Despite a 1.6 percent drop in power sales last fall, the Tennessee Valley Authority said today it earned $81 million in net income in the final three months of calendar 2014.
Int the same quarterly period a year ago, TVA lost $67 million.
"We are off to a good financial start this year thanks to the progress made in reducing TVA's controllable costs," TVA President and CEO Bill Johnson said in a statement. "We remain on track to hit our $500 million target for sustainable annual operating and maintenance cost reductions as we work to keep rates low for the people of the Tennessee Valley."
A 2 percent wholesale rate increase adopted last August helped TVA generate $29 million more operating revenue even though sales were down in the three-month period. The money is being invested in large capital projects such as new nuclear and gas construction, emission controls, hydro modernization and transmission projects throughout the Valley.
TVA is spending $3.5 billion in new projects this year - the largest yearly capital investment in TVA history.
Compared with last year, total operating expenses during October, November and December were $117 million, or 5.4 percent, lower than the same period a year earlier. Fuel and purchased power expense was $11 million, or 1.4 percent lower than the same period last year due to a 15 percent decline in purchased power attributable to greater availability of coal and nuclear generating resources.
"The reliability of TVA's assets was crucial to the financial results we were able to achieve this quarter, with lower reliance on purchased power and good availability of our nuclear and other assets," TVA Chief Financial Officer John Thomas said. "The investments we are making in the TVA fleet are paying off."
TVA reported $198 million more investing cash outflows for the first quarter of fiscal year 2015 versus the same period last year, primarily due to capacity expansion spending for Watts Bar Nuclear Unit 2 and two natural gas-fired generation facilities at the utility's Paradise and Allen fossil sites.
Total electricity sales were down 1.6 percent and sales to local power companies were 1.3 percent lower for the first quarter ended Dec. 31, 2014 primarily due to milder weather compared with the same period a year ago.