In its last TVA Board meeting of the year, TVA CFO Tom Rice presented TVA’s current financial situation. You don’t need to listen to me on why TVA doesn’t need an urgent debt ceiling increase. Tom laid it out very nicely.
First, Tom explains that TVA is making money hand over fist:
“Even though our power sales were below budget, our operating revenues came in above reasons, really for two reasons, one is our base revenues. We really saw higher demand-driven revenues this year, driven by two key events. The Winter Storm Fern in January we saw really high system peaks. And then September of this year came in as very warm. We actually set our yearly peak this year in September, which is very unusual for us, and we saw a streak of high demands across September. That produced favorable base revenues.” ~TVA CFO at November 2026 TVA Board meeting in Knoxville
TVA can thank climate change for more extreme weather events and hotter weather in general. I can remember when September was considered fall. Not anymore.
The other reason is lower operations and maintenance (O&M) costs. Tom gives two reasons that expense is much lower. First is TVA’s ongoing project to reduce costs, simple enough. Here’s how he describes the second:
“The other big driver is the recognition of tax credits that TVA’s eligible for really for the first time in our history. So over the last three years, we’ve actually been eligible for just over four hundred million dollars worth of tax credits, which has been really helpful to us as we take those credits and we invest them right back into the system, for reliable, low-cost power moving forward. And you see that in this year’s O&M number as well.” ~TVA CFO at November 2026 TVA Board meeting in Knoxville
TVA ended its fiscal year with $1 billion less in debt than it projected: $24 billion as opposed to $25 billion. TVA is still well enough within its $30 billion debt limit that it doesn’t need to rush a debt increase. This is not to say that TVA’s debt limit should never be increased, but that to do so in a rushed and non-transparent manner right now is unnecessary.
