year 2016 ending Dec. 31, 2015. Net income was $118 million lower compared to the same period last year due in part to $131 million lower operating revenues, representing a 5 percent decrease, primarily driven by weather. Temperatures in the Tennessee Valley in December were the mildest in more than 50 years, contributing to 8 percent lower sales of electricity compared to the same period a year ago.
Operating expenses for the first quarter of 2016 increased by less than 1 percent versus the same period in the prior year. Operating costs were helped by $56 million lower fuel and purchased power expense as a result of lower sales, more hydroelectric and natural gas-fired generation, as well as lower natural gas prices. Non-fuel operating and maintenance costs were $52 million higher than in the same period last year, driven primarily by nuclear refueling outages and remediation work at Boone Dam.
“TVA customers continue to benefit from the diversity of our power system, which helped keep costs lower in the first quarter, despite unusual conditions,” said TVA President and CEO Bill Johnson. “Increased output from TVA’s robust hydroelectric system and low cost natural gas-fired power helped offset lower revenues, limiting the impact on TVA’s financial performance. We are also maintaining good discipline in managing our costs, which is particularly important in periods of lower sales and revenues.”
TVA’s mission of environmental stewardship includes management of the Tennessee River system for multiple benefits, including flood control. With record-breaking rainfall in December 2015, TVA personnel worked to avert millions of dollars of potential flood damage in the Tennessee Valley during the first quarter of 2016, and worked with the U.S. Army Corps of Engineers to reduce impacts on the Ohio and Mississippi Rivers through coordinated use of TVA’s system of dams.
“This past December was both the warmest and also one of the wettest in TVA history,” said Chief Financial Officer John Thomas. “Guntersville Reservoir, for example, had 9 inches of rainfall on Christmas Day alone — something that happens only every 100-200 years.”
“It is in these times that we are reminded of the value of TVA’s stewardship mission and that TVA is more than a power company,” Johnson added. “It was the dedication of TVA’s employees that helped prevent the loss of life and property across the Tennessee Valley.”
TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including unaudited financial statements for the quarter ended Dec. 31, 2015, and is available to investors and the public.
TVA financial reports are also available without charge on TVA’s website at <http://www.tva.com/investors> or on the SEC’s website at <http://www.sec.gov> or by calling TVA toll free at 1-888-882-4975.