TVA Power Sales, Operating Revenue Increase During First Half of 2005
June 2 , 2005
Rising Cost of Fuel, Purchased Power Contribute to Increased Expenses
TVA’s operating revenue for the first half of the 2005 fiscal year increased by $17 million to almost $3.7 billion, reflecting a 2.3-percent increase in power sales, compared to the same period last year.
Operating expenses for the first two quarters of 2005 were almost $3 billion, an increase of $166 million over the first half of 2004. Higher operating expenses and increased costs for fuel and purchased power contributed to a $120 million reduction in net income for the six months ending March 31, 2005, compared to the same period in 2004.
“Like other power companies around the nation, TVA is faced with rising costs for coal, natural gas and purchased power,” said TVA Director Skila Harris. “For the six months ending March 31, TVA’s costs for fuel and purchased power increased more than 13 percent over the same period last year.”
During the second quarter of 2005, operating revenue totaled $1.8 billion, which is 2.1 percent lower than the second quarter of 2004, and power sales were slightly lower, reflecting milder weather this winter compared to last year.
TVA had a net loss of $24 million for the three months e nding March 31, 2005, compared with a net income of $118 million for the same three-month period of 2004. Increased fuel expenses and purchased power costs and milder weather accounted for most of the difference. Total operating expenses for the second quarter this year increased 7.8 percent to $1.56 billion, compared to the same period last year.
“Operating expenses are expected to increase as the costs for coal and natural gas continue to escalate,” said TVA Director Bill Baxter. “Based on current estimates, coal and transportation costs are projected to increase by 13 percent in the next two years, and natural gas prices are expected to increase 7 percent in 2006 and 2007. Future events could affect these estimates, but if they are on the mark, it will likely increase TVA’s costs for power it buys from other suppliers.”
Net interest expense for the second quarter of 2005 was $315 million, 3.4 percent lower than the second quarter of 2004. Net interest expense for the first six months of 2005 totaled $633 million, 3.9 percent lower than the same period in 2004. A lower average outstanding balance of long-term debt contributed to the decreases in both periods.
TVA is the nation’s largest public power provider and is completely selffinanced. TVA provides power to large industries and 158 power distributors that serve approximately 8.5 million consumers in seven southeastern states.
Media Contact
TVA News Bureau, Knoxville, (865) 632-6000
Power Program Financial and Statistical Highlights (unaudited) (PDF, 14 kb)