Tennessee Valley Authority · NYSE:TVC
Tennessee Valley Authority — Investor Presentation (February 2013)
54 slides from Tennessee Valley Authority's investor presentation, Feb 14, 2013
Slide 1: TVA Board Meeting
TVA BOARD MEETING FEBRUARY 14, 2013
Slide 2: Lynn Evans, Peter Mahurin, Michael McWherter, Joe Ritch
Lynn Evans Peter Mahurin Michael McWherter Joe Ritch
Slide 3: TVA Board Meeting
TVA BOARD MEETING FEBRUARY 14, 2013
Slide 4: President's Report
4 PRESIDENT’S REPORT FEBRUARY 14, 2013
Slide 5: First Impressions
PRESIDENT’S REPORT 5 FIRST IMPRESSIONS
Slide 6: Safety
PRESIDENT’S REPORT 6 SAFETY
Slide 7: Safety
PRESIDENT’S REPORT 7 SAFETY
Slide 8: TVA's Unique Mission, Role
PRESIDENT’S REPORT 8 TVA’S UNIQUE MISSION, ROLE
Slide 9: TVA's Unique Mission, Role
PRESIDENT’S REPORT 9 TVA’S UNIQUE MISSION, ROLE
Slide 10: Partnering on Clean Air
PRESIDENT’S REPORT 10 PARTNERING ON CLEAN AIR
Slide 11: Watts Bar Unit 2
PRESIDENT’S REPORT 11 WATTS BAR UNIT 2
Slide 12: Sequoyah Steam Generator Project
PRESIDENT’S REPORT 12 SEQUOYAH STEAM GENERATOR PROJECT
Slide 13: Sequoyah Nuclear
PRESIDENT’S REPORT 13 SEQUOYAH NUCLEAR
Slide 14: Browns Ferry Nuclear Plant
PRESIDENT’S REPORT 14 BROWNS FERRY NUCLEAR PLANT
Slide 15: Economic Development
PRESIDENT’S REPORT 15 ECONOMIC DEVELOPMENT
Slide 16: Rate Pressure
PRESIDENT’S REPORT 16 RATE PRESSURE O&M and Base Capital (millions) Sales (TWh) $5,000 200 Projected Spend $4,000 190 Actual Spend $$3,000 , 180 $2,000 Actual Sales 170 $1,000 Projected Sales 160 $0 150 2007 2008 2009 2010 2011 2012 2013 Plan
Slide 17: Raccoon Mountain Pumped Storage
PRESIDENT’S REPORT 17 RACCOON MOUNTAIN PUMPED STORAGE
Slide 18: John Sevier Combined Cycle
PRESIDENT’S REPORT 18 JOHN SEVIER COMBINED CYCLE
Slide 19: Integrated Resource Plan
PRESIDENT’S REPORT 19 INTEGRATED RESOURCE PLAN
Slide 20: River Forecast Center
PRESIDENT’S REPORT 20 RIVER FORECAST CENTER
Slide 21: Spilling at Fontana
PRESIDENT’S REPORT 21 SPILLING AT FONTANA
Slide 22: Personal Commitment
PRESIDENT’S REPORT 22 PERSONAL COMMITMENT
Slide 23: President's Report
23 PRESIDENT’S REPORT FEBRUARY 14, 2013
Slide 24: External Relations Committee
24 EXTERNAL RELATIONS COMMITTEE FEBRUARY 14, 2013
Slide 25: Clean Energy Update
EXTERNAL RELATIONS COMMITTEE 25 EXTERNAL RELATIONS COMMITTEE CLEAN ENERGY UPDATE FEBRUARY 14, 2013
Slide 26: What Is Clean Energy?
EXTERNAL RELATIONS COMMITTEE | CLEAN ENERGY UPDATE 26 WHAT IS CLEAN ENERGY? Definition Energy that has a zero or near-zero carbon emission rate and energy efficiency improvements Examples p Nuclear, renewables (including hydro), demand reduction or waste heat recovery y
Slide 27: TVA's Clean Energy Portfolio
EXTERNAL RELATIONS COMMITTEE | CLEAN ENERGY UPDATE 27 TVA’S CLEAN ENERGY PORTFOLIO Clean Energy 74,019 GWh 44% FY12 Total Energy 168,614 GWh
Slide 28: Current Clean Energy Generation (% of Total)
EXTERNAL RELATIONS COMMITTEE | CLEAN ENERGY UPDATE 28 CURRENT CLEAN ENERGY GENERATION (% OF TOTAL) 100% 90% 80% 70% 60% 50% 40% 30% 20% TVA is projected to be approximately 45% 10% clean this year, growing over this decade 0% 2013 2014 2015 2016 2017 2018 2019 2020 20 Nuclear Hydro Other Renewables
Slide 29: Finance, Rates, and Portfolio Committee
29 FINANCE, C , RATES, S, AND PORTFOLIO COMMITTEE FEBRUARY 14, 2013
Slide 30: First Quarter Financial Update
FINANCE, RATES, AND PORTFOLIO COMMITTEE 30 FINANCE, RATES, AND PORTFOLIO COMMITTEE FIRST QUARTER FINANCIAL UPDATE FEBRUARY 14, 2013
Slide 31: First Quarter Summary
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FIRST QUARTER FINANCIAL UPDATE 31 FIRST QUARTER SUMMARY Net Income $60M Favorable to Plan but $72M Less than Last Year Base Revenues • Mild weather drove lower non-fuel revenue 9% lless d degree d days | 8% llower peakk | 2% lless sales l • Compared to prior
Slide 32: Q1 Summary Income Statement
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FIRST QUARTER FINANCIAL UPDATE 32 Q1 SUMMARY INCOME STATEMENT Base Revenue Impacted by Weather and Offset by Less Spending In Projects and Labor FY13 Q1 FY13 Q1 Variance FY12 Q1 ($ millions) Actual Budget Fav/(Unfav) Actual Operating Revenue $ 2,579 $ 2,578
Slide 33: Fuel & Purchased Power
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FY13 FIRST QUARTER FINANCIAL UPDATE 33 FUEL & PURCHASED POWER FY13 Rates Higher than FY12 – Higher Natural Gas G Prices and More Nuclear Outages O $/MWh 30 FY13 Plan 26 FY13 Actual 22 FY12 Actual 18 Oct Nov Dec Jan Feb Mar Apr May Jun
Slide 34: Q1 Summary Cash Flow Statement
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FIRST QUARTER FINANCIAL UPDATE 34 Q1 SUMMARY CASH FLOW STATEMENT FY13 Q1 FY13 Q1 Variance FY12 Q1 Fiscal Year to Date ($ millions) Actual Budget Fav/(Unfav) Actual p Cash Flow from Operatingg Activities 257 262 ( ) (5) 257 Cash Flow from Investing Activities
Slide 35: Summary
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FIRST QUARTER FINANCIAL UPDATE 35 SUMMARY Challenges • Mild weather and soft economy impacting revenue Focus Areas • Managing operations and maintenance spending • Continue asset recovery and investment Risks • Weather • Fuel prices
Slide 36: Nuclear Oversight Committee
36 NUCLEAR UC OVERSIGHT COMMITTEE FEBRUARY 14, 2013
Slide 37: Sequoyah Steam Generator Project
PRESIDENT’S REPORT 37 SEQUOYAH STEAM GENERATOR PROJECT
Slide 38: Nuclear Fleet
PRESIDENT’S REPORT 38 NUCLEAR FLEET
Slide 39: Watts Bar Unit 2
PRESIDENT’S REPORT 39 WATTS BAR UNIT 2
Slide 40: People and Performance Committee
40 PEOPLE O AND PERFORMANCE COMMITTEE FEBRUARY 14, 2013
Slide 41: FY13 Incentive Goals
PEOPLE AND PERFORMANCE COMMITTEE 41 PEOPLE AND PERFORMANCE COMMITTEE FY13 INCENTIVE GOALS FEBRUARY 14, 2013
Slide 42: For Board Consideration
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 42 FOR BOARD CONSIDERATION • Enterprise-wide performance measures and goals for the Winning Performance Team Incentive Plan and the Executive Annual Incentive Plan for Fiscal Year 2013 • Performance measures and goals for the ELTIP for the Fisc
Slide 43: Executing TVA's Mission
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 43 EXECUTING TVA’S MISSION To execute TVA’s mission, we must actively manage a portfolio of assets to deliver superior value to our customers as measured by… Rates R t Financial Financial Health Excellence Budget Commitment Nuclear N l Coal Ope
Slide 44: Key Performance Metrics
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 44 KEY PERFORMANCE METRICS Incentive plans motivate and reward employees for achieving goals aligned to TVA’s mission, vision and values Rates Retail Rate (ELTIP) Financial Financial Health Total Financing Obligations over Productive Assets (WP
Slide 45: Target Setting Guidelines
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 45 TARGET SETTING GUIDELINES Continuous Improvement with Top Quartile Aspirations Threshold Target Stretch Where Performance Is… 50% 100% 150% Below Median 3-Year Average Median Top Quartile Better than Top Better than Median 3-Year Average Top
Slide 46: Summary of Long-Term Goals
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 46 SUMMARY OF LONG-TERM GOALS Long-term 3-YR Threshold Target Stretch Weight Performance nce 8.51 7.72 Financiial 8 51 8.51 8 36 8.36 Excellen Retail Rate 40% 3-Year Top 3rd Quartile Median average Quartile Operational ce 44 4.4 78 7.8 65 6.5 3
Slide 47: Summary of Enterprise-Wide Annual Goals
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 47 SUMMARY OF ENTERPRISE-WIDE ANNUAL GOALS 3 yr Weight Threshold Target Stretch Performance Excellence 75.6% 75.2% 74.8% Financial Total Financing Obligations over Productive 15% 77.4% Business Plan Business Business Plan Assets + 0.4% pt Plan
Slide 48: Annual Incentive Plan Design Changes
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 48 ANNUAL INCENTIVE PLAN DESIGN CHANGES Adjustments to the Winning Performance Team Incentive Plan and the Executive Annual Incentive Plan Design • Adjust corporate modifier – Range from 75% to 125% – Consider all financial and non non-financia
Slide 49: Recommendation
PEOPLE AND PERFORMANCE COMMITTEE | FY13 INCENTIVE GOALS 49 RECOMMENDATION • Enterprise-wide performance measures and goals for the Winning Performance Team Incentive Plan and the Executive Annual Incentive Plan for Fiscal Year 2013 • Performance measures and goals for the ELTIP for the Fiscal Years
Slide 50: Audit, Risk, and Regulation Committee
50 AUDIT, U , RISK, S , AND REGULATION COMMITTEE FEBRUARY 14, 2013
Slide 51: Proposed Committee Membership
TVA BOARD MEETING 51 TVA BOARD MEETING PROPOSED COMMITTEE MEMBERSHIP FEBRUARY 14, 2013
Slide 52: Proposed Committee Membership
TVA BOARD MEETING | PROPOSED COMMITTEE MEMBERSHIP 52 PROPOSED COMMITTEE MEMBERSHIP Audit, Risk, and Regulation Finance, Rates, and Portfolio Nuclear Oversight • Neil McBride • Pete Mahurin • Bill Sansom • Lynn Evans • Richard Howorth • Joe Ritch • Joe Ritch • Barbara Haskew • Mike McWherter • Bill S
Slide 53: Appendix: Regulation G Reconciliation
FINANCE, RATES, AND PORTFOLIO COMMITTEE | FIRST QUARTER FINANCIAL UPDATE 53 APPENDIX: REGULATION G RECONCILIATION Dec. 31, 2012 Total Debt and Other Financing Obligations, gross $ 27,364 Exchange loss 46 Unamortized discounts, premiums, and other (85) Energy prepayment obligations (586) Leaseback ob
Slide 54: TVA Board Meeting
TVA BOARD MEETING FEBRUARY 14, 2013
Tennessee Valley Authority — Investor Presentation (February 2013) on 6ix