TVA Maintains Reliability and Low Prices Amid Weather Challenges in 2010

The Tennessee Valley Authority delivered solid performance in 2010, maintaining high reliability and competitive prices despite extreme weather stress, CEO Tom Kilgore told the board on November 4.

Record heat and a rare cold snap pushed TVA to activate higher‑cost peaking plants, purchase supplemental power, and tighten management of transmission lines.

Nevertheless, TVA’s operations ran at 99.999 % uptime—the industry’s best for 11 consecutive years—and retail rates averaged 7.7 cents/kWh, down from 8.4 cents in 2009 and below the national average.

The fiscal year that ended September 30 marked a sharp turnaround from 2009’s recession‑induced sales decline, Kilgore said during the board meeting at the Browns Ferry Nuclear Plant.

“This year was a win for TVA’s customers,” Kilgore said, noting that TVA expects no base‑rate increases in fiscal 2011. The summer’s efficient operations saved the utility and its customers millions of dollars.

TVA paid $550 million in tax‑equivalent contributions to eight states and 144 local governments—9 % more than 2009—supporting communities that cannot levy property taxes on federal entities, a legacy dating back to the 1933 TVA Act.

Kilgore outlined TVA’s vision to become a national leader in clean, low‑cost electricity by 2020, emphasizing the role of Browns Ferry’s nuclear fleet, which emits no air pollutants or carbon. The utility plans to expand nuclear capacity and accelerate energy‑efficiency initiatives.

Browns Ferry’s Unit 1 reactor recently completed 586 days of uninterrupted output, while Unit 3 set an industry record in 2002 with 669 consecutive days, generating 18 million MWh— the world record then.

The heat‑wave’s impact forced TVA to throttle Browns Ferry’s output to protect river temperatures and fish habitats; the board approved funding for new cooling towers to mitigate future thermal stress.

Kilgore reaffirmed TVA’s commitment to peak‑load reduction. The utility exceeded its 2010 goal by cutting 102 MW of peak demand, achieving a 114 MW net reduction in fiscal 2010. Over three years, TVA has lowered peak demand by 317 MW—roughly the capacity of a mid‑size power plant.

Reducing peak demand lowers operating costs for utilities and translates to lower bills for consumers.

The board also reviewed fiscal 2011 executive compensation tied to performance metrics that drive operational efficiency and cost containment.

TVA is a federally owned corporation that serves 9 million residents across 80,000 sq mi in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia. Its fleet includes 29 hydro dams, 11 coal plants, 3 nuclear reactors, and 11 natural‑gas units, delivering up to 33,700 MW over 16,000 mi of high‑voltage lines. TVA also manages flood control, navigation, land stewardship, and recreation on the Tennessee River system, partnering with local utilities and governments to spur regional economic growth. As a non‑profit entity, TVA is funded solely by electricity sales, keeping rates below the national average.