published Friday, November 16th, 2012

TVA boosts bonuses to nearly 12,000 workers

Tom Kilgore, outgoing CEO of the Tennessee Valley Authority, is honored with a resolution during Thursday's board meeting being held in the Northeast Alabama Community College's Lyceum Auditorium in Rainsville, Ala.
Tom Kilgore, outgoing CEO of the Tennessee Valley Authority, is honored with a resolution during Thursday's board meeting being held in the Northeast Alabama Community College's Lyceum Auditorium in Rainsville, Ala.
Photo by Dan Henry.

By the numbers

* 150 million -- Winning Performance pay for TVA workers, scheduled to be paid next Wednesday.

* $12,500 -- Average Winning Performance payment this fall per TVA employee, up 32 percent from a year ago.

* $60 million -- Net income for TVA in fiscal 2012, down from $162 million the previous year.

* $11.2 billion -- TVA sales in fiscal 2012, down 5.2 percent from the previous year.

* $6.57 -- Wholesale price per kilowatt-hour of TVA power in fiscal 2012, down 5.5 percent from fiscal 2011.

Source: Tennessee Valley Authority

RAINSVILLE, Ala. — Despite the federal pay freeze, the biggest federal employer in East Tennessee is boosting its year-end bonuses — which average $12,000 per employee — to nearly 12,000 workers next week.

The Tennessee Valley Authority plans to hand out "Winning Performance" payments on Wednesday that are up 32 percent from similar bonuses paid a year ago. TVA President Tom Kilgore said the extra pay this fall reflects the utility's success in the past year in cutting expenses and lowering electricity rates despite an unexpected drop in power sales.

"The reason we're paying more this year is because we collected about $800 million less in revenues than we thought we were going to do this year, but our rates were still 5 percent lower than last year," Kilgore said Thursday following his last board meeting as TVA's CEO. "We had a good year, finishing more than $300 million below what was budgeted for operating and maintenance costs and our reliability and performance was among the best in the industry."

Kilgore said the payments are not pay raises per se, but are performance payments based on the utility's success in meeting pre-set standards in the Winning Performance program.

While rank-and-file TVA workers will get more, the TVA board decided Thursday to cut the share of payments for TVA's top executives by 25 percent below last year's Winning Performance measure.

"We've got a tough economy to be paying out (year-end bonuses) when we didn't achieve all of what we wanted," TVA Chairman Bill Sansom said during the board meeting.

TVA directors praised employees and managers for the agency's "diet and exercise" program adopted earlier this year to pare expenses after the mild winter and milder economy kept power sales well below budget.

TVA's wholesale power rates declined 5.2 percent from a year ago to $6.57 per kilowatt-hour in fiscal 2012 -- 10 percent below what was originally budgeted.

Although TVA lost money through most of the fiscal year, Chief Financial Officer John Thomas reported Thursday that the utility ended up with net income of $60 million for all of fiscal 2012, which ended Sept. 30. TVA power sales in fiscal 2012 fell by $621 million from last year -- and $829 million below budget -- due to slower-than-expected economic activity, milder-than-usual weather and energy conservation programs that cut overall demand by 1 percent.

"It was a very challenging year from a revenue perspective with a terribly mild winter and a mild summer," Thomas said.

In response, TVA delayed some capital projects, cut contracts and expenses and trimmed its payroll by $40 million. In all, operating and maintenance expenses at TVA were cut by $374 million below budget.

Thursday's meeting was the last for Kilgore, who is retiring at the end of the year and will be replaced by former Progress Energy CEO Bill Johnson.

"I've been greatly blessed to be here, but I still left you plenty to do," Kilgore told Johnson.

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

Other National Articles

videos »         

photos »         

e-edition »

advertisement
advertisement
400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.