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TVA's Revenue Plummets Due to Storms and Other Factors

KNOXVILLE -- The series of deadly tornadoes on April 27 and 28 effected TVA's income for the three-month period ending June 30. Other factors causing the income reduction were outages at three of TVA's six reactors.

"It was a matter of timing and duration for the refueling outages, along with maintenance projects to increase our plant reliability," Chief Financial Officer John Thomas said.

Approximately 850,000 homes and businesses within TVA's service range were without power and over 90 large transmission lines were damaged. The transmission system in Alabama, Mississippi, and Tennessee had to be rebuilt.

"This was a significant event and the response of TVA employees was outstanding, but it obviously had some financial impact," Thomas said.

TVA reported a net loss of $240 million on $2.7 billion in revenues for the three month period, compared with net income of $199 million on $2.6 billion in revenues for the same period a year ago.

Fuel expenses rose by $75 million, to $584 million, for the three-month period, while power purchases increased by $110 million, to $387 million. Operating and maintenance expenses were up $237 million, to $994 million, compared with the third quarter of 2010.

"Economic recovery in our region, like the rest of the country, has been slow," Thomas said. "That may have been impacted somewhat by the April storms, but recent national events have caused concern about when the economy might recover."

One aspect of TVA's power system that has benefited from the weather is hydroelectric generation, TVA's least expensive energy source. Because of wetter-than-normal conditions, hydro production was up 47 percent in the third quarter compared with 2010.

The completion date for Watts Bar Nuclear Plant's Unit 2 has been extended from late 2012 into 2013 and the two remaining units at John Sevier Fossil Plant will be idled by Dec. 31, 2012.

Source: TVA

Published August 11, 2011

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