Tennessee Valley Authority · NYSE:TVC
Tennessee Valley Authority — Corporate Update (August 2007)
16 slides from Tennessee Valley Authority's corporate update, Aug 1, 2007
Slide 1: TVA Operating Expenses 2008
TVA Operating Expenses 2008 August 1, 2007
Slide 2: Overview
Overview Aligned with the TVA 2007 Strategic Plan Customers People Financial Assets Operations • Continue to reduce our dependency on the market for energy • Encourage energy efficiency and conservation • Provide bundled generation and transmission services to our customers • O&M growth is less than
Slide 3: Electricity Sales Projection
Electricity Sales Projection • Native load sales growth is 3.7% (6,362 GWh) higher than the 2007 budget 2008 Energy Requirements Off-System Sales Directly-Served 0.2% Industrials 22.2% Residential 32.8% Other 4.7% Distributor-Served Commercial & Industrial 40.1% 3
Slide 4: Operating Performance
Operating Performance • Key Drivers of Load Growth (6,362 GWh) – Industrial Growth (2,305 GWh) – Distributor Growth (1,982 GWh) – New Industrial Customers (1,025 GWh) – Leap Year – One additional day (525 GWh) – Bristol, VA (525 GWh) • System peak load of 33,023 MW, up 1.4% over 2007 budget 4
Slide 5: Energy Supply
Energy Supply 2008 MWh Generation by Sources Purchases Change from 8.9% Supply 2007 Budget Gas 0.2% Nuclear 8.7% Nuclear Coal 1.1% Hydro 28.5% 8.1% Gas 139.2% *Hydro 13.1% Purchases 14.9% *2008 Hydro generation based on third Coal 54.3% year drought model 5
Slide 6: Summary Operating Expenses
Summary Operating Expenses 2005 2006 2007 2007 2008 (in billions) Actual Actual Budget Forecast Forecast Fuel (1.9) (2.2) (2.3) (2.4) (2.5) Purchased Power (0.7) (1.1) (1.0) (1.0) (1.4) O&M (2.3) (2.3) (2.4) (2.4) (2.4) Depreciation, Amortization (1.1) (1.5) (1.4) (1.5) (1.5) Taxes and Other (0.4) (
Slide 7: Fuel & Purchased Power Summary
Fuel & Purchased Power Summary (in billions) $4.0 $1.4 $3.0 $1.0 $1.1 $0.7 $2.0 $2.2 $2.4 $2.5 $1.0 $1.9 $0.0 2005 Actual 2006 Actual 2007 Forecast 2008 Forecast Fuel Purchased Power 7
Slide 8: Coal
Coal 2007 Forecast versus 2008 Forecast (in millions) $2,400 Key Drivers $18 ($71) $127 $13 • Coal mix and $2,300 $4 $2,249 sourcing changes Startup $2,200 Oil FCA Other •Market prices $2,149 $9 Inventory $2,100 Volume Increase Adjustments $2,000 Coal Mix & Market $1,900 Prices $1,800 $1,700 $1,600
Slide 9: Purchased Power
Purchased Power 2007 Forecast versus 2008 Forecast (in millions) Key Drivers: $1,400 $136 $1,366 •Capacity cost •Market prices $1,300 $20 ($3) $35 $1,200 $42 Gas Other $154 $1,148 ($134) $45 Transport $77 $1,100 Spot Price of Gas $1,000 $994 Transmission 2007 Volume FCA Decrease Spot Price 2008 FCA
Slide 10: Natural Gas
Natural Gas 2007 Forecast versus 2008 Forecast (in millions) Key Drivers: $50 • Market Prices $47 ($13) • Firm $45 $4 ($4) transportation $6 $40 $40 Gas FCA Transport $35 Volume Spot Price Decrease of Gas $30 $25 $20 2007 2008 Forecast Forecast Includes cost of natural gas used TVA-owned assets only
Slide 11: Nuclear Fuel Expense
Nuclear Fuel Expense 2007 Forecast versus 2008 Forecast (in millions) $280 Key Drivers: ($11) $260 $31 $2 •Generation $246 •Market prices $240 Increased Fuel FCA $28 •BLEU program Inspection $220 and Misc. $7 $200 $189 Increased $180 Increased Burn Spent Fuel Charge Higher $160 Disposal Generation U
Slide 12: O&M Summary
O&M Summary (in billions) $3.0 $2.5 $2.4 $2.4 $2.3 $2.3 $2.2 $2.1 $2.0 $1.5 2005 2006 2007 2008 2009 2010 Actual Actual Forecast Forecast Forecast Forecast • 2008 O&M Outage increased from 2007 due to higher scheduled nuclear outages (4 versus 2) and new capacity in production. • 2008 Productivity i
Slide 13: O&M 2007 Forecast versus 2008 Forecast
O&M 2007 Forecast versus 2008 Forecast (in millions) $2,700 $45 ($122) $33 $2,500 $36 $71 $2,419 Capacity $2,356 Expansion Productivity $2,300 Inflation Improvements at 3% Productivity Investments 2 More $2,100 Nuclear Refueling Outages $1,900 $1,700 2007 2008 Forecast Forecast *O&M does not include
Slide 14: Depreciation and Amortization
Depreciation and Amortization (in millions) $1,600 $54 $9 ($14) $7 $1,517 $1,461 All Nuclear Other Fossil Outage Browns $1,400 Plants Deferral, Ferry Unit 1 Net Restart $1,200 2007 2008 Forecast Forecast 14
Slide 15: System Minutes: Transmission Reliability
Transmission Reliability 24 22.1 Duration of Interruptions 20 18.4 18.4 Good 16 14.5 System Minutes 13.7 13.7 US 1st Qtl (5-Yr) = 6.01 US 1st Decile (5-Yr) = 4.53 12 10.2 12.1 11.6 10.2 9.0 9.45 9.3 7.5 7.89 8 9.3 6.19 8.2 8.2 6.0 6.7 4.04 4.88 4 4.21 3.34 0 1982 1984 1986 1988 1990 1992 1994 1996 1
Slide 16: Summary
Summary The 2008 Business Plan: • Supports the strategic plan’s focus • Supports TVA’s historic, three-part mission: energy, environment and economic development • Meet demand growth needs in the Valley • Promote energy efficiency • Use of sound financial principles • Holds O&M flat Budget approval
Tennessee Valley Authority — Corporate Update (August 2007) on 6ix