Tennessee Valley Authority · NYSE:TVC
Tennessee Valley Authority — Investor Presentation (May 2017)
60 slides from Tennessee Valley Authority's investor presentation, May 11, 2017
Slide 1: Board Meeting
Board Meeting May 11, 2017 Murfreesboro, Tennessee
Slide 2: President's Report
President’s Report BILL JOHNSON President and CEO
Slide 3: Jack Simmons
Jack Simmons PRESIDENT’S REPORT | 3
Slide 4: Working as Partners
Working as Partners PRESIDENT’S REPORT | 4
Slide 5: Preparing for Tomorrow's Jobs
Preparing for Tomorrow’s Jobs PRESIDENT’S REPORT | 5
Slide 6: Solar-Power Student Competition
Solar-Power Student Competition PRESIDENT’S REPORT | 6
Slide 7: Building STEM Skills
Building STEM Skills PRESIDENT’S REPORT | 7
Slide 8: Mission to Serve
Mission to Serve Energy Delivering affordable, Maintain low rates reliable power Meet reliability Environment Be expectations responsible Caring for our region’s & provide a stewards natural resources balanced portfolio Economic Development Creating sustainable Live within our means economic growth
Slide 9: Financial Performance
Financial Performance PRESIDENT’S REPORT | 9
Slide 10: Energy | Environment | Economic Development
Energy | Environment | Economic Development PRESIDENT’S REPORT | 10
Slide 11: Energy | Environment | Economic Development
Energy | Environment | Economic Development PRESIDENT’S REPORT | 11
Slide 12: More Diverse Generation
More Diverse Generation Paradise PRESIDENT’S REPORT | 12
Slide 13: Serving with Pride
Serving with Pride Paradise PRESIDENT’S REPORT | 13
Slide 14: Coal and Natural Gas Progress
Coal and Natural Gas Progress Gallatin Shawnee Allen PRESIDENT’S REPORT | 14
Slide 15: Largest TVA-owned Solar
Largest TVA-owned Solar Solar Construction PRESIDENT’S REPORT | 15
Slide 16: Safe and Reliable Nuclear Energy
Safe and Reliable Nuclear Energy Refueling PRESIDENT’S REPORT | 16
Slide 17: Increasing Energy Efficiency
Increasing Energy Efficiency eScore PRESIDENT’S REPORT | 17
Slide 18: Investing in the Power System
Investing in the Power System PRESIDENT’S REPORT | 18
Slide 19: Energy | Environment | Economic Development
Energy | Environment | Economic Development PRESIDENT’S REPORT | 19
Slide 20: Managing the River System
Managing the River System PRESIDENT’S REPORT | 20
Slide 21: Economic Value of Recreation
Economic Value of Recreation PRESIDENT’S REPORT | 21
Slide 22: Economic Value of Recreation
Economic Value of Recreation PRESIDENT’S REPORT | 22
Slide 23: Energy | Environment | Economic Development
Energy | Environment | Economic Development PRESIDENT’S REPORT | 23
Slide 24: Fostering Quality Growth
Fostering Quality Growth 46,100 $4.8 billion Jobs created and/or retained In capital investment PRESIDENT’S REPORT | 24
Slide 25: Energy | Environment | Economic Development
Energy | Environment | Economic Development PRESIDENT’S REPORT | 25
Slide 26: Serving the Valley
Serving the Valley Bill Adams Jessica Breaux PRESIDENT’S REPORT | 26
Slide 27: Earning Industry Recognition (EPRI)
Earning Industry Recognition (EPRI) PRESIDENT’S REPORT | 27
Slide 28: Honored by Department of Justice
Honored by Department of Justice Pictured: Denise Smith with Melanie Ann Pustay, Director, Department of Justice, Office of Information Policy PRESIDENT’S REPORT | 28
Slide 29: Best American Employers
Best American Employers PRESIDENT’S REPORT | 29
Slide 30: Board Meeting
Board Meeting May 11, 2017 Murfreesboro, Tennessee
Slide 31: Finance, Rates, and Portfolio Committee
Finance, Rates, and Portfolio Committee
Slide 32: Financial Performance Update
Financial Performance Update JOHN THOMAS Executive Vice President and Chief Financial Officer
Slide 33: Q2 Fiscal Year 2017
Q2 Fiscal Year 2017 Net Income: $313M • $183M more than budget and $32M above last year Operating Revenues: $131M above budget • Higher demand and fuel revenue Operating & Maintenance Expenses: $44M favorable to budget • Routine, Committed, and Other O&M favorability Interest Expense: $32M favorable
Slide 34: Q2 Summary Income Statement
Q2 Summary Income Statement $183M favorable due to operating revenue and lower expenses FYTD 2017 FYTD 2016 Variance '17 v '16 $ million Actual Budget Fav/(Unfav) Actual Fav/(Unfav) Operating Revenue $ 5,093 $ 4,962 $ 131 $ 4,851 $ 242 Fuel & Purchased Power 1,557 1,452 (105) 1,448 (109) Total O&M 1
Slide 35: Q2 Summary Cash Flow Statement
Q2 Summary Cash Flow Statement TFOs were $718M favorable to budget, reflecting $350M of favorability FYTD 2017 FYTD 2017 FYTD 2016 $ million Actual Budget Variance Actual '17 v '16 Cash Flow from Operating Activities $ 1,516 $ 1,302 $ 214 $ 1,330 $ 186 Cash Flow used in Investing Activities (1,302)
Slide 36: Q2 Summary (Results v. Plan)
Q2 Summary (Results v. Plan) Higher Peak Demand – favorable demand revenue Lower Expenses – depreciation, operating and maintenance, and interest Increased Fuel Cost – lower hydro generation and higher gas prices Lower Debt Balance – favorable cash flows resulting in less debt
Slide 37: Strategic Fiber Initiative
Strategic Fiber Initiative MIKE SKAGGS Executive Vice President Operations
Slide 38: Connect the Valley – Purpose
Connect the Valley – Purpose • Upgrade and expand fiber optic backbone • Improve TVA operations, reliability, and resiliency • Improve TVA system communications • Increase economic development • Incorporate distributed resources efficiently • Support efforts to bring broadband to rural locations
Slide 39: Connect the Valley – Overview
Connect the Valley – Overview • Maintain power rate competitiveness and affordability • Upgrade/install approximately 3,500 miles of fiber optic network • 5-10 year initiative
Slide 40: Connect the Valley – Going Forward
Connect the Valley – Going Forward • Initial routes and build-out to be refined to maximize operational and economic development benefits • Partnerships to be developed and strengthened • Project management processes to be followed • Oversight and updates to be provided
Slide 41: Connect the Valley – Recommendation
Connect the Valley – Recommendation • Recommend approval of the Strategic Fiber Initiative, including authorization to the Chief Executive Officer to approve contracts, projects, and programmatic efforts in accordance with Board approved budgets
Slide 42: Nuclear Fuel Fabrication Contract
Nuclear Fuel Fabrication Contract JOE GRIMES Executive Vice President Generation
Slide 43: Topic
Topic TVA must buy nuclear fuel fabrication to ensure an adequate and uninterrupted supply of fuel for our nuclear reactors at Sequoyah and Watts Bar For Board Consideration in May 2017 Delegate to the CEO the authority to approve a contract with Westinghouse or a successor entity; The contract woul
Slide 44: Background – Nuclear Fuel Cycle
Background – Nuclear Fuel Cycle Discussed in Uranium Feed Contract Presentation Enrichment Conversion to UF6 Fabrication (UO2) Uranium Mines Spent Fuel and Mills (U3O8) Casks Reactors PWR fuel assembly
Slide 45: Background
Background Westinghouse provides competitive offer for fabrication: • Contract would provide all of TVA’s fabrication needs at Sequoyah and Watts Bar from 2021 through 2030 • Pricing compares favorably with competitive offers • Utilizes proven technology and licensed product • TVA will obtain approp
Slide 46: Recommendation
Recommendation • Delegate to the CEO the authority to approve a contract with Westinghouse or a successor entity; The contract would have a value of up to $450 million and a proposed term of 14 years
Slide 47: Uranium Feed Contract
Uranium Feed Contract JOE GRIMES Executive Vice President Generation
Slide 48: Topic
Topic TVA must buy uranium feed to ensure an adequate and secure supply of fuel for our nuclear fleet For Board Consideration in May 2017 Approve awarding contract to Louisiana Energy Services LLC (LES) for uranium feed for TVA’s nuclear power plants through 2030 not to exceed $500 million
Slide 49: Nuclear Fuel Cycle Perspective
Nuclear Fuel Cycle Perspective Discussed in Nuclear Fuel Contract Presentation Enrichment Uranium feed Conversion to Fabrication UF6 Spent Fuel Uranium Mines Casks and Mills (U3O8) Reactors
Slide 50: Recommendation
Recommendation Approve contract with Louisiana Energy Services LLC (LES) to provide uranium feed for TVA nuclear power plants through 2030 not to exceed $500 million
Slide 51: Coal Combustion Residuals Contract
Coal Combustion Residuals Contract JOE GRIMES Executive Vice President Generation
Slide 52: For Board Consideration
For Board Consideration Approval of Authorization for the Chief Executive Officer (CEO) to approve contracts necessary for the execution of the coal combustion residual (CCR) and Clean Water Act related projects and activities Monetary The total combined value of contracts under the proposed delegat
Slide 53: Background
Background • A comprehensive strategy is in-progress to meet TVA’s commitment to move from wet-to-dry CCR storage and comply with the CCR Rule • The Environmental Protection Agency deems closure-in-place and closure-by-removal protective of the environment; TVA has reached the same conclusion after
Slide 54: Background
Background • TVA will need to enter into contracts with various contractors to provide the requisite materials and services • Contracts awarded under the proposed delegation are subject to the following: • Competitive bidding requirements set forth in the TVA Act and TVA policy • Work will be undert
Slide 55: Recommendation
Recommendation The Board is requested to authorize the CEO to approve the entering of contracts for the execution of the CCR Conversion Program and to enable TVA to achieve and maintain compliance with the Clean Water Act through 2026 The total combined value of contracts approved by the CEO under t
Slide 56: Nuclear Oversight Committee
Nuclear Oversight Committee
Slide 57: Audit, Risk, and Regulation Committee
Audit, Risk, and Regulation Committee
Slide 58: People and Performance Committee
People and Performance Committee
Slide 59: External Relations Committee
External Relations Committee
Slide 60: Board Meeting
Board Meeting May 11, 2017 Murfreesboro, Tennessee
Tennessee Valley Authority — Investor Presentation (May 2017) on 6ix