The Tennessee Valley Authority reported $8.4 billion in total operating revenues on 118 billion kilowatt-hours of electricity sales for the nine months ended June 30, 2022.
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Total operating revenues increased 14% over the same period last year, primarily due to an increase in fuel cost recovery revenue driven by higher fuel rates.
Sales of electricity increased approximately 3 percent compared to the same period of the prior year. The increase in sales volume was primarily driven by economic growth in the Tennessee Valley.
Fuel and purchased power expense increased $879 million in the first nine months of 2022 over the same period of the prior year, primarily due to higher fuel and purchased power prices. Lower nuclear output due to the Watts Bar Unit 2 steam generator replacement project and fewer significant rain events resulting in lower hydroelectric generation also contributed to higher fuel and purchased power costs.
Natural gas prices were 141 percent higher this June versus last year, and coal prices are also up significantly. However, TVA's effective power rate, inclusive of fuel cost, is only 11 percent higher this year, which demonstrates the value of TVA's diverse generation fleet and proactive hedging programs.
Depreciation and amortization expense increased $391 million for the nine months ended on June 30, 2022, primarily due to a change in depreciation rates following an updated depreciation study.
The study included planning assumptions to potentially retire the remainder of TVA's coal-fired fleet by 2035.
Operating and maintenance expense increased by $163 million over the same period last year, driven by labor escalation, routine nuclear maintenance work, an increase in nuclear outage days, natural gas and hydroelectric maintenance projects, and additional inventory reserves and write-offs.
Interest expense decreased by $33 million for the nine months ended Jun. 30, 2022 – a 4 percent decrease from the prior year – due to lower debt balances and lower average long-term rates.
TVA's net income was $476 million for the first nine months of fiscal year 2022, which was $433 million lower than the same period of the prior year due mainly to higher operating expenses. ■