TVA touches lives across the Tennessee Valley region every day:
The lights that go on at the start of the day. The goods
carried by barge through 14 locks and 800 miles of waterways.
The scenery, boating, fishing, and recreational opportunities
at reservoirs, campsites and picnic grounds. The manufacturing
plants fueled by affordable, reliable electric power.
Through the combined benefits of energy, environmental
stewardship and economic development, TVA empowers life
the TVA region.
TVA first empowered my hometown of Tupelo,
Miss., on November 18, 1934. On that day, my father
was an excited 5-year-old sitting on his older brother's
shoulders to get a glimpse of President Roosevelt as he flipped
the ceremonial switch on the first electric light, proclaiming
Tupelo the First TVA City and starting a new chapter of opportunity
in the lives of the people of the TVA region. That
day a crowd of thousands stood between my father and the
dignitaries, but in the years that followed he has seen up
close the lights and appliances that have come to homes and
farms, the modern farming and fertilization methods that
have replenished the region’s depleted soil, the businesses
that have opened and the economy that has grown as the Tennessee
River system has been tamed to provide the benefits of flood
control, commercial navigation, power production, recreation,
water supply and land use.
Today, TVA's mission is more relevant
and valuable than ever to the people of the region, empowering
the people we serve to achieve a better life. Boaters and anglers
enjoy the recreational value of TVA’s reservoirs. The impacts
of once-devastating yearly floods have been reduced, as shown
during the heavy spring rains of 2003. River water powers hydroelectric
plants and cools fossil and nuclear plants that fuel our region’s
economy. And the river system provides lower-cost commercial
transportation. The Boeing Delta IV rocket plant in Decatur,
Ala., for example, floats its massive boosters by river
barge to launch pads in Florida.
Working with economic development partners across
the region, TVA helps attract businesses like American Eurocopter,
which this year selected Columbus, Miss., as the site
for a helicopter manufacturing facility; Bodine Aluminum, which
chose Jackson, Tenn., for its automobile engine plant;
Topre America, which is locating an auto parts plant in Cullman,
Ala.; and Paris Packaging, which located a new facility
in Hopkinsville, Ky.
As TVA faces the business challenges of a changing
electric utility industry, we never forget what TVA means to
the 8.5 million people of the TVA region.
TVA means that the lights stay on, because — working
with the 158 local distributors of TVA power — we have
paid attention to the fundamentals of generation and transmission.
TVA means the bill is affordable, because the men and women
of TVA are working around the clock to control costs and continually
improve our operations and business practices.
TVA means the river is healthier and provides
clean water, recreation, navigation and affordable power to
the public. And TVA means the creation and retention of more
and better jobs, empowering families to work hard and build
better lives for themselves and their children.
The TVA Board has responded to a changing electric
utility industry with a strategic plan based on sound operations,
prudent planning, environmental responsibility and fiscal
strength with flexibility in balancing the investments we make.
TVA’s Strategic Objectives
Improve life in the Tennessee
Valley through integrated
management of the river
system and environmental stewardship
Meet customers’ needs
with affordable, reliable
in sustainable economic
development in the TVA region
Continue the trend of debt
Reduce TVA’s delivered
cost of power relative to
relationships with all of
First, sound operations — and
keeping the lights on. TVA is committed to maintaining and
upgrading our diverse mix of generating plants and 17,000-mile
transmission system. Over the past eight years, TVA has invested
$1.3 billion in its transmission system, and this investment
has paid off. For the fourth year in a row, TVA achieved 99.999
percent reliability in delivering power to our customers — the
158 power distributors and 62 large industrial customers across
the region. To the customers we serve, this means that TVA’s
electric power is there when they need it.
Second, prudent planning — in keeping power
plentiful and affordable. TVA must continue to keep up with
the demand created by our region’s growing economy, which
brings jobs to the people of the Tennessee Valley region. Because
of sound investments made in new generating facilities over
the past decade, the TVA power system was able to meet an all-time
record peak power demand of 29,866 megawatts on the cold morning
of January 24, 2003. The recovery of Browns Ferry Nuclear Unit
1 (BFN1) near Decatur, Ala., is expected to be a $1.8 billion
investment and is scheduled to add 1,280 megawatts to our system
in 2007. The recovery of BFN1 is expected to pay for itself
through power revenues by 2015 and operation of Unit 1 is expected
to lower TVA’s average delivered cost of power.
Third, environmental responsibility. Having
already invested almost $4 billion in clean-air equipment,
we are committed to continuing to do our part for clean air.
The 6.1 percent rate adjustment effective in fiscal year 2004,
only the second rate increase in 16 years, will enable TVA
to invest an additional $2 billion — about a million
dollars a day through the end of this decade — in scrubbers
to extract sulfur dioxide and selective catalytic reduction
and other systems to reduce nitrogen oxides emissions.
Through our Reservoir Operations Study, we are examining whether
changes in the way we operate the Tennessee River system would
produce greater overall public value for the people of the
Valley, while our Environmental Management System continues
to drive improvement in our environmental performance.
Fourth, and equally important, fiscal strength.
In fiscal year 2003, the TVA power system earned nearly $7
billion in revenues and paid down the outstanding balance of
bonds and notes by $380 million. In the past seven years, TVA
has reduced the balance of its statutory debt by $2.8 billion,
from $27.7 billion to $24.9 billion today. Over the past four
years, TVA has entered into five lease/leaseback transactions,
financing power assets more cheaply than it could with statutory
debt. In the past seven years, by moving quickly to take maximum
advantage of favorable markets, we have lowered the amount
of each revenue dollar going toward interest on the debt from
34 to 19 cents. The Board is committed to continue to build
TVA’s financial strength and flexibility.
TVA is pleased to report the
details of its fiscal year 2003 performance in a complete,
open and transparent manner in the spirit of the Sarbanes-Oxley
Act, the Congressional measure passed to raise the standards
of corporate accountability. As a public power company, TVA
follows conservative risk policies and practices and receives
oversight from the U.S. Congress and the Executive Branch.
For the people we serve, this annual report demonstrates that
TVA is a company you can trust and rely on.
Energy, environmental stewardship and economic
development are, as they have been since my father stood
at the back of that crowd in 1934, the three parts of TVA’s
mission, working together to form a unique and powerful foundation,
enabling the people of the Tennessee Valley to improve their
quality of life. TVA remains committed to the future of our
region. In this annual report, we present the faces of TVA,
our customers, our investors and others who depend on us
to keep the lights on, reduce the impact of floods, contribute
to keeping the air and the water clean, provide recreation
and navigation, and enable our region to compete for manufacturing
and high-tech jobs to keep our families in the Valley.
Directors Skila Harris, Bill Baxter, and I
are proud to share with you these reflections of how TVA
empowers life in the TVA region each day.