Electricity usage dropped another 3.4 percent across the Tennessee Valley during the past year, but TVA more than made up for the decline by boosting its rates and fuel charges for consumers to raise overall revenues by 9 percent during fiscal 2011.
In its annual report filed with the U.S. Securities and Exchange Commission on Friday, TVA reported net income of $162 million on revenues of $11.8 billion in the fiscal year ended Sept. 30. In fiscal 2010, TVA earned $972 million on sales of $10.9 billion.
Most of the revenue gain in the past year came from a $1.3 billion increase in the fuel costs passed on to consumers.
“Like most of the nation, we struggled with slow economic conditions in the valley and that continued to weigh on our power demand,” TVA President Tom Kilgore told financial analysts in a conference call Friday.
John Thomas, chief financial officer at TVA, said mild weather held down some power usage in fiscal 2011. But with more conservation and a slower rate of economic growth, TVA is now forecasting only about a 1 percent annual growth rate in power consumption, or only half the predicted growth pace TVA expected before the recession hit four years ago.
“We are continuing to see a sluggish economy,” Thomas said. “Although the worst recession since the 1930s has technically ended, difficult economic conditions and decreased customer demand continue to persist.”
Thomas said TVA expects to maintain capital spending in the next year at about the same as the $3.1 billion spent in fiscal 2011. TVA plans to sell its new John Sevier combined cycle gas plant near Rogersville, Tenn., by next spring and to lease back the plant to finance the facility without incurring more debt.
“We still have five to six billion dollars of headroom before we hit our $30 billion debt cap and we think these lease-back agreements should help meet our needs in the next year,” Thomas said.