TVA also said that sales have been decreased by around 2%. The increase in revenue was due primarily to an increase in TVA’s fuel cost adjustment due to higher fuel and purchased power costs and base rate increases.
A decrease in TVA’s fuel cost adjustment in January 2009 and again in April 2009 will result in reduced wholesale power rates.
TVA spent almost $1.4 billion on fuel and purchased power during the first quarter, an increase of $461 million or 50% compared with the same three-month period the previous year.
At the end of the first quarter, TVA recognized expenses of $525 million for estimated costs related to the ash spill at Kingston Fossil Plant on Dec. 22. Current estimates on clean-up costs range from $525 million to $825 million, depending on the method of ash disposal that is assumed. The range does not include costs for items such as regulatory actions, litigation or long-term environmental remediation.
After almost three years of drought conditions, rainfall in the eastern part of the Tennessee Valley was 96% of normal and runoff (the amount of water that reaches streams and rivers) was 65% of normal during the first quarter of the 2009 fiscal year. As a result, hydroelectric generation increased by 1.1 billion kilowatt hours compared to the first quarter of previous year.
Rainfall and runoff continued to improve during January of 2009. TVA also met a record winter power demand of 32,572 megawatts on Jan. 16 without any interruptions.
“We recognize the impacts that the economic slowdown is having on power sales and are evaluating ways we can reduce our costs and continue to provide reliable, affordable power to the consumers in the Tennessee Valley,” said TVA chief financial officer Kim Greene. “While we expect our sales to continue to be affected throughout the fiscal year, we are confident that the region will recover as the nation’s economy recovers.”
