TVA had net loss of $64 million last fiscal quarter

By Richard Powelson · News-Sentinel

In this mention

TVA reported a $64 million net loss in the last fiscal quarter, attributed primarily to mild winter weather reducing power demand. The Tennessee Valley Energy Reform Coalition's spokesman Stephen Smith criticized TVA for offering "sweetheart deals" to certain industries, citing a 10-year contract with Trico Steel at rates as low as 1-1.5 cents per kilowatt hour. TVA's debt reached $27 billion with $503 million of quarterly revenues going to interest payments.

TVA is losing money in part because its gives "sweetheart deals" to certain industries
Stephen A. Smith

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TVA had net loss
of $64 million
last fiscal quarter
Drop blamed on warmer weather
that led to lower power demand
By Richard Powelson
News-Sentinel Washington bureau

WASHINGTON — TVA had a
$64 million net loss in income in
the last quarter, which was
blamed mostly on lower power
revenues due to a mild winter,
the agency confirmed Friday.
That compares to a $31 mil-
lion net gain in income for the
same quarter in 1995, reported
TVA, the wholesale power pro-
ducer for parts of seven states, in-
cluding Tennessee.
TVA spokesman Frank Cason
said quarterly gains or losses in
income are not as significant as
the year-end numbers.
"We have cash flow, and we're
paying the bills," he said.
The weather this summer will
have a big bearing on year-end in-
come, he said.
A watchdog group, the Ten-
nessee Valley Energy Reform Co-
alition, said TVA also could lose
money this quarter due to mild
weather and lower demand.
Spokesman Stephen Smith said
TVA is losing money in part be-
cause its gives "sweetheart
deals" to certain industries.
He noted a 10-year deal with
Trico Steel in Decatur, Ala.,
where TVA allegedly sold power
at bargain-basement prices as low
as 1 cent to 1.5 cents per kilowatt
hour. Trico Steel is owned by
LTV Steel, which formerly em-
ployed David N. Smith as a vice
president for finance. Smith now
is TVA's chief financial officer.
In TVA's fourth quarter 1996
report, TVA Chairman Craven
Crowell said the power agency
"continued to demonstrate oper-
ational excellence."
The net loss in income of $64
million, he reported, was caused
by several factors: unseasonably
warm weather, higher deprecia-
tion and operating costs from two
additional nuclear units in serv-
ice and interest expenses on debt
rising by $17 million.
TVA's revenues during the
quarter were $1.3 billion, and
$503 million of that went to pay
interest on TVA's $27 billion
debt. TVA plans to begin reduc-
ing its debt, Crowell has said, but
he has not said by how much or
how that will be possible.