Net income for the Tennessee Valley Authority in the first half of fiscal 2008 was down 68.4 percent from a year ago.

In a regulatory filing released Monday, the federal utility said it earned $126 million on revenues of more than $3.9 billion in the six months ended March 31, 2008. In the same period a year ago, TVA reported earnings of $177 million on revenues of just under $4.4 billion.

Most of the decline reflects a change in the way TVA accounts for interest expenses on power plants it is building but has not started. The utility changed the way it counts such funds used during construction in the past year, resulting in higher interest expenses in the current fiscal year of $91 million.

TVA also has had to spend an extra $343 million, or 22 percent more than a year ago, for fuel and purchased power during the first half of the fiscal year because of higher sales of electricity and higher prices for coal and natural gas.

TVA is expected to boost its earnings in the spring quarter after raising both its base rates and fuel adjustment on April 1 by a combined 12 percent.