With a smaller staff and cheaper fuel, the Tennessee Valley Authority cut its operating expenses nearly 9 percent during the first nine months of the current fiscal year, helping the federal utility to quadruple its net income compared with the previous year.
TVA said today it earned $32 million on revenues of $2.5 billion in the three-month period ended June 30. In the same period a year earlier, TVA lost $81 million on sales of more than $2.6 billion.
For the first nine months of the fiscal year, TVA had net income of $609 million, or more than four times the $147 million earned in the same period of the previous year.
Total operating expenses for fiscal year to date were $593 million lower than the same period last year, primarily due to savings in fuel and purchased power expense and lower non-fuel operating and maintenance costs. Fuel costs for the federal utility were down by $267 million so far this year due to cheaper natural gas, coal and purchased power.
Tennessee Valley Authority headquarters and TVA logoTVA also has cut its staff by nearly 2,000 positions over the past three years as part of a plan to cut $500 million a year in operating expenses. In a filing with the U.S. Securities and Exchange Commission today, TVA said another 200 employees will be leaving TVA this year under another voluntary reduction in force plan announced in May.
TVA said it has paid $45 million in severance payments in fiscal 2015 to encourage certain employees to retire early or resign to cut its overall staffing levels.
"The continuous improvement initiatives we have undertaken have contributed to lower operating and maintenance costs of $397 million year to date compared to the same period last year," TVA CEO Bill Johnson said in a statement today. "Our people and power system are aligned to ensure TVA continues to deliver low-cost, reliable power to the Tennessee Valley well into the future."
The cost savings came despite more than $2 billion invested so far in construction expenses this year, primarily related to the completion of the Watts Bar Unit 2 reactor.
TVA said this spring it also completed the purchase of the Ackerman Combined Cycle Plant located in Mississippi. The 700-megawatt facility is the sixth combined cycle gas-fired facility TVA has built or purchased since 2007.
In addition, TVA announced it will be working with Google to repurpose the Widows Creek plant site for Google's newest data center. addition, TVA announced it will be working with Google to repurpose the Widows Creek plant site for Google's newest data center.